Drug dealers turn to DME


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Makes sense to me: Why deal drugs and chance being killed in a drive-by shooting when instead you can become a DME dealer and defraud Medicare out of millions—and be considered a white collar criminal to boot. I guess for some people that's considered moving up in the world.

At least that's what NPR reporter Greg Allen reported last week in a long piece on Medicare fraud in South Florida.

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If you want to listen to the story, click here. Otherwise, I've included a transcript below.

Legal Affairs
Medicare Fraud Acute in South Florida

Listen to this story... by Greg Allen

Morning Edition, October 11, 2007 · There's a nationwide crime epidemic
going on that rakes in $35 billion or more each year. Exactly how much is
being stolen is impossible to say, because the federal government doesn't
try to measure it.

It's Medicare fraud. The $368 billion federal program is a tempting target
for crooks, and there are signs the problem is growing. It is particularly
acute in South Florida, where it seems to be replacing drug trafficking as
the crime of choice for those who want to get rich quick.

The smart action is in something called "durable medical equipment," which
includes items such as wheelchairs, back braces, canes, walkers, electric
beds and shower-transfer tubs.

April Showers dvd It sounds mundane, but the numbers involved are mind-boggling. Fraudulent
Medicare claims estimated at between $300 million and $400 million were
prosecuted in just two South Florida counties in the past year. And those
are just the cases that have drawn the attention of the courts. Estimates of
total losses range as high as 10 times that much.

Medicare fraud has now become a favorite career path of many former drug
dealers. The FBI has interviewed drug dealers and asked them why they're
moving from cocaine to wheelchairs and walkers.

Why the Shift?

Malcolm Sparrow of Harvard's Kennedy School of Government says former drug
dealers give three reasons.

"There's more money, there's much less chance of being caught and if I do
get caught, I'll be treated like a white-collar criminal, not like a drug
dealer," Sparrow says.

There's also a fourth reason: They're less likely to be killed in a drive-by

buy Two for the Road Tim Delaney runs the white-collar crime program at the FBI's Miami office.
He has 27 agents working just on health-care fraud, and they stay busy.
Since March, when a new Medicare Strike Force went into operation in Miami,
120 people have been charged.

Many of those arrests are for scams involving durable medical equipment. DME
companies have been favorite fronts for people engaging in Medicare fraud
for a long time because they're easy to set up.

"It's a field where you can be a relatively recent immigrant new to America
and not know anything about the health-care system and open up your own
company and start billing," Delaney says.

Investigators say they see start-up companies that immediately bill the
government for tens of thousands of dollars a month for equipment and
services that Medicare beneficiaries never receive.

In South Florida, a federal investigation earlier this year found that
nearly half of the suppliers of durable medical equipment were not in
compliance with Medicare rules. The problem of DME fraud is so widespread
that federal authorities revoked Medicare approval from every single company
operating in South Florida and told them they would have to reapply for
billing privileges.

Patients Join the Scam

But as federal authorities began to crack down on that kind of fraud,
resourceful criminals moved into a new area. The new scam involves clinics
that administer drugs intravenously to people with HIV and AIDS.
Investigators call that "infusion-therapy fraud."

A single treatment of these drugs can cost thousands of dollars. The scam
involves billing the government for the expensive drugs, then administering
only saline solution — or nothing at all — to AIDS and HIV patients.

In one recent case, people behind the fraud went so far as to doctor blood
samples — lowering platelet counts — to convince medical personnel that an
expensive AIDS drug was needed.

A darker side of infusion-therapy fraud is that people with AIDS or who are
HIV-positive are often in on the scam.

"They're often paid kickbacks," Delaney says. "Hundreds of dollars to sit in
that chair and take that injection."

No Country for Old Men rip In many cases, though, Medicare beneficiaries are the victims, not the
perpetrators of the fraud. In one big case last year, an employee at the
Cleveland Clinic in Naples, Fla., stole billing records for more than 1,000

Before long, one of those patients — Tom Bisceglia — received a notice from
Medicare about treatment he had supposedly received.

"It was for wound treatments, apparently for wounds that wouldn't heal,"
Bisceglia says. "And they were treatments I never had done."

The Medicare reimbursement for the treatment was $6,000. Bisceglia testified
at a trial in which two people were convicted for identity theft and fraud.

In that case, the two people involved were cousins. That's not unusual.
Medicare fraud often involves networks of acquaintances and family members.

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"These kinds of frauds are conspiracies," says the Kennedy School's Sparrow.
"You can't do them alone. You require lawyers, clinics, administrators,
accountants ... You use an existing trusted network within which the

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loyalties are stronger than they are to the authorities."

A Trusting System

Medicaid and private insurance companies are also struggling with fraud. But
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there are a few factors that make Medicare almost a perfect target.

One is that it's a trusting system, set up to serve honest physicians — with
few safeguards designed to weed out false claims. Also, most claims are paid
automatically, so there's little or no person-to-person contact.

The companies Medicare hires to handle its claims say they are working to
improve fraud detection. But their main mission is not to root out fraud; it
is to pay claims quickly and smoothly.

One of the most surprising things about Medicare fraud is that no one
actually knows how big the problem is.

The federal government does track the "error rate," but Sparrow says that's
mostly a check of paperwork that misses outright fraud. In the early 1990s,
at the behest of the Clinton administration, he spent months studying the
issue and wrote a book, License to Steal.

In 1997, Congress responded with more than $100 million to combat
health-care fraud — money that pays for 400 FBI agents, including those on
the South Florida strike force.

But Medicare still winds up spending just 3/100 of 1 percent to ensure the
integrity of the program.

The Guru full movie Rush Hour 3 hd "Why is this operation not 50 or 100 times the size," Sparrow asks. "Why
wouldn't we spend 1 percent of the Medicare budget on program integrity?
Then we might get serious about controlling a problem that might be 15
percent or 20 percent of the budget."

If fraud and abuse account for 20 percent of the current Medicare budget,
that would amount to more than $70 billion.