Medicare Fraud In Miami

Medicare fraud affects all of us. It results in an increase in the cost of Medicare premiums and it reduces the amount of money available for legitimate benefits.

Jay Weaver of the Miami Herald has written two recent articles that expose the problem and extent of medicare fraud in the Miami-Dade area. Unfortunately, this is mostly likely just a glimpse at the problem. Florida has a large number of Medicare recipients, and Medicare fraud tends to prevail in those areas.

Lax scrutiny allowed Medicare fraud to flourish in Miami-Dade

Eighteen shuttered medical equipment suppliers were allowed to reopen -- and then allegedly proceeded to bilk Medicare out of $10 million.

BY JAY WEAVER

jweaver@MiamiHerald.com

In January 2007, Medicare shut down the businesses of 18 medical equipment suppliers in Miami-Dade County after investigators told the federal agency that the companies were shams.

But when Medicare heard their appeals, the operators were quickly reinstated -- only to be indicted later that year for submitting more than $10 million in phony claims to the very agency that had let them back in business, court records show.

Medicare wound up paying those suppliers at least $5 million. Despite mostly successful prosecutions, much of that ill-gotten money was never recovered.

''Healthcare fraud in Miami is viral, and these perpetrators replicate it,'' said Kirk Ogrosky, deputy chief of healthcare fraud at the Justice Department.

Last fall, the U.S. Department of Health and Human Services' Office of Inspector General cited the 18 medical equipment suppliers in a critical report concluding that Medicare's appeals system was flawed because it lacked strict rules of evidence. Medicare officials don't disagree.

''It's always troubling when you have 18 reinstated like that,'' acknowledged Kimberly Brandt, Medicare's anti-fraud director. ``They may have gotten back in, but they didn't get back in for a very long time. That doesn't mean we couldn't have been more vigilant.''

But nearly six months later, Medicare officials told The Miami Herald they have yet to establish new guidelines that would thwart fraudulent medical equipment operators from regaining billing privileges, as recommended by the inspector general. Brandt said the change in presidential administrations has caused delays.

The Miami Herald, in a public records request, obtained the names of the 18 Miami-Dade medical equipment operators who had filed bogus Medicare bills for respirators, artificial limbs and other healthcare supplies over several years.

Among the offenders: Celso Gonzalez, Iliana Evora Hernandez, Oscar R. Martinez and Rafael Turro, all of Miami-Dade.

By the time federal prosecutors charged the four in September 2007, their two companies -- Medwell Equipments Corp. in Doral and R&E Medical Equipment in Miami -- had filed almost $2 million in false claims. Medicare had paid them more than $550,000.

The four, who pleaded guilty, fleeced Medicare by stealing physicians' identification numbers to order supplies that were either medically unnecessary or not provided to patients, court records show.

The providers also acquired fake invoices to support their phony claims for reimbursements and paid kickbacks to patients to use their Medicare numbers for fraudulent billing.

In South Florida, their story is not uncommon.

FRAUD EXPOSED

Last year, The Miami Herald exposed numerous examples of Medicare fraud in a series of stories on the medical equipment industry, HIV infusion clinics and home healthcare agencies -- spotlighting not only criminals who scam the system, but also the agency's lax policy of paying bills without verifying them.

The problem is so widespread in South Florida -- at least $2.5 billion in bogus billings a year, experts say -- that the region is recognized as the nation's Medicare fraud capital.

Medicare is a federal health insurance program for the elderly and disabled.

Last week, President Barack Obama, in an address to Congress, said rooting out Medicare fraud will be a priority as lawmakers seek to reform the beleaguered healthcare system.

An example of Medicare's failings was highlighted in the inspector general's report released in October. The report said Medicare allowed more than 220 South Florida medical equipment businesses -- mostly in Miami-Dade -- that had been shut down in January 2007 to reopen after appeals.

Medicare hearing officers restored the firms' billing privileges even though they had no offices or employees during site visits by Health and Human Services inspectors in late 2006.

HHS Inspector General Daniel R. Levinson said Medicare's appeals process was flawed because it did not set standards of proof establishing that businesses were real and actually operating.

Some medical equipment operators submitted photographs and licenses while others offered leases and utility bills. Still others offered sworn statements saying their businesses were open on the date of the original site visits.

Ultimately, most of the reinstated companies had their Medicare billing privileges revoked again, later in 2007, after a government contractor sent inspectors to their businesses and found little to no activity.

''Our findings suggest that a more critical review of the types of evidence submitted by suppliers is warranted to ensure that fraudulent suppliers are not reinstated,'' Levinson wrote.

In a letter, Medicare's former acting administrator, Kerry Weems, agreed with him, saying the agency ''should consider establishing guidelines'' for evidence during appeals.

But Medicare has yet to inform the inspector general of any new standards, according to Don White, a spokesman for Levinson's office.

Medicare's flawed appeals system allowed sisters Maria Hernandez and Maivi Rodriguez and their mother, Marta Jimenez, to reopen soon after their operations were shut down in January 2007. They continued to run two Miami-Dade companies, Action Best Medical Supplies and Esmar Medical Equipment, until they were indicted four months later.

The family members, along with a Miami dermatologist, Dr. Ana Caos, were found guilty last May of conspiring to defraud Medicare and filing $620,000 in false claims for aerosol medications.

The physician received $100 kickbacks for each prescription, records show.

At trial, prosecutors showed that the family members also used the same roster of Medicare patients to bill millions of dollars to the government program for unnecessary home healthcare services.

CRIME PATTERN

''If you look at the bios of these perpetrators, what you'll see is the fraud comes in waves,'' said Ogrosky, the Justice Department prosecutor.

Another offender who allegedly scammed Medicare: Idalmes Sansegundo, owner of a Hialeah business, A&K Medical.

In early 2007, Medicare also allowed Sansegundo to reopen her shuttered medical equipment business, which continued to operate until the FBI caught up with her about nine months later.

Sansegundo was charged with filing $4.2 million in false claims with Medicare. The agency paid her company about $1.5 million.

But prosecutors immediately hit a snag in the case. After Sansegundo was granted a bond in Miami federal court, she fled.

The FBI is trying to track down the fugitive, who had lived with her mother in Miami-Dade.

Miami-Dade doctor, chemist plead guilty to Medicare fraud

BY JAY WEAVER

jweaver@MiamiHerald.com

Miami-Dade physician Carmen Lourdes del Cueto, 65, and chemist Alexis Dagnesses, 44, pleaded guilty Thursday to participating in a scheme to bill Medicare for $10 million in false claims for HIV-infusion therapy.

The pair joined two other doctors and two medical assistants who pleaded guilty earlier this week to submitting phony bills for treating HIV patients who did not need or receive the therapy, federal prosecutors said.

All six defendants conspired to manipulate blood samples, pay kickbacks to HIV patients and purchase a small fraction of the infusion drugs billed to Medicare through their Miami clinic, Midway Medical Center, from 2002 to 2005, prosecutors said.

The nation's health-insurance program paid them for about $5 million in HIV-infusion services that have been considered obsolete for more than a decade.