Medicare Fraud Bust Nets $371 Million

This is just the tip of the iceberg. Attorney General Eric Holder charged 145 people in defrauding Medicare to the tune of $371 million by filing false claims.

Using about a dozen agents in targeted cities, including Miami, the Medicare Fraud Strike Force, has recovered $371 million in false Medicare claims and charged 145 people across the country in just two months.

More than 200 agents worked on Wednesday's $16 million bust that included 12 search warrants at health care businesses and homes across the Houston area.

Federal authorities say those businesses were giving patients "arthritis kits," which were nothing more than expensive orthotics that included knee and shoulder braces. Patients told authorities they were unnecessary and many never used them. But health care clinic owners billed between $3,000 to $4,000 for each kit.

Houston's other scam involved billing Medicare for thousands of dollars worth of liquid food like Ensure for patients who can't eat solid food. Authorities said clinic owners never distributed the food to patients. In some cases, clinic owners billed patients who were dead when they allegedly received the items.

The suspects arrested Wednesday in Houston will make court appearances Thursday morning. Suspects in Boston, New York and Louisiana will have first appearances later today.

The first task force started in 2007 in Miami, a city authorities say alone is responsible for more than $3 billion a year in Medicare fraud. Clinic owners there would bill Medicare dozens of times for the same wheelchair, while never giving the medical equipment to patients.

The problems have become more complex since then.

Suspects have moved into more sophisticated scams including home health care, physical therapy and infusion drugs. They've even started tapping into Medicaid Advantage, which allows the elderly and disabled to get benefits through private health insurers. The plans receive a government subsidy and generally offer more benefits than traditional Medicare.

The $371 million is just from two months worth of claims. You want to reign in costs? Cut the fraud. I suspect that this is all for show though in order to get the comprehensive health care bill passed, even though it does nothing to avoid the massive fraud we're seeing in Medicare and Medicaid.