The Avanti Law Group: Federal crackdown on Medicare fraud in metro Detroit hits it big
by Ray Griffin Avanti Group LLCThe U.S. Department of
Justice could dub 2013 the year its fight against Medicare billing
fraud in Southeast Michigan yielded the first real payoff.
Last year, the Detroit Medicare Fraud Strike
Force, deployed here from Washington, and a locally organized
Health Care Fraud Unit of prosecutors together brought charges in fraud schemes
billing more than $380 million to the federal program. That's more than double
the bad billing amount charged in any preceding year.
It's been a slow build since the strike force came to Detroit in
2009 as part of the national Health Care
Fraud Prevention and Enforcement Action Team, referred to as HEAT, to
ferret out what data analysis suggested was hundreds of millions worth of fraud
here.
The effort is gaining traction, according to both investigators
and a Crain's analysis of local casework and Justice Data.
In 2013, federal prosecutors obtained 18 local indictments against
46 defendants in fraud schemes totaling $380.2 million — fueled by $225 million
in unnecessary medical treatment attributed to oncologist Farid Fata — but even
without that, higher than the previous record of $143.3 million in billings
charged in 2011.
But more significantly, that figure approaches for the first time
the billing volume that experts believe is likely fraudulent within the $5
billion-plus in annual Medicare expenditures in Southeast Michigan. Since the
first indictments from the increased enforcement presence came down in June
2009, nearly 170 people have pleaded guilty and nearly three dozen were
convicted by juries. Another 110 await a finding by a jury or judge this year,
including three who are on trial this week before U.S. District Judge Arthur
Tarnow.
Investigators said the success is due to a mix of cutting-edge
surveillance and witness interviews that establish crossover points between one
bad billing scheme and another.
Over time, Justice has begun to catch criminals before they close
shop and change markets as in years past, and the trickle of closed cases has
become a verifiable stream.
Feeling the HEAT
Local prosecutions from the national HEAT program, a collaboration
between Justice and the U.S. Department
of Health and Human Services, and by the local Health Care Fraud Unit,
formed by U.S. Attorney Barbara McQuade in Detroit in 2010, have together roped
in 341 defendants in $745 million of alleged fraudulent Medicare billing
schemes to date.
"Based on Medicare spending data, we see per-beneficiary
spending is going down in this market. One possible conclusion from that is we
are indeed making headway," McQuade said.
"That's consistent with what we see, but a lot of the law
enforcement community will tell you about the balloon effect, where squeezing
one area (of fraud) makes another expand."
The decline in per-beneficiary spending is tentative — the most
recent year available is 2010, but it shows that reimbursements from Medicare
fell anywhere from $50 to $400 per enrollee in five Southeast Michigan hospital
referral regions from 2009, which was the first year of strike force
prosecution. The regions saw nothing but increases the preceding five years.
Even so, the $10,944 average expenditure per Medicare enrollee
across the region is more than the average payout in 90 percent of the 306 regions
tracked nationwide.
The per-beneficiary data is compiled by the Dartmouth Atlas of
Health Care, a program of the Dartmouth
Institute for Health Policy and Clinical Practice.
Since January 2011, McQuade said, the amount billed to Medicare
for psychotherapy locally has gone down by 70 percent, and home health care has
seen reduced billings, although billings are still generally high.
"We do have a recently intercepted conversation on wiretap,
where two individuals were recorded saying they need to be more careful now
because they're really cracking down in this area. That's encouraging,"
McQuade said.
"Does that mean criminals stop, or do they go elsewhere?
That's hard to know. But when you do bring down some of the actors, you do seem
to bring down at least some of the fraud occurring along with them."
Nationwide, more than 1,500 people have been charged since March
2007 in connection with more than $5.1 billion in Medicare billings, by the
strike force in nine cities where software operated by HHS found
disproportionate Medicare billing volumes believed to be due to fraud.
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