The New Face of Medicare
Drug dealers and organized-crime groups have invaded the Medicare system and are taking the government and citizens for a billion-dollar ride
Finder fees. What Hernandez describes is nothing less than the booming health care fraud "support industry," teams of accountants, computer billers, and check cashers whose "no questions asked" work ethic greases the fraud skids in places like Miami. Finders seek elderly people as "patients" for crooked clinics; they are paid $300 for a patient with both a Medicare and a Medicaid number, $150 for just one number. The finders, in turn, pay the patients between $75 and $150 for their help. The practice has become so popular that many elderly people depend on the cash, says Hernandez. "I've seen some old people go to four different clinics in one week." Medicare fraud is also heavily intertwined with the narcotics trade, says Anthony Vitale, a Miami lawyer who specializes in Medicare issues. Cash from drug sales is used to start up bogus clinics; cash from drug sales is laundered with the clinics' Medicare checks; profits from Medicare reimbursements are plowed back into the drug trade.
Gang attacks. Not surprisingly, as in the drug trade, the huge amounts of cash generated can also spawn violence. Sergio Echevarria, Eladio Munoz, and their friends, a federal indictment alleges, made up a band of thugs who staged a series of home invasions against people they believed were profiting from fraudulent Medicare clinics. One night in January 1996, the gang stopped Idania Arias, the wife of one Miami clinic owner, outside her home. They jumped into her white Jaguar and, with her two young boys in the back, poked a .38 revolver into her face and ordered her to drive to a truck stop. There, Arias and the boys were put into a cargo container. The mother was allowed to leave to go get cash. Their kidnappers believed that she could turn over $500,000, but they released all three when that didn't happen. But then Arias did something her kidnappers hadn't expected: She called the police. The alleged kidnappers were arrested a short while later, driving around.
Juan Cortina wasn't so lucky. He was shot in September 1996 outside his Executive Health and Therapy Center on Miami's Flagler Street. Shortly afterward, someone tried to dig up clinic records that Cortina had buried in a lot he once owned. Police haven't found Cortina's killer, but they say Cortina was suspected of Medicare fraud; he had already done time for smuggling 20,000 pounds of marijuana.
HCFA officials have begun to admit the agency's past failings and the role that its policies have played in encouraging fraud. "I'm outraged by some of the things people will do to rip off the Medicare program," says Nancy-Ann Min DeParle, HCFA's new administrator. "We are making some big changes." These include visiting new home health care providers and medical-equipment companies before they get Medicare provider numbers. Min DeParle says that of 2,000 home health care agencies checked so far, 650 have been denied approval. HCFA this year has allocated $150 million for contractors to use in fraud detection. And with Kennedy-Kassebaum money, HCFA may now hire outside companies to watch over its contractors. Previously, the law pointedly did not allow HCFA to do this. But more than a year after the law's adoption, HCFA has yet to award any such contracts. And though HCFA now requires more information from providers, such as Social Security numbers, Senator Collins and others claim that it does little if anything with those data. "I don't think they've very effectively used the new resources, new agents, the task forces that have been set up," she says. "It just doesn't seem to be a priority."
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