I’m pleased to be here today with Secretary Leavitt to announce significant arrests involving Medicare fraud in south Florida, and to discuss the important work of a newly established Strike Force designed to identify, prosecute and disrupt Medicare fraud schemes.
The Strike Force consists of federal prosecutors and civil attorneys, the FBI, the HHS office of Inspector General, and state and local law enforcement in South Florida. It began its first phase of work on March 1st.
This multi-agency team was designed to combat Medicare fraud in a way that is proactive, timely and strategic by targeting and disrupting Medicare fraud as it is occurring using real-time analysis of Medicare billing data to identify suspect transactions and potential offenders.
The Strike Force will not only prosecute those engaged in Medicare fraud, but will also seize their illegally obtained profits and, in partnership with HHS, establish programs to stop these schemes from occurring again.
The amount of money being stolen from the Medicare system and the flagrant nature of this theft, warranted the establishment of the Strike Force. South Florida was chosen as a launching point because it is one area, among others, where we believe Medicare fraud is prevalent. Efforts will spread to other geographic areas where we believe enforcement is most needed.
The track record of the Strike Force thus far is strong, with the indictments of 38 defendants alleged to have fraudulently billed the Medicare program over $142 million dollars.
In South Florida, the strike force is targeting schemes involving Durable Medical Equipment, or DME, as well as HIV infusion therapy schemes.
According to indictments filed since the Strike Force began, some of the 38 individuals charged in Miami have been involved in various schemes to defraud the Medicare program, such as operating under false pretenses, a Durable Medical Equipment company – a company that, if legitimate, would sell things like wheelchairs, braces, orthotics and diabetic supplies.
Some of the 38 defendants recently arrested were allegedly paying Medicare recipients for use of their Medicare card numbers so that the defendants could submit fraudulent claims.
We believe scores of shell companies have opened and obtained Medicare supplier numbers in Miami-Dade County alone.
Another scheme targeted by the Strike Force is fraudulent HIV infusion clinics. In such schemes involving fraudulent HIV infusion clinics, operators pay off doctors to issue unneeded prescriptions to complicit patients, who are likewise paid off for use of their Medicare cards. In some instances, patients actually receive no medication, or the wrong medications during infusion, putting them at a substantial risk of harm.
Where fraud like this occurs, it is a perversion of our health-care system. The Strike Force efforts will assist in ensuring the integrity of Medicare.
To give you an idea of the amount of money involved, I can tell you that one of the defendants in another scheme recently had his Rolls Royce Phantom, allegedly acquired with stolen Medicare money, seized by the FBI. For four other companies owned by defendants, federal agents have used seizure warrants to take back over $1.3 million from bank accounts. The Strike Force is a part of the Department’s overall efforts in combating fraud against the Government. We have not only prosecuted offenders, but have also made substantial recoveries of stolen government funds. Just last year, the Department recovered a record amount of more than $3.1 billion in civil settlements and judgments in fraud and False Claims Act cases. Recoveries in health care fraud cases in 2006 climbed more than a billion dollars over the previous year – and we look to build on that success in the future.
Charges brought against the defendants in these indictments include conspiracy to defraud the Medicare program, criminal false claims, and violations of the anti-kickback statutes. If convicted, many of the defendants face up to 20 years in prison on these charges. All defendants charged in these indictments are presumed innocent unless and until proven guilty.
I want to thank Secretary Leavitt, the investigators and prosecutors who are working so hard on this Strike Force as well as the employees of the Centers for Medicare and Medicaid Services for their work protecting this vital program for those who need it.