A wealthy Miami Beach health care executive, who owned and operated a network of more than 30 nursing homes and assisted living facilities in South Florida, was sentenced last week to 20 years in prison for orchestrating what prosecutors described a massive $1 billion Medicare fraud scheme.

The indictment charged the owner of the facilities, along with a hospital administrator and a physician's assistant with conspiracy, obstruction, money laundering and health care fraud in connection with the scheme, which has been called “the largest single criminal health care fraud case ever brought against individuals by the Department of Justice.”

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.

How Health Care Fraud is Committed

The majority of health care fraud in South Florida is committed by individual health care providers. The most common types of fraud indicted in the Southern District of Florida include:

• Billing for services that were never rendered-either by using genuine patient information, sometimes obtained through identity theft, to fabricate entire claims or by padding claims with charges for procedures or services that did not take place.
• Billing for more expensive services or procedures than were actually provided or performed, commonly known as “upcoding”-i.e., falsely billing for a higher-priced treatment than was actually provided (which often requires the accompanying “inflation” of the patient's diagnosis code to a more serious condition consistent with the false procedure code).
• Performing medically unnecessary services solely for the purpose of generating insurance payments-seen very often in nerve-conduction and other diagnostic-testing schemes.
• Misrepresenting non-covered treatments as medically necessary covered treatments for purposes of obtaining insurance payments-widely seen in cosmetic-surgery schemes, in which non-covered cosmetic procedures such as “nose jobs” are billed to patients' insurers as deviated-septum repairs.
• Falsifying a patient's diagnosis to justify tests, surgeries or other procedures that aren't medically necessary.
• Unbundling – billing each step of a procedure as if it were a separate procedure.
• Billing a patient more than the co-pay amount for services that were prepaid or paid in full by the benefit plan under the terms of a managed care contract.
• Accepting kickbacks for patient referrals.
• Waiving patient co-pays or deductibles for medical or dental care and over-billing the insurance carrier or benefit plan (insurers often set the policy with regard to the waiver of co-pays through its provider contracting process; while, under Medicare, routinely waiving co-pays is prohibited and may only be waived due to “financial hardship”).

Prosecutors Must Prove Criminal Intent Beyond a Reasonable Doubt

As previously discussed in this blog, criminal intent plays a key role in health care fraud prosecutions. Prosecutors must prove criminal intent as an essential element to the crime of health care fraud beyond a reasonable doubt.

If there is a legitimate reason for your actions OR insufficient evidence to prove that you intended to commit health care fraud, there is a good chance that the government will be forced to dismiss the case against you or that you should fight the charge in front of a jury.

Medicare Fraud is Prevalent in South Florida

Although the majority of health care fraud is committed by individual health care providers, law enforcement agencies and health insurers in South Florida have witnessed in recent years the migration of some criminals from illegal drug trafficking into the safer and far more lucrative business of perpetrating fraud schemes against Medicare, Medicaid and private health insurance companies.

In South Florida alone, government programs and private insurers have lost hundreds of millions of dollars in recent years to criminal rings – some of them based in Central and South America – that fabricate claims from non-existent clinics, using genuine patient-insurance and provider-billing information that the perpetrators have bought and/or stolen for that purpose. When the bogus claims are paid, the mailing address in most instances belongs to a freight forwarder that bundles up the mail and ships it off shore.