Preventing Medicare Fraud among Health Providers and Organizations:: Preventing Medicare Fraud among Health Providers and Organizations: (Part II): Special Challenges among Urban, Rural, and Ethnic Minority Communities This presentation was sponsored in part by a grant from the US Administration on Aging. Grantees are encouraged to freely express their findings, therefore, materials and opinions do not represent the position or policy of the US Administration on Aging.


Presenters: Presenters Dr. Mark Grey Professor and Executive Director Iowa Center on Immigrant Leadership and Integration University of Northern Iowa Dr. Michele Yehieli Associate Professor and Executive Director Iowa EXPORT Center of Excellence on Health Disparities University of Northern Iowa


Outline of Topics: Outline of Topics Background on Research Review Overview of Specific Scams affecting Diverse and Underserved Population Case Studies of Scams What Staff Can Do… Acknowledgements Selected Bibliography


Background on Research : Background on Research Literature review: Types of fraud, minorities/immigrants and fraud, etc. Interviews with FBI, OIG, NHIC, Attorney General officials, and other law enforcement agents Tours of fraud-prevalent neighborhoods Urban and rural environments


Review: Review


Review: Defining Fraud and Abuse: Review: Defining Fraud and Abuse Fraud: To purposely bill for services that were never given or to bill for a service that has a higher reimbursement than the service produced. Deliberate misrepresentation. Abuse: Payment for items or services that are billed by mistake by providers, but should not be paid for by Medicare. This is not the same as fraud.


Review the Base Problem…: Review the Base Problem… Medicare fraud is “non-self-revealing” With credit cards Itemized statement Customer pays with his/her funds If there is a discrepancy, it is in the customer’s self-interest to protest the charge With Medicare, the customer/patient never sees the bill before it is paid by the government Only rarely will patient catch fraudulent charges on own statement after the fact


Review the Base Problem…: Review the Base Problem… Fraud = billing for fictitious services or for services of minimal or no value to patient (eg. unnecessary lab tests) Limited co-payments remove patient incentives to pay attention to the bill or “patients” are paid for their participation Fraud results from separating payer from the recipient of services Patient can only catch fraud after it takes place


Review: Types of Fraud: Review: Types of Fraud Billing for services never rendered Using genuine patient information to fabricate claims or “pad” claims for procedures that never took place Billing for more expensive services than were actually provided “upcoding” Billing for higher-priced treatment than was actually provided Billing for physician care when lower-level provider actually attended


Review: Types of Fraud: Review: Types of Fraud 3. Providing medically unnecessary services or products solely to generate insurance payments Rent-a-patient scams “sweaty palm syndrome” sham clinics durable medical equipment scams recruit and pay patients to have unnecessary surgery skeleton pharmacies


Review: Types of Fraud: Review: Types of Fraud 4. Misrepresenting non-covered treatments as medically necessary usually cosmetic-surgery schemes such as “nose jobs,” “tummy tucks,” and liposuction But billed as deviated-septum repairs, hernia repairs, lumpectomies, etc.


Overview of Specific Scams affecting Diverse and Underserved Populations: Overview of Specific Scams affecting Diverse and Underserved Populations


Immigrants, Minorities and Medicare Fraud: Immigrants, Minorities and Medicare Fraud How minorities and immigrants perpetrate fraud become complicit in fraud become victims of fraud


The Bad News, Upfront: The Bad News, Upfront “Health care fraud is now the bread and butter of organized crime. It pays their overhead and frees up other money so that they can commit more crimes” “Presence of large-scale health care fraud in a community is typically associated with presence of organized crime, particularly in certain ethnic communities”


Evolution of Fraud: Evolution of Fraud 1990s: Staged car accidents Fraudulent lab claims


1990s + : 1990s + DME Durable Medical Equipment Clinics Most recent Home health agencies Outpatient surgery Prescription drugs


“Business as Usual”: “Business as Usual” In many countries, bilking government bureaucracies is not “fraud” It’s BAU “Business as Usual” American providers are fiercely competitive Fellow ethnics regularly share practices, including ways to bilking systems


Case Studies of Scams: Case Studies of Scams


Sham Clinics and the Minority Perspective: Sham Clinics and the Minority Perspective Patients often don’t know they are being used Language barriers Cultural barriers Normal back home to receive gifts or gratis services Normal back home to be recruited “free trips” (to clinics) just a weekend jaunt Fraudulent relations with government BAU Unfamiliarity with US government procedures


Sham Clinics : Sham Clinics Typical Organizational Structure Leadership Level Often Russian or Armenian organized crime Open up “medical management company” Run ads in LA Times and ethnic newspapers Recruit “medical directors,” often young or retired doctors, as “contractual clinic owners” Paperwork and bank accounts set up in doctor’s name, and later used in money laundering schemes to transfer assets


(Alleged) Sham Clinic: (Alleged) Sham Clinic


Sham Clinics : Sham Clinics Operational Level Recruit informants and insiders in DHS, passport agencies, telephone companies and banks Part-time positions Usually fellow ethnics/immigrants Steal identity information Facilitate operations, including money laundering


Sham Clinics : Sham Clinics Operations” Recruitment Recruitment Hire “cappers” Culturally specific for the target populations Languages Ethnicity National origin Immigrant/refugee status Often convicted criminals who meet in prison/jail Morning meetings in secret locations to plan the day’s activities Hard to infiltrate these gangs of cappers Average $500 cut per person recruited


Advertisement for “marketing person” in Russian publication: Advertisement for “marketing person” in Russian publication We are a surgery center. Looking for a marketing person. If you can bring 10-15 people we pay $3000 every month to start and up to $500 per patient. (cosmetic surgery). If you can't bring 10-15 people then we will pay a referral fee per patient. We are also looking for for other types of surgeries, if you know people with good insurance who needs surgery, referrals are welcome. Will compensate generously.


Van drivers who bring “patients” to sham clinics and IDTFs.: Van drivers who bring “patients” to sham clinics and IDTFs.


Sham Clinics : Sham Clinics Operations Patients Recruited and paid by cappers Recruited door-to-door, among homeless, via telephone Recruited through advertisements in ethnic newspapers Provided transportation to and from clinics Paid for receiving services, lab samples ($100 cash) Paid to undergo unnecessary surgery and procedures “Sweaty palm” surgery: patients paid $1,800 each Brought in from Idaho and Iowa


Russian couple leaving IDTF with McDonalds meals as payment for Medicare cards and “free” diagnostic tests.: Russian couple leaving IDTF with McDonalds meals as payment for Medicare cards and “free” diagnostic tests.


Slide28: No licensed medical staff = patient abuse. Elderly patient about to get a hot paraffin wrap from unlicensed “massage therapist” His identity was used to bill Medicare for “physical therapy” and expensive diagnostic tests.


Sham Clinics : Sham Clinics Gifts exchanged for identities and Medicare information Ensure drinks Depends Perfume Toaster Ovens Food, including McDonald “Free medical exams” Cappers use PR49 “Excluded Beneficiary” lists to determine eligibility of patients for recruitment Majority of patients minorities Immigrants, refugees Often recruited from other states


Buying, selling and trading Medicare identities and health records at adult day health care center.: Buying, selling and trading Medicare identities and health records at adult day health care center.


Pharmacy that offers perfume and gifts for copies of Medicare and Medi-Cal cards. Receives millions each year in Medicare and MediCal money.: Pharmacy that offers perfume and gifts for copies of Medicare and Medi-Cal cards. Receives millions each year in Medicare and MediCal money.


Immigrant elderly in adult day health center receiving music lessons in exchange for Medicare identities.: Immigrant elderly in adult day health center receiving music lessons in exchange for Medicare identities.


“Rent” an Immigrant Patient: “Rent” an Immigrant Patient Sleep Studies Paid $100 + transportation Recruiters bring in immigrants for easy $100 Lie in bed for 4 hours watching TV with wires attached Medicare billed $1,500 for “sleep study” $800 for breathing and lung tests $1,600 for tests related to dizziness


Ultrasound machine used on all patients regardless of medical need (service charged to Medicare): Ultrasound machine used on all patients regardless of medical need (service charged to Medicare)


Lab Test Scams: Lab Test Scams Blood from runaways, homeless, drug addicts Draw excess blood Perform blood tests Stolen doctors’ identities and Medicare numbers Sell blood to other fake labs Sometimes lured with promise of “free” health exam


Slide36: Suspected lab work drop-off site


Drug Scams: The Next Frontier : Drug Scams: The Next Frontier Drugs….Medicare Part D Counterfeit drugs Up-code or over charge for drugs Order more than actually prescribed and sold on black market Under-prescribe drugs Real pharmacies do not make profits on drugs Sham pharmacies profits 40 times hire than legitimate pharmacies


Pharmacy paid millions for prescription drugs.: Pharmacy paid millions for prescription drugs.


Scams: Healthcare Money Laundering : Scams: Healthcare Money Laundering Profits and Money Laundering Funds immediately sent to multiple organizations to “launder” it May eventually wind up in foreign banks or even potentially linked to terrorist activities Occurs rapidly and difficult to trace State Labor Commission can shut down clinic temporarily in few weeks, but takes two years or more to investigate and prosecute on tax evasion or money laundering Incredibly complicated to track; need specialists


Insiders in banks can “launder” large deposits with rapid movement of funds to multiple accounts. : Insiders in banks can “launder” large deposits with rapid movement of funds to multiple accounts.


Scams: Healthcare Identity Theft: Scams: Healthcare Identity Theft “Ghost” patients Medicare numbers/cards sold on street for $10-20 Patient Records sold for $20 Often sold and resold several times Just like email or mailing lists IDs’ often stolen in trash from MSNs Stealing and selling IDs does not even require sham clinic, often conducted with home computers


Healthcare Identity Theft: Healthcare Identity Theft One stolen Medicare number will typically result in $30,000 in fraudulent services and DME in LA For poor newcomers: Easy cash by selling or leasing their identities and Medicare numbers and signing blank forms In LA, running out of patients for some scams Where next? Nevada and rural states like Iowa


Scams: Hospice/Home Health Services: Scams: Hospice/Home Health Services Use immigrants/refugees with some health care experience as RNs/LPNs Newcomer may or may not know how they are registered or licensed Some health workers may be involved in identity theft and other scams


Scams: DME: Scams: DME Identity theft; ordering of unnecessary supplies; shipments of multiple items in large quantities Often a “beginning” or lower level of fraud Examples: One of the largest ever: $36.5 million in knee braces; 18 Medical Supply Firms @ $1,200/brace Scooters, electric wheelchairs, hospital beds “Feeding tubes” and flavored drinks Diabetes equipment Oxygen machines


DME fraud in MSN: DME fraud in MSN


Storefront with no customers, deliveries or activities. Paid millions for DME never delivered to patients.: Storefront with no customers, deliveries or activities. Paid millions for DME never delivered to patients.


Special Rural Scam Concerns: Special Rural Scam Concerns Medicare fraud scams quickly spreading to rural communities Currently relatively uncommon, however: Likely to grow quickly as next frontier Rapidly expanding elderly populations New influxes of immigrants and refugees Depletion of urban patient base for scams Isolation of rural populations and limited resources to prevent and fight crime, especially in foreign languages


What Staff Can Do…: What Staff Can Do…


Bottom Line: Fraud Prevention for Staff: Bottom Line: Fraud Prevention for Staff Change the mindset of clients! FBI Agent: “Elders need to realize that personally Medicare fraud does impact them because it uses up their benefits and limits” Healthcare fraud costs are passed on to all Americans as taxpayers To the extent organized crime is involved, it frees up other money to commit worse crimes


Bottom Line: Fraud Prevention for Staff : Bottom Line: Fraud Prevention for Staff Don’t try to fight organized crime!! Review MSNs thoroughly Protect identities Report abuse and crimes rapidly


Bottom Line: Fraud Prevention for Staff: Bottom Line: Fraud Prevention for Staff Focus on educational outreach efforts to doctors, hospitals, clinics, and patients, as covered in training material from last week Remember to provide education in culturally appropriate manner, with special focus on diverse and underserved populations, as presented in last year’s training on file


Bottom Line:Fraud Prevention for Staff: Bottom Line: Fraud Prevention for Staff Utilize resources of National Consumer Protection Technical Resource Center: Videos, like “Watch Out and Speak Up”, available in several languages like Spanish and Tagalog Updated video due in December 2006 Consult The Center’s online resource library for multilingual brochures and handouts on prevention


Guidebook for SMP Outreach to Minorities, Immigrants and Refugees: Guidebook for SMP Outreach to Minorities, Immigrants and Refugees


Sample: 12 Tips to Protect Yourself from Health Care Fraud: Sample: 12 Tips to Protect Yourself from Health Care Fraud


Sample: 12 Tips in Chinese: Sample: 12 Tips in Chinese


Sample: 12 Tips in Russian : Sample: 12 Tips in Russian


Sample: “Who Pays?” (new version forthcoming): Sample: “Who Pays?” (new version forthcoming)


Reporting Resources: Reporting Resources Center for Medicare/Medicaid Services (CMS): 1-800-Medicare www.medicare.gov or www.cms.hhs.gov Office of Inspector General: 1-800-HHS-TIPS or 1-800-447-8477 HHSTips@oig.hhs.gov The National Consumer Technical Resource Center: 1-877-808-2468 www.smpresource.org


Selected Bibliography: Selected Bibliography Thomas H. Stanton (2001). Fraud-and-Abuse Enforcement in Medicare: Finding Middle Ground. Health Affairs 20(4) Malcolm K. Sparrow (2000). License to Steal: How Fraud Bleeds America’s Health Care System. Westview Press. Brandon Bailey (2003). For Medicare, Signs of Fraud Difficult to Spot. Mercury News, November 23, 2003. What Asian Americans Should Know about Insurance Fraud. A Training Manual for Community-Based Organizations (www.consumer-action.org)


Selected Bibliography (continued): Selected Bibliography (continued) National Health Care AntiFraud Association (2005). “Health Care Fraud: A Serious and Costly Reality for All Americans.” (www.nhcaa.org) DHHS Centers for Medicare and Medicaid Services. (2003). Pay It Right! Protecting Medicare from Fraud. Association of American Physicians and Surgeons. AAPS Report on Medicare Fraud. (http://www.aapsonline.org/fraud/medfraud.htm) May 26, 2006.


Thank You!: Thank You! Iowa EXPORT Center of Excellence on Health Disparities 220 WRC University of Northern Iowa Cedar Falls, IA 50614-0241 (319) 273-7965 www.iowahealthdisparities.org