Submitted by Antonio Arias, MBA, CHBME on Tue, 07/18/2017 - 8:00

shutterstock_552159256.jpg

Medicare Fraud: Doctor Convicted for Multi-Million Dollar Scheme

Instances of fraud in the U.S. healthcare system are anything but rare. Across the entire medical billing landscape, estimates put amount of health care expenditures lost to fraud between 3 and 10 percent.

Medicare is often perceived as a ripe target for fraud, but its rates of financial crime fall somewhere in the same range spotlighted above. While the rate is high, also an area where enforcement efforts are both active and effective: The Medicare Fraud Strike Force has a 95 percent conviction rate with jail terms averaging four years.

News of fraudulent Medicare activity only breaks when charges are filed are convictions are handed down, making it difficult to assess how much it happens among providers generally. When the big takedowns occur, in instances involving high dollar amounts, there’s usually a vast amount of collusion involved; court outcomes typically show that the fraud was a group effort carried out by a number of physicians in tandem.

Case in point: In June 2016, the Department of Health and Human Services Office of Inspector General, along with state and federal law enforcement partners, executed the largest health care fraud takedown in history. Approximately 300 defendants in 36 judicial districts were charged with participating in fraud schemes involving about $900 million in false billings to Medicare and Medicaid.

That dynamic - the common prevalence of multiple defendants in a given case - makes a recent (and massive) Medicare fraud conviction all the more unusual. In April 2017, a single physician, eye doctor Salomon Melgen, was convicted after a seven-week trial for stealing tens of millions of dollars from Medicare while administering unnecessary medical procedures. He was found guilty of 67 counts, including healthcare fraud, falsifying medical records and submitting fictitious Medicare claims.

The billing dispute went on for eight years, during which time the Melgen reportedly solicited help - possibly in the form of bribery - from New Jersey Senator Robert Menendez. (Melgen faces a separate criminal trial for his dealings with Menendez.)

Melgen’s medical practice reportedly billed Medicare more than $190 million between 2008 and the end of 2013. The practice received more than $105 million from Medicare, thanks in part to a bunch of false diagnoses and useless (and in some cases obsolete) procedures.

Melgen’s medical billing practices were put under the spotlight by both the defense and the prosecution: Melgen’s attorneys claimed his use of a faulty medical billing system, as well as coding mistakes, led to the financial misconduct - asserting there was no intent to defraud.

But as those associated with any trusted medical billing firm already understand, it’s completely unfeasible to attribute $105 million as the result of excusable mistakes. Assistant U.S. Attorney Alexandra Chase put it well in closing argument to the jury.

“Mistakes happen once or twice,” Chase said. “When it happens over and over and over again, you know it’s deliberate.” (Thankfully, the jury knew it too.)

 

Are you interested in learning more revenue cycle management tips? Visit our blog! 

...and if you need help from a medical billing company...

CONTACT A BILLING EXPERT

Topics: Practice Management, Medical Billing Company, Meaningful Use Stage 2

EHR in the News