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Medicare, Medicaid newest victims of organized crime
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11-15-99 Washington. Career criminals and members of organized criminal outfits have been scamming Medicare and Medicaid for billions of dollars a year, according to a new General Accounting Office report. The GAO's Office of Special Investigations submitted the report last month to Sen. Susan Collins, R-Maine, chairperson of the Senate's Permanent Subcommittee on Investigations, who in 1998 requested information "concerning the magnitude of illegal activity by … criminal groups posing as healthcare providers." The report cites figures from the Coalition Against Insurance Fraud, which estimates that in 1997 there were nearly $54 billion in fraudulent claims against government and private health insurers. About $34 billion was attributed to fraudulent claims against Medicare and Medicaid. "The Medicare trust fund is being ripped off to the tune of billions of dollars," said Felicia Knight, press secretary for Collins. Knight said the report is disturbing because it indicates the growing number of ways in which the system is susceptible to fraud. "Part of what you think of as traditional Medicare fraud is the provider who pads the bill, which is still unethical and still wrong and should be stopped," Knight said. "But in those cases, someone is still getting a service. What we're seeing now is nobody is getting anything-they're just getting ripped off." The report indicated that organized criminal groups-which is not meant to mean the Mafia-have found ways to submit false claims to Medicare and Medicaid. In a review of just seven investigations from 1992 and 1998 in North Carolina, Florida, and Illinois, the GAO determined that fraudulent claims ranged from $795,000 to more than $120 million. Of those fraudulent claims, "between $72,000 and over $32 million were actually paid by either Medicare, Medicaid," or private insurers, the report said. The report noted several ways in which criminals were able to file false claims. Some stole provider and beneficiary numbers, while more elaborate schemes included clinics and laboratories that existed only on paper. Other claims involved "rented" patients who were recruited by crooked physicians and clinics for unnecessary diagnostic testing in exchange for money or drugs. Knight said Collins has proposed legislation that would require criminal background checks on providers and mandatory site visits that would weed out fake clinics and practices, though it is unlikely to be voted on during this session of Congress, she said.
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