Kusserow’s Corner: Fraud is Expanding Faster than Those Charged with its Enforcement

In a number of recent articles, I cited a wide range of enforcement actions by the federal government. Many of those cited were out of the Miami area. On March 26, Brian Martens, Assistant Special Agent in Charge for the Miami for the HHS Office of Inspector General (OIG), provided testimony before the Senate Special Committee on Aging regarding efforts to combat Medicare fraud that he estimated costing taxpayers $60 billion to $90 billion each year. He regaled the Committee with several of the notorious cases I reported in the last year. He stated that, in spites of many recent successes in the region, criminal fraud schemes continue to evolve and it is a challenge for enforcement agencies to keep pace with them. No sooner do enforcement efforts identify and target certain schemes, than new ones pop up. Wrongdoers move quickly geographically and among parts of the Medicare program, often relying upon the muscle of organized crime. He cited a number of frauds that originated in the Miami area that were quickly copied in other regions of the country.

He stated that there are two elements needed for Medicare fraud: a provider billing Medicare and patient beneficiaries against whom claims can be submitted. There are three ways beneficiaries get involved in a fraud. They can be unknowing victims; they can unwittingly benefit from some service or product that was not medically necessary; or they can be complicit with the scheme by using or selling their number for personal gain or being paid to claim Medicare services or products.

Martens stated that “These criminals are taking advantage of those most vulnerable in our society–the elderly and the disabled.” He stated that although in a majority of cases there is no direct harm to patients, beneficiaries do feel the effect of the crimes that often distort their medical records, which can result in identity theft and compromising of their Medicare number. Common tactics include paying kickbacks to recruiters for finding patients and providing unnecessary services.

During his testimony, Martens provided a number of examples of fraud schemes that have cost Medicare many millions of dollars. He cited an $8-1 return on investment for the resources devoted to fraud investigation. He made a point of noting that the case load of the OIG has quadrupled over the last five years, while the OIG is facing declining resources to combat fraud; therefore, what is needed is more resources. “We don’t have the staff that we need with the amount of fraud that goes on,” he said. He further noted that Strike Forces were not operating at full strength due to funding shortfalls and hiring freezes. All of this means that the OIG is greatly dependent on working with other enforcement authorities at the state level and with the private sector in an effort to keeping pace with the workload.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.