On June 2023, the United States Justice Department announced federal and local criminal charges targeting 78 defendants across 16 American states as a part of its law enforcement action involving $2.5 billion in alleged healthcare fraud schemes, which targeted elderly and disabled people, HIV patients and pregnant women.
Cases included false billing of the federal medicare insurance programme for elderly and disabled Americans and paying illegal kickbacks, illicit diversion of expensive prescription medications and the improper dispensing of highly addictive opioid painkillers.
“Among those facing charges include 24 doctors, nurses and other licensed medical professionals, as well as healthcare executives including the current and former CEOs of a durable medical equipment online platform accused of falsely billing $1.9 billion in fraudulent claims,” Reuters stated.
The rotten state of affairs
As per the Justice Department, out of the $2.5 billion in fraudulent medicare claims, state Medicaid programmes serving the poor and private medicare insurance programmes, about $1.1 billion was actually paid out to the fraudsters.
Some cases were related to expensive HIV medications, which can fetch medicare reimbursement rates as high as $10,000 for a month’s supply.
In one case, the owner of a pharmaceutical wholesale distribution company was charged in New Jersey with illegally purchasing diverted HIV drugs and then reselling the medication by falsely claiming it was acquired through legitimate channels. In another incident, federal officials announced an indictment against a Wisconsin-based business owner accused of preying on low-income pregnant women by enticing them to sign up for prenatal care services, and submitting phoney claims for services never rendered.
Then there were fraud cases targeting elderly/disabled patients. These victims were tricked into providing their insurance information to telemarketers in lieu of receiving testing, medical equipment or other “free service” paid for by medicare. Doctors having no relationship with the patients were then rubber-stamping the orders by falsely certifying that they were medically necessary. These claims were getting submitted to federal/state insurance programmes for reimbursement.
Persons contributing to the scheme were receiving illegal kickbacks. The Justice Department also cited examples of services like durable medical equipment, genetic testing and lab diagnostic services, which were targeted by the fraudsters.
In January 2024, reports emerged about YouTube deleting a thousand videos circulating on its platform that purportedly showed singer Taylor Swift, television personality Steve Harvey and podcaster Joe Rogan pitching a ‘Medicare Scam’.
These videos were artificial intelligence-generated deepfakes. YouTube told Newsweek about the video streaming platform being “aware” that it was containing such fake advertisements and deleted over 1,000 videos, 90 YouTube channels and multiple advertiser accounts linked to the scams.
In 2023, The United States National Health Care Anti-Fraud Association estimated that tens of billions of dollars per year were lost to healthcare fraud. Many of these losses were attributed to the fact that medicare is required to pay medical claims quickly. As a result, claims were getting paid long before they could be flagged for potential fraud, which meant that these monetary losses were evading the government’s radar.
Some of these scams also preyed upon the disabled and elderly, making them unwitting victims of large criminal schemes. One such was the Durable Medical Equipment (DME) companies paying illegal kickbacks and bribes in exchange for referrals of medicare beneficiaries. Authorities described this scam, which involved telemedicine, as one of the largest healthcare frauds they had ever investigated. The scam targeted hundreds of thousands of elderly/disabled patients and involved medical professionals and call centres in other countries in pulling off the heinous act.
The scammers didn’t spare the COVID outbreak either. Medicare advocates noticed an eleventh-hour rise in complaints from beneficiaries who received tests, sometimes by the dozen that they never requested. For these experts, the trend was a signal that someone might have been using, and could continue to use, seniors’ medicare information to improperly bill the Joe Biden government.
In 2023, the United States Department of Health and Human Services’ Office of Inspector General received complaints about unsolicited tests being billed to medicare, as per the reports.
As per María Alvarez, who oversees New York State’s Senior Medicare Patrol, an organisation which helps identify and educate beneficiaries about medicare fraud, a stolen medicare number can be used repeatedly to get payment for all kinds of things.
According to Nancy Moore, the Senior Medicare Patrol programme director for Indiana, one beneficiary suspected something was amiss after receiving 32 unrequested tests over a 10-day period. In fact, complainants didn’t give out their medicare numbers to random people. Lisa Dalga, project manager for Ohio’s Senior Medicare Patrol, stated in 2023 about medicare being paid for tests for some beneficiaries who never received them.
Scams in Catheter Bills as well
Recently, the New York Times reported about a person named Linda Hennis, who, while checking her medicare statement in January 2024, saw a company, which she had never heard of, had been paid about $12,000 for sending her 2,000 urinary catheters. The fact is that Hennis never needed/received any catheters.
Chicago-based Hennis was among over 450,000 medicare beneficiaries whose accounts were billed for urinary catheters in 2023, according to the “National Association of Accountable Care Organisations,” an advocacy group that represents hundreds of healthcare systems across the country.
“The massive uptick in billing for catheters included $2 billion charged by seven high-volume suppliers, potentially accounting for nearly one-fifth of all medicare spending on medical supplies in 2023. Doctors, state insurance departments and health care groups around the country said the spike in claims for catheters that were never delivered suggested a far-reaching medicare scam,” The New York Times noted.
“Pretty in Pink Boutique”, the organisation under the lens here, billed medicare at least $267 million for catheters between October 2022 and December 2023.
Talking about medicare billing scams, if patients do not pay the bills themselves, more spending by the government can increase the premiums paid by enrollees in the future.
In 2019, an international fraud ring involving over $1 billion in phoney billing for back and knee braces got busted. The trend is clear here-medical supplies have become the sources of scams, thanks to relatively low-quality bars that result in the mushrooming of medical supply companies.
“The companies don’t need much to show why grandma needs a urinary catheter,” said Eva Gunasekera, who previously led healthcare fraud investigations at the Department of Justice.
A scary future indeed
Patients and doctors who have been reporting mysterious catheter claims to medicare for months expressed their frustration, as there was a lack of communication from the Biden government about whether billions of dollars have been lost to an ongoing billing scam.
Dr. Bob Rauner told The New York Times that his patients got collectively billed nearly $2 million in 2023 for “Phantom Catheters”.
He had to file a complaint with the federal health department’s Office of Inspector General in December 2023.
“Pretty in Pink Boutique is registered with medicare to a street address of a house in El Paso. Its phone number goes to an auto body shop called West Texas Body and Paint, where an employee who answered a call from a reporter said the shop receives ‘calls all day, every day’ from medicare enrollees concerned about fraudulent bills,” NYT stated further.
Pamela Ludwig, who runs an unrelated business in Nashville that is also called “Pretty in Pink Boutique”, got so many catheter complaints (as the medical supply company was sharing the same brand name) that she had to give an online clarification that her business was not part of any scam.
She complained to medicare in September 2023. After that, her husband heard from a New York City banker about several men coming to his office and asking to set up an account for “Pretty in Pink Boutique”.
The issue landed on the radar of the Oklahoma Insurance Department in July 2023, when it was investigating fraudulent medicare claims for COVID-19 kits. The officials then noticed a surprisingly high number of claims for catheters as well. The massive spike in billing for at-home catheters cost medicare as much as $2 billion.
The healthcare structure in the United States is in dire straits, with the scamsters having field days at the cost of the Americans’ well-being. Will the government ramp up its regulatory watch? Because being extra vigilant will help things more, rather than launching the regulation investigation after the occurrence of the crimes.