Tag Archives: medicare fraud

Lawsuit claims UnitedHealthcare concealed Medicare Advantage enrollment fraud complaints

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Credit: Kaiser Family Foundation
UnitedHealthcare has 4.6 million Medicare Advantage members, 24 percent of the U.S. Medicare Advantage market.

A recently unsealed whistleblower lawsuit claims that UnitedHealthcare concealed from federal officials hundreds of complaints of enrollment fraud and other misconduct in its Medicare Advantage program.

Brought by two UnitedHealthcare sales professionals in Wisconsin, this suit is worth watching because it is the third in recent months that whistleblowers have brought using knowledge they gained while working for Minnetonka, Minn.-based health insurance giant. Continue reading →

Joseph Burns (@jburns18), an independent journalist who resides in Brewster, Massachusetts, is AHCJ’s topic leader on health reform. He welcomes questions and suggestions and tip sheets at joseph@healthjournalism.org.

Reuters shows how shell companies hide Medicare fraud in plain sight

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Reporting for Reuters, Brian Grow and Matthew Bigg used an analysis of public data to investigate the practice of using shell companies to defraud Medicare of millions while staying a step or two ahead of federal investigators.

While the specific damage inflicted by shell companies has not been tracked, “Last year, ‘improper payments’ resulted in $48 billion in losses to the Medicare program, nearly 10 percent of the $526 billion in payments the program made, according to a Government Accountability Office report last March.”

“Simply by reviewing the incorporation records of Medicare providers in two buildings” in Miami, they write, “reporters uncovered information that one government official said could prompt “a serious criminal investigation” of some of the companies.”

The fraud rings merge stolen doctor and patient data under the auspices of a shell company and then bill Medicare as rapidly as possible. Other shell companies are often layered on top to camouflage the fraud, law enforcement officials say.

Some of the shells purport to be billing companies; they form a buffer between the sham clinics and Medicare. Others pay kickbacks to doctors and patients who sign off on bogus medical claims or sell their Medicare ID numbers to enable the shell company to bill the government. Still other shells act as fronts to launder the profits.

The key to this kind of fraud, known as a “bust-out” scheme, is for each of the fake companies to bill as much as possible before authorities catch on. Shell companies become a tool that helps keep the crooks ahead of the cops.

The Armenian crime ring whose fraud made headlines last year used 118 shell companies in 25 states and bilked the feds out of at least $100 million. Varying incorporation rules make state-hopping and obfuscation “easy,” they write, especially since states don’t check to see if records are legit before they allow a company to incorporate. The reportes found that even a few simple safeguards would go a long way to detecting the boldest frauds.

In Florida, FBI agents say almost every Medicare fraud scheme involves shell companies. There, Reuters scrutinized incorporation documents for firms located in two buildings near the Miami International Airport. In a building with dimly lit corridors, a rickety elevator and almost no one in sight, a host of companies purport to provide services to Medicare recipients. But telltale signs of fraud abound.

Many of the 26 companies in the buildings had replaced corporate officers at least once in the last four years. Some had changed ownership, or their corporate executives represented more than one medical-related company. Law enforcement officials consider such activities to be red flags for fraud.

For its part, CMS told the reporters it simply didn’t have the resources necessary to conduct the widespread audits needed to catch fraud, though the $350 million allocated to such efforts under the 2010 health reform law should help.

Health journalists who will certainly want to review the “methodology” subheading at the end of the story.

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

Feds indict doc whose abuses were detailed in 2010 WSJ series

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In The Wall Street Journal, John Carreyrou reports that a physician the paper spotlighted in a data-driven series on Medicare abuses has now been “indicted by a federal grand jury … for allegedly submitting more than $13 million of false claims.”

The article marks the first time the Journal has been able to print the physician’s name (Emma Poroger), even though they’ve been aware of it for more than a year.

The Journal identified Dr. Poroger, a doctor of osteopathy, as having suspicious billing patterns by mining the Medicare claims database, a computerized record of every bill submitted to the program. But her name was withheld in the October 2010 front-page article because Medicare keeps information pertaining to individual doctors confidential under a three-decade-old court injunction.

That injunction stems from a 1979 lawsuit filed by the American Medical Association, the doctors’ trade group, to keep secret how much money physicians receive from Medicare. At the time, the court said doctors’ privacy trumped the public’s interest in knowing how tax dollars are spent.

The Journal’s publisher, Dow Jones & Co., filed court papers this year seeking to overturn the injunction. In September, a federal judge in Florida ruled that Dow Jones’s case could proceed.

Carreyrou also called out a few other physicians featured anonymously in the series whose names had also been made public in various official proceedings.

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Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

Texas psych clinics take Medicare’s millions without oversight

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The Houston Chronicle‘s Terri Langford reports that for-profit outpatient psychiatric clinics in the state, most located around Houston, are collecting millions in Medicare dollars yet “require no license to operate in Texas.”

She writes that, despite access to significant federal funds, the clinics are subject to little oversight from any level of government, especially when it comes to patient care.

…other than a one time inspection conducted by Medicare when clinics start operating – these programs have no detailed standards or “conditions of participation,” that must be met before filing claims and collecting taxpayer money.
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The U.S. Department of Health and Human Services flagged the problem earlier this year, saying “no regulatory basis exists to ensure basic levels of quality and safety” for CMHC care.

The loopholes, including the lack of an established means to kick poorly performing centers out of the medicare system, apply nationwide, but their exploitation remains localized.

Records show that in 2009, Medicare paid $287 million on these programs nationwide, 74 percent of them located in the three states that have no state licensing requirements: Florida, Louisiana and Texas.

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

Reporters uncover Calif. chain’s systematic upcoding

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In a follow-up to their lengthy California Watch investigation into sketchy billing practices at the state’s Prime Healthcare chain, Christina Jewett and Stephen Doig looked at newly released data and found that “Prime Healthcare Services bills Medicare for a variety of unusual ailments – among them a brain disease and a condition causing eyes to bleed – that can generate lucrative payments to the chain.”

For this piece, the reporters reviewed hundreds of pages from five related court cases and talked to a number of former Prime employees who protested the hospital’s billing practices — many of which they say were mandated directly by the company’s owner. Doig and Jewett then returned to the data and found that, as the 14-hospital chain’s leadership pushed providers to bill for a certain lucrative condition, instances of that condition just happened to rise in Prime hospitals.

Jewett and Doig even analyzed medical codes to estimate how much the alleged upcoding could have earned Prime hospitals.

It is not possible to pinpoint how much additional revenue Prime earned when documenting the unusual conditions, because each patient may have numerous diagnoses. But it is clear that conditions reported in outsized rates at Prime hospitals can bring in an additional $3,000 to $7,000, compared with similar but less serious conditions.

Taken together, the report stands out for its deft integration data, court records and interviews into a cohesive investigation.

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.