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Senior Medicare Fraud Patrol Recovers $5.9M

 |  By cclark@healthleadersmedia.com  
   June 24, 2014

A California beneficiary trained to spot fraud saw something on her Medicare summary notice and said something to her local fraud patrol organization, sparking a multi-year federal investigation and ending in jail time for fraudsters.

In a typical year, the national Senior Medicare Fraud Patrol (SMP), a federal program that helps beneficiaries identify scams, doesn't recover much money. The average annual collection between 2008 and 2012 was a mere $1.2 million.

But a recent Office of Inspector General report tallying results for 2013 showed that the total for 2013 was $9.04 million, virtually all of which—$8.9 million—came from the California SMP program, run by California Health Advocates (CHA), a non-profit in Santa Ana.

Nearly $5.9 million came from one case in which fraudulent activities targeted Southern California's large Vietnamese community.

Organized by a CHA staffer who speaks Vietnamese, the $5.9 million case was the result of multiple media messages, educational classes, and other events specifically focused on Vietnamese beneficiaries, because they are frequently the targets of a type of scam called 'affinity fraud.'

'It happens a lot, when [providers] take advantage of their own people,' says Micki Nozaki, an SMP data specialist with the CHA authorized to speak about the case, but not directly involved in it. 'You have an affinity or a trust relationship with this individual and you think they're going to be ethical and honest.'

In the $5.9 million case, a beneficiary told the CHA staff 'she had responded to an ad in a Vietnamese newspaper for free medical services and equipment,' Nozaki explains. She was then 'taken to a doctor who gave her a quick exam,' and had blood drawn. The woman left the office 'with a case of a liquid drink like Ensure.' Of course she had given the doctor's office her Medicare number.

Suspicions Raised
When the beneficiary received her Medicare summary notice and saw what had been billed, she brought her documents and concerns to the fraud patrol. She 'had been to one of our presentations and understood about Medicare fraud, and because of that she knew what to look for,' Nozaki said. Also, the woman was able to come forward because CHA had someone fluent in Vietnamese who could translate her concerns.

The SMP staff did some research and referred the case to the Zone Program Integrity Contractor, Medicare's contractor for California, which works in cooperation with HEAT, the Health Care Fraud Prevention and Enforcement Action Team of the U.S. Department of Health & Human Services.

CMS Steps In
Investigators for Medicare requested, but were unable to obtain medical records for the services in question, and apparently had other claims as well that were in the process of being paid to that doctor or clinic, Nozaki said.

The Centers for Medicare & Medicaid Services proceeded to assess overpayment for what is called 'the entire claims universe, for the provider, Nozaki says. This took years, because the case started in 2007.

Julie Schoen, California's SMP director says that big recoveries like this one often involve not just one doctor or clinic, but unscrupulous 'fraud rings, in which several doctors prescribe things that aren't needed, and might work with a durable medical equipment supplier.

Typically, she says, they'll bill for a power-operated wheelchair that can cost $10,000 or more, and if the beneficiary receives a wheelchair at all, it might be a $1,000 wheelchair instead.'

Assets Seized; Fraudsters Jailed
Schoen declined to give details, but said that in cases where investigations 'closed' in 2013 were attributed to tips from the CHA, 'several people did go to jail. Federal officials 'seized a lot of assets, bank accounts. They take the Lamborghini, the jewelry, and their homes.'

It might seem that beneficiaries should know better without the CHA. But Schoen said that they are told by scammers, ''Medicare wants you to have this,' or 'this is how Medicare works.' Or maybe they think Medicare thinks they'll need a wheelchair in the future, so that's why they get it now. Especially for people who may not speak English, it makes sense to them.'

Sometimes, it's not doctors, but hospitals caught cheating Medicare or Medicaid. 'We've had people with extra little things stuck in their hospital bills. The most egregious one we saw was a person who went in for rotator cuff surgery, and the claim that was submitted included a retinal transplant. They said it was just a typo,' Schoen said.

Schoen says she's seen more aggressive efforts to catch dishonest claims in the last five years than since she started with the program in 1997 when the fraud program was created. Its mission was 'to recruit and train retired professionals and other senior citizens to recognize and report instances or patterns of healthcare fraud,' according to the OIG report. Now, she says, the more aggressive efforts are starting to bear fruit.

Education Stops Fraud
Last year there were 54 patrol programs with more than 5,000 active volunteers and paid staff members. They conducted more than 150,000 counseling and group education sessions at senior citizen centers and civic organizations such as the Rotary Club.

The California program by itself had 694 volunteers, more than any other state.

Overall, the SMP program may be criticized for not finding the kinds of big fraud cases associated in whistleblower litigation. Comparatively, the amounts recovered in 2013 and in previous years are miniscule.

For example, in 2012 the state with the largest recovery was Georgia, which saved Medicare $3.9 million. In 2011, California again topped recoveries, but by a pittance of $5,071. In most recent years, more than two-thirds of the state programs recover nothing.

But program officials say they believe they stop a lot of fraud through educating seniors and Medicaid beneficiaries on how to spot a scam. 'We don't know how many people who got a phone call just hung up, and did not give up their Medicare number,' Schoen said.

The OIG apparently agrees.

'It is not always possible to track referrals to Medicare contractors or law enforcement from beneficiaries who have learned to detect fraud, waste, and abuse form the projects,' the report says. 'Therefore, the projects may not be receiving full credit for savings attributable to their work.'

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