Probe: Dead Doctors Used In Medicare Scam

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Sellers of wheelchairs, drugs and other medical supplies collectedas much as $93 million in fraudulent Medicare claims based onprescriptions from doctors who actually were dead, some for 10years or more, a congressional investigation has found.

Millions more dollars will continue to be at risk of waste andfraud each year in the billion-dollar government-run health programfor the elderly and disabled unless Medicare officials addressflaws that they've promised to fix since at least 2001, accordingto the probe.

The bipartisan report by the Senate Homeland Securityinvestigations subcommittee, obtained Tuesday by The AssociatedPress, reviewed millions of reimbursement claims for medicalequipment and supplies from 2000 through 2007.

It found that Medicare paid out between $60.3 million to $92.8million to medical suppliers even though they involved claims inwhich the prescribing doctor listed had been dead for at least 12months.

In Florida, which has a high number of Medicare claims, more than$2 million alone was paid to medical suppliers from 2002 to 2007for equipment such as oxygen machines, prosthetics and diabeticequipment that claimed to have prescriptions from 114 deceaseddoctors. As many as 484 claims totaling $544,789 were filed underan ID code for a single deceased doctor who had died in 1999.

In all, about 7 percent of all deceased doctors and 27 percent ofdead doctors in Florida still had active Medicare ID codes thatcould be used improperly to seek reimbursement.

The Centers for Medicare and Medicaid Services and its contractorssince have switched to a new ID system as of May that will wipeaway many of those outdated codes, but unless broader changes areimplemented, the same problems of potential waste and fraud willarise again, the investigation found.

Responding in the report, CMS did not challenge the Senate findingsbut said it was taking several steps to help avoid future problems.For example, the agency said it was working to strengthen federalregulations involving documentation Medicare providers must keepfrom prescribing physicians. CMS said it also planned to work withthe Social Security Administration to get monthly updates of theagency's file on recent deaths.

In an additional statement Tuesday, CMS spokesman Jeff Nelliganstressed that the agency was committed to reducing Medicare wasteand abuse, including separate efforts to promote competitivebidding for medical equipment and supplies.

"We believe the initiatives we have initiated will address many --if not all -- of the issues surrounding the payments for claims tothose health care providers who are using invalid or inactivephysician numbers," Herb Kuhn, deputy administrator of CMS, wrotein the report.

The Senate report calls for CMS and its contractors to adopt newprocedures to update physician data to account for deaths on a morefrequent basis, such as every 90 days instead of roughly 15 months.It also urges regular audits to ensure improper claims are notbeing filed.

"Using the ID numbers of dead doctors, these scam artists havetreated Medicare like an ATM machine, drawing money out of thegovernment's account with little fear of getting caught," said Sen.Norm Coleman, R-Minn., the top Republican on the Senate panel.

Coleman said the waste estimate would be much higher ifinvestigators counted claims that involved all deceased doctors,not just those dead for at least 12 months. "It's time to closethis $100 million loophole."

CMS made promises to fix problems shortly after the Health andHuman Services Department inspector general in 2001 found roughly$91 million over a one-year period was improperly paid out forMedicare claims with invalid or inactive doctors' ID codes.

At the time, CMS said it would conduct regular reviews and updateits automated claims system to block payment of any claims withinvalid codes. But the agency eventually backtracked, saying itwould focus instead on educating Medicare providers on theirresponsibility in ensuring valid ID codes are used.

The congressional study said that decision by CMS might have provedcostly, noting that 63 percent of the questionable claimsinvestigators identified as involving doctors deceased for a yearor more were paid with dates of service after April 1, 2002, thedate after which Medicare had promised it would reject such claims.

In fact, about 16 percent of the estimated 478,500 claims found tobe questionable, or about 51,000 claims worth $4 million, involvedprescribing doctors who had been dead 10 or more years before theservice date on the claims.

"This oversight failure resulted in tens of millions of dollars inimproper payments," investigators wrote.

In an additional statement Tuesday, CMS spokesman Jeff Nelligansaid the agency was committed to reducing waste and abuse We arealways looking for ways to improve Medicare's program integrity andstrengthen our stewardship of the Medicare trust funds."

The Senate committee largely declined to identify suppliers orreveal locations due to privacy concerns, but in interviewsgenerally described many of the offenders as small businesses thatapparently were created for the purpose of committing fraud.Investigators were reviewing the evidence to determine which casesmight be referred to law enforcement for prosecution.

In one case, Miami-based Professional Gluco Services Inc. submitted83 questionable claims between December 2005 and July 2006 and waspaid $93,171, according to the report. Last November, Gluco'sowners pleaded guilty to criminal charges of submitting claims formedical equipment that had not been ordered by a doctor nordelivered to a Medicare patient.

"The slipshod procedures that let these claims get through are aninsult to U.S. taxpayers," said Sen. Carl Levin, D-Mich., whochairs the Senate panel. "It is long overdue to shut the door onthis multimillion-dollar abuse."

The report comes as lawmakers in both parties seek ways to trimspending in the rapidly growing domestic entitlement program --which has been cited for many years by the GovernmentAccountability Office as a high-risk for fraud and waste -- whilepreserving benefits for millions of the elderly and disabled.

This week, Senate Democrats are pushing legislation to preventscheduled Medicare cuts to doctors' payments by trimming paymentsto private insurers that they consider too generous, a move thatPresident Bush and some Republicans oppose.

Sen. John McCain, R-Ariz., the likely Republican presidentialnominee, has pledged to balance the federal budget by the end ofhis first term if elected in part by curbing wasteful spending andoverhauling costly entitlement programs such as Social Security.

The Senate investigation based its findings on a statistical sampleof 1,500 deceased physicians who had been assigned ID codes forMedicare reimbursement use and on additional data it obtained forFlorida. CMS was asked to provide data on Medicare claims involvingthose deceased doctors that had service dates between Jan. 1, 2000and Dec. 31, 2007.