False health-care claims are huge—and spreading...
“THE largest federal health-care fraud takedown in our nation’s history”, was how Eric Holder, the attorney-general, described it. On July 16th authorities in five cities charged 94 people with a $251m plot to defraud the federal agency that manages health-care programmes for the poor and elderly. It was only the latest indictment in what has become a massive black hole in government spending.
The Centres for Medicare and Medicaid Services lose more than $60 billion a year to scam artists, according to the non-profit Coalition Against Insurance Fraud. About a third of the money involved in all prosecuted fraud cases is being siphoned off in south Florida, where federal agents—having missed it at first—have recently woken up. Organised-crime experts from the FBI are now involved, and judges are starting to hand down heavy sentences: in one recent case, 30 years in jail.
Typically, a “care-provider” will bill Medicare for non-existent or unnecessary services. These seem to follow fashions. First it was HIV/AIDS medicines and therapy; then medical equipment, from wheelchairs to neck and knee braces. Fraudsters have also targeted home health care, physical and occupational therapy and, most recently, mental-health services.
New measures will try to stop the haemorrhage of funds. The Department of Health and Human Services is setting up data systems to monitor payments. A telephone-monitoring programme, with voice-recognition, will verify that health-care workers really are making home visits. Since much of the fraud is conducted from fake addresses—empty shops, or in one case a broom cupboard—physical inspections are also being carried out. But the criminals have proved hard to deter. As they switch from one health programme to another, so they stay one step ahead of the law, in what the chief federal prosecutor in Miami, Wifredo Ferrer, has described as a frustrating game of “whack-a-mole”.
The scale of the region’s fraud is mind-boggling, according to a series of reports in the Miami Herald. Florida mental-health clinics submitted $421m in bills to Medicare last year: about four times more than Texas, which has 30% more residents. A shocking proportion of Florida fraud is conducted by Cuban exiles, just-arrived and penniless, who quickly amass vast fortunes. Several have escaped jail by jumping bail and fleeing-back to Cuba.