Gov't subsidization of ANY program - Medicare fraud

When the gov't is brought in to subsidize ANY program (e.g. homeowners allowed to reduce their taxes with the interest paid on mortgages ) :

- There is no incentive for the service-sellers to decrease their prices, but just the opposite
they can now increase prices because the customer is paying less (gov't picking up part of tab) .

- Oversight of programs is difficult for a number of reasons, so the opportunity for fraud and corruption increases exponentially.

BTW, how come medicare , a program designed for senior citizens, is being billed so much for HIV/AIDS, which is a younger person's disease in general ?


Article published Sep 21, 2007
South Florida bills billions for HIV

September 21, 2007

By Jim McElhatton - Doctors and clinics in three Southern Florida counties account for most of the billions of dollars charged to Medicare nationwide for HIV and AIDS drugs and services, billing records show.

Federal health care regulators call the lopsided billing patterns "egregious" and warn that South Florida — particularly Broward, Miami-Dade and Palm Beach counties — is a potential hotbed for health care fraud, waste and abuse.

"It"s all ultimately part of the money-driven, underground economy in Miami," said Benson B. Weintraub, a health care fraud lawyer based in Fort Lauderdale.

According to a report this week by the Inspector General for the U.S. Department of Health and Human Services, health care providers in Broward, Miami-Dade and Palm Beach submitted $2.5 billion in claims to Medicare on behalf of HIV/AIDS patients in 2005.

By contrast, providers in the rest of the country submitted less than $1 billion in claims combined.

Suspected scams, which involve the recruitment of patients, kickbacks and unnecessary medical services, aren"t limited to HIV clinics.

In March, federal inspectors found dozens of wheelchair and electric scooter suppliers in Florida that ran afoul of federal rules, including phantom operations that billed the government but had no bricks-and-mortar locations.

"Medicare continues to be highly vulnerable to fraud and abuse and immediate steps must be taken," Inspector General Daniel R. Levinson said of his office"s findings.

Mr. Levinson"s report also found that Medicare officials and contractors could not provide a "clinical explanation" for the high level of billing.

One common HIV/AIDS scam involves doctors and clinics employing "runners" who recruit HIV and AIDS patients, then pay kickbacks if patients get unneeded medical treatment. In turn, crooked providers bill Medicare for the services.

After getting shut down, some providers open different clinics under a new corporate name.

In a written response to Mr. Levinson"s report, Herb B. Kuhn, acting deputy administrator for Centers for Medicare and Medicaid Services (CMS), said Medicare officials have taken "aggressive recent actions" to crack down on fraud.

Though provider billings for HIV/AIDS in Southern Florida have increased from $1.5 billion in 2004 to $3.3 billion in 2006, CMS is getting tougher scrutinizing claims before providing reimbursement, Mr. Kuhn wrote.

In 2004, he wrote, Medicare reimbursed 66 percent of all claims and paid out $1 billion. But in 2006, CMS paid $890 million, approving just 27 percent of all claims submitted.

"In fact, many of the providers with aberrant billing activity ... were referred to law enforcement and are now facing prosecution," Mr. Kuhn wrote.

Mr. Weintraub said the federal court in Southern Florida has a reputation among lawyers as "the health care fraud capital of the United States." He said a host of factors contribute to the problem.

The fraud often happens in disenfranchised communities and sometimes involves "illegal residents because they"re paid cash for virtually no labor, and that in my view is a very degrading and exploitative practice," Mr. Weintraub said.

Federal authorities said they"re increasing efforts to investigate and prosecute fraud. In April, the FBI and U.S. Attorney"s Office for the Southern District of Florida announced the arrests of 10 owners of HIV clinics and medical-equipment dealers on money-laundering charges.

One company, Coral Way Professional Health Services Inc., was charged with giving kickbacks to patients. At the clinics, workers injected the patients with a saline solution but later billed Medicare for actual prescribed drugs, authorities said.

A federal task force aimed at rooting out Medicare fraud has resulted in 34 criminal cases involving a combined $142 million in Medicare bills in Southern Florida, authorities said.

R. Alexander Acosta, U.S. Attorney for the Southern District of Florida, yesterday called the federal task force "a critical part of our continuing resolve to safeguard the Medicare program." He said health care prosecutions have increased nearly 50 percent compared with last year.

Investigators are largely focusing on infusion therapy and medical equipment dealing schemes, Jonathan I. Solomon, special agent in charge of the FBI"s Miami field office, said yesterday. Infusion therapy mostly deals with medication given intravenously or through a feeding tube.

HIV/AIDS billing scams have been occurring for years in Southern Florida. In 2005, the state Board of Medicine convened a meeting to discuss the problem.

Meeting minutes show that officials learned of one clinic that had been treating automobile injuries but switched to HIV/AIDS cases because of the potential for high billing. The owner had no medical license and paid patients up to $500 to visit the clinic.