Thieves' Bazaar: Medicare Fraud

Hospitals, doctors and dealers have made Medicare the nation's sweetest crime. The feds are now trying to shutter the door.

Worse, Republican Governor Tim Pawlenty had canceled that program a year earlier. Neither the state nor the HMOs bothered to tell the feds they were still covering losses from a program that no longer existed.

"How do we know that other state, private and personal interests are not being funded through the federal Medicaid program?" Republican representative Michele Bachmann asked when testifying before Congress. "The answer is, we don't."

As multiple investigations continue, Feinwachs remains unemployed. He now spends his time agitating for reform.

Sheila Jackson Lee: Texas U.S. Rep. Sheila Jackson Lee carried water for Medicare swindler Houston Riverside General Hospital.
photo by David Ortez
Sheila Jackson Lee: Texas U.S. Rep. Sheila Jackson Lee carried water for Medicare swindler Houston Riverside General Hospital.
David Feinwachs found that HMOs in Minnesota had turned Medicaid into a cash cow, making it several times more profitable than their private insurance. When he asked for more data, the state blocked him.
courtesy David Feinwachs
David Feinwachs found that HMOs in Minnesota had turned Medicaid into a cash cow, making it several times more profitable than their private insurance. When he asked for more data, the state blocked him.

"The interesting thing about health-care fraud is that our government always goes after low-hanging fruit," he says. "If they were storekeepers, we'd put in surveillance systems and armed guards to catch kids stealing gum from around the cash register. Meanwhile, we have people backed up to our warehouses with semi-trailers loading the merchandise, and we're oblivious to that."

Well, not everyone is oblivious.

The Guys Who Showed Up

Housed in a featureless building north of Miami, the HEAT Task Force is a government anomaly: It actually turns a profit.

For every dollar it spends investigating, it uncovers another $8 in fraud.

From the moment you enter the office, you notice something's different. The cubicle plantation is eerily quiet. Most agents are on the street, working more than a dozen cases each.

HEAT is short for the windy governmentese of Health Care Fraud Prevention and Enforcement Action Team. It has branches in nine cities where the stealing is most prolific — places like Los Angeles, Houston, New York, Dallas and Baton Rouge. Agents and prosecutors work in small, aggressive teams, combining data analysis with traditional detective work.

Since 2007, they've charged 1,480 defendants with $4.8 billion in fraud. More than half of those indictments came out of the unit in Miami, a city Special Agent In-Charge Christopher Dennis calls "the crown jewel of Medicare fraud. A lot of the schemes are typically started here — vetted, proven here — and farmed out to other parts of the country."

There's no shortage of targets.

Agent Reginald France, a first-generation Haitian-American built like a linebacker, was out at 3 a.m. this morning raiding a medical office. His motivation comes from the guile of these crimes.

"You have some of the smartest people in law enforcement working here," he says. "In a lot of ways that drives us, because we want you to understand you can't pull the wool over our eyes."

France takes a reporter on a tour of the fraud hotbed of Hialeah. Strip malls line boulevards like concrete and metal kudzu. An agent who wishes to remain anonymous rides along, his square jaw and disarming manner reminiscent of The Rock. He offers a reporter $1 for every mall he can spot without a medical business.

It isn't easy.

There are doctors, physical therapists and mental-health clinics in every direction. Mom-and-pop pharmacies sit just doors down from Walgreens, yet still out-bill the national chain thanks to prescription fraud. Adult daycare centers specialize in physical therapy for Medicare beneficiaries.

"They bring in these zumba dancers," cracks The Rock. "These young girls are zumba-dancing away, and these old guys are looking at it, and, yeah, they're getting some kind of therapy."

Medicare recipients are crucial to these schemes. While it's possible to simply steal patients' information, those schemes are easier to detect.

"That's the bread and butter of the fraudster — the fact he can pay somebody to participate in the scheme," says Dennis. "If you have a willing participant, you then eliminate the ability to tie the fraud to you. That person is going to lie for you because they conspired with you."

Recruiters typically pay beneficiaries a combination of cigarettes, booze, pills and money to use their Medicare numbers. Cash payments can reach $2,000 quarterly. All recipients have to do is sign sheets confirming that care was received.

For the patient, it's a low-risk play. Nobody wants to put an eighty-year-old mee-maw in front of a jury. Prosecutors wouldn't recoup much even if they did. And since Medicare can't be revoked by law, there's little downside to bartering your number away for a carton of Kools.

This makes the beneficiaries key to unraveling the plots, and necessitates a careful, respectful touch. Many of The Rock's tips come by way of recipients he's encountered in previous cases.

The Rock savors breaking down liars. He asks them seemingly innocuous questions about their family and upbringing. These are typically answered in a quick, sure tempo, while questions of fraud are littered with ums, wells and false starts.

"You keep them talking, and after a while, their house of cards starts to crumble," he says. "They're looking up and noticing that I'm not writing down anymore. You give them the look — 'I'm not stupid' — the same look their mother and my mother gave us."

He's been chasing fraud for more than a decade, and he's sure to be doing it a decade from now. That's the wonderful thing about the federal government being your mark: It always has new money to steal.

Dr. Oxy and Detroit's Fraud Beach

Imagine one of Martin Scorsese's overhead tracking shots. Only instead of zooming in on his favorite goodfella, the camera zeroes in on Michigan's Monroe Pain Center, near the Toledo, Ohio, border.

« Previous Page
Next Page »
My Voice Nation Help

Rick Perry and Sheila Jackson Lee working togetha mayne.


great article. govt never ceases to amaze me.


Find the blog "Dentist the Menace" and you'll find stuff about Medicaid fraud from corporate dentists. There are dentists who are told by the companies to perform operations on healthy teeth on Medicaid children, as found when a Washington DC TV firm investigated Small Smiles - it probably still happens today right here in Houston


Sonja Schoenwald and her cronies are well-experienced in these kinds of matters. Check up wherever she has worked and is working now, in both North and South Carolina. Check court records for her around 1993 on in Durham, NC. 

Sincerely, CatherineTodd

Thomas9 1 Like

This shows how our government is so lacked on major multi-million dollar business crimes.  As long as you are a white collar criminal and whatever you are doing does not get major media exposure, you are good. You will not be held accountable for your actions, fines will be minor a best and jail time? forget it, you keep all the money you stole and are allowed to continue to the same time of crime or indulge in others. That is what the US government 'encourages'.  They only go after the blue collar criminal because they are easier and obvious to prosecute. No one in this country, especially the US government will hold themselves accountable for their actions. That includes the lack of action. By the govt. basically slapping people on the wrist to these types of billion dollar crimes, they are encouraging it. Nothing will change until the people take action and 'force' their state and national reps to act. Problem is most of the people across the country don't care, are too lazy and will not do anything about it (i.e. holding themselves accountable for what they should do, act!).

saffie6813 1 Like

There is a couple of BILLION in fraud mentioned in just this one article.  Multiply that out everywhere.  If Medicare would just put a billion dollars into the budget for fraud investigation and put these people in jail the plan would be solvent forever.  But even arrest does not deter these crooks because they never see a day in jail and they get to keep most of the money they have stolen.  

One a personal note, I once saw someone at the nursing home measuring everyone for "diabetic shoes"  for which I found they were charging Medicare $420 for each pair.   They looked like sneakers from Walmart to me.  

Unfortunately, we have seen these type of articles before and nothing is ever done.


Iffen The Press wants a comment from the loquacious Sistuh Stealing, all they needs is to roll up wid a camera.  She glad to shoot her mouth offen then.

Thieving_n_Thuggin 1 Like

It don't be thieving in Sister Stealah Jackson Flea's eyes, it be reparations.

Houston Concert Tickets