TAMPA — Four men set up four bogus medical clinics in Tampa.
They pay Medicare clients who allow the clinics to bill Medicare HMO insurance providers in their names for vein procedures they never undergo. Each clinic submits a separate bill for each patient, submitting multiple claims for the same procedures on the same individuals at the same time.
The scam went on for more than three years. Collectively, the men were able to steal more than $2.5 million from federal taxpayers.
They are part of a massive industry of cheats who have become a top priority for federal investigators who say they're concerned not only with the money being taken but also with the threat posed to public health by some of the schemes. In one of the cases, patients who need expensive intravenous drugs were given saline solution instead while the bad guys pocketed insurance payments for the drugs.
Healthcare fraud is estimated to cost the country $80 billion a year, and it's growing, according to the FBI and Health and Human Services Office of Inspector General.
And healthcare fraud prosecutions are on the rise nationwide, according to a recent report from the Transactional Records Access Clearinghouse at Syracuse University, which tallied prosecutions brought under a specific Healthcare Fraud statute and found 366 cases last year, a 3 percent increase over the previous year.
In the Tampa area, the number of cases has fluctuated from year to year and was down in 2013, but officials anticipate a spike this year as cases that have been investigated begin to result in charges and more resources are being dedicated to healthcare fraud.
“This year, expect a lot more,” said Assistant U.S. Attorney Robert Mosakowski, who oversees Tampa's federal white collar crime prosecutions.
In all of last year, the U.S. Attorney's office for the Middle District of Florida had nine healthcare fraud prosecutions, down from 13 the year before. In the first five months of this fiscal year, another nine cases have been brought. Officials expect the number to rise as high as 25 this year.
“We planted the seeds a couple of years ago, and now we're harvesting,” said Mosakowski, who estimated that 60 percent of the resources of his staff now are dedicated to healthcare fraud cases. “It's one of our office's main priorities,” Mosakowski said, because “it's high dollar value. You can make an awful lot of money relatively quickly by doing a fraud on the government.
“We're the sentries on the fence line,” said Ryan Lynch, who is in charge of the Tampa Office of Inspector General for Health and Human Services. “We keep Tampa from becoming like Miami,” where healthcare fraud is an enormous problem. “We're watchful. Because of our (limited) resources, we have to selectively prosecute, investigate and prosecute.”
“It's a high priority because it is a high threat,” said Andrew Sekela, FBI supervisory special agent for white collar crimes.
The schemes take many forms, and new ones are always developing.
There are the fake clinics that provide no services and bill the government for procedures they don't perform. There are people who create fake medical equipment companies and then bill the government for equipment that doesn't exist, and pharmacies that bill for drugs they don't dispense.
There are real medical clinics that provide some services but also bill the government for services they do not provide. There are real doctors that provide and bill for unnecessary procedures.
Sometimes, doctors bill for services they provide but pad those bills by manipulating what codes they use. In one of those schemes, they get around a requirement that treatments for certain conditions — the flu, for example — are supposed to be billed in a group. Those doctors will “unbundle” the various treatments and bill for them separately.
Some doctors and labs pay and accept kickbacks — explicitly against the law — for sending each other business.
Investigating and prosecuting the schemes can be challenging, officials said, partly because doctors can blame their staffs and say an incorrect billing was a clerical mistake, or they can say a questionable procedure was medically necessary. Their lawyers also can argue to juries that the doctors were merely trying to provide the best care for their patients.
Lynch said investigators must prove a pattern and not just an isolated incident. Establishing motive might require the use of an undercover agent, which can be time consuming and resource intensive.
One reason for the increase in resources this year was a decision last year by the Justice Department to assign a department attorney to Tampa to prosecute nothing but healthcare fraud, Mosakowski said.
Agents and prosecutors also are being freed up after work on some large-scale cases, including the prosecution of former WellCare executives who were convicted of some charges in what the government said was a scheme to defraud Medicare.
Lynch said he had one agent who worked on nothing but WellCare for six years and another agent who worked the case more than half his time. The FBI also had 1 ½ agents on that case. In that time, the Health and Human Services Office of Inspector General in Tampa office had a total of between 10 and 12 agents.
Lynch said he has to turn down investigating about 20 cases a year because of limited resources, choosing to focus on the high-dollar schemes and those that pose a threat to public health. The ones he can't investigate, he said, typically involve allegations that the medical providers are giving services but also padding their bills.
Officials advise people to scrutinize their Medicare plan statements and insurance explanation of benefits statements to make sure billings match the services they received. Discrepancies can be reported to 1-800-HHS-TIPS (447-8477) or online at stopmedicarefraud.gov.