Tag Archives: miami

Reuters shows how shell companies hide Medicare fraud in plain sight

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.

Herald reports on failures of assisted living system

The Miami Herald‘s yearlong “Neglected to Death” series on abuse and violations in assisted living facilities is expansive, but I recommend starting with this explanation of how the story came together. In short, the crux of project, reported by Rob Barry, Carol Marbin Miller and Michael Sallah, is a huge database, which never had been made public, the paper obtained from state regulators. An accompanying editorial from Aminda Marques Gonzalez details its somewhat unique provenance.

At the heart of the reporting is a rich database of hundreds of thousands of records that includes all inspections and complaint investigations by the Florida Agency for Health Care Administration, the sole regulatory agency for ALFs [assisted living facilities]. Layered in: a decade of complaints filed with the State Department of Elder Affairs and public records including police reports, death certificates and autopsy reports.

The paper has made the database searchable and open to the public.

The Herald reports on a facility where violence is so commonplace that incidents have prompted more than 1,200 calls to 911 in the past five years. It’s important to note that, while we usually think of assisted living for the elderly, there are such facilities for those who have mental illness and other disabilities.

Other stories tell of residents suffering from sores that went untreated, homes and caretakers that failed to keep medical records, facilities that did not protect vulnerable residents from those with a criminal background, a failure to track patients with dementia and more.

A timeline helps explain how and why the assisted-living facilities became a part of the Florida system and their growth.

Fla. Medicare fraud flourished under lax oversight

Jay Weaver of the Miami Herald followed up on the Herald‘s investigations into widespread Medicare fraud in South Florida. Weaver found that when 18 shuttered providers appealed to Medicare, they were reinstated only to turn around and further defraud the government of at least $5 million, much of which may never be recovered.

Last fall, the U.S. Department of Health and Human Services’ Office of Inspector General cited the 18 medical equipment suppliers in a critical report concluding that Medicare’s appeals system was flawed because it lacked strict rules of evidence. Medicare officials don’t disagree.

”It’s always troubling when you have 18 reinstated like that,” acknowledged Kimberly Brandt, Medicare’s anti-fraud director. “They may have gotten back in, but they didn’t get back in for a very long time. That doesn’t mean we couldn’t have been more vigilant.”

Weaver reports that, six months later, officials have yet to put rules in place to prevent suspected fraudulent equipment operators from regaining billing priviliges.