Department of Health and Human Services and Department of Justice Fight Infusion Therapy Fraud

Strike Force Prosecutions and Demonstration Project Target Fraudulent Business Practices in South Florida

HHS Secretary Mike Leavitt today announced an initiative designed to protect Medicare beneficiaries from fraudulent providers of infusion therapy.  This two-year project will focus on preventing deceptive providers from operating in South Florida . Providers there will be required to reapply to be a qualified Medicare infusion therapy provider.

“HHS continues to work with the Department of Justice to protect the public and Medicare by stopping fraud before it happens,” Secretary Leavitt said.  “This demonstration project works to bar unlawful infusion therapy providers from entering the Medicare billing system.”  The new infusion therapy demonstration follows similar demonstration projects previously announced by HHS. 

The demonstrations target fraudulent billing by suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) in South Florida and Southern California, and home health agencies in the greater Los Angeles and Houston areas.  These geographic areas have shown a high frequency of DMEPOS or home health care fraud.  South Florida is also one of the high-risk areas for fraudulent billing by providers of infusion therapy. 

The Department of Justice (DoJ) is supporting HHS's new controls through a surge in prosecutions for health care fraud in South Florida .  In May, the DoJ and HHS announced the work of a multi-agency team of federal, state and local investigators designed specifically to combat Medicare fraud through the use of real-time analysis of Medicare billing.  Since implementing the “phase one” Strike Force in Miami last March, DoJ prosecutors working with Assistant U.S. Attorneys from the Southern District of Florida have filed 47 indictments charging 65 individuals and/or entities with health care fraud in schemes that collectively billed Medicare more than $345 million.  The Strike Force has convicted 26 defendants to date; 23 by plea agreement and three have been convicted in jury trials. 

“Through real-time access to Medicare billing data, the Medicare Fraud Strike Force has allowed us to move quickly to make arrests and bring prosecutions as rapidly as possible.  The Department of Justice remains fully committed to vigorously protecting the financial integrity of the Medicare program,” stated Attorney General Alberto Gonzales.

The Strike Force supplements the ongoing health care fraud enforcement efforts of the United States Attorney's Office in the Southern District of Florida, which has been among the leading offices in combating health care fraud nationwide, presently accounting for over 20 percent of all health care fraud defendants charged nationally.  Since announcing a federal-state health care fraud initiative over 18 months ago, the United States Attorney's Office has filed at least 157 criminal cases charging at least 266 defendants with federal violations in various health care fraud schemes and significant civil cases and settlements.  Collectively, defendants and subjects billed Medicare over $300 million and received more than $150 million in reimbursements in cases that preceded the announcement today.  The vast majority of these cases involved fraudulent DME or Human Immunodeficiency Virus (HIV) infusion fraud schemes.  

The Centers for Medicare & Medicaid Services (CMS) will now require infusion providers who operate in several South Florida counties to immediately resubmit applications to be a qualified Medicare infusion therapy provider. Those who fail to reapply within 30 days of receiving a notice to reapply from CMS will have their Medicare billing privileges revoked.  Infusion therapy providers that fail to report a change in ownership; have owners, partners, directors or managing employees who have committed a felony; or, no longer meet each and every provider enrollment requirement; will have their billing privileges revoked.  Infusion providers that successfully complete the reapplication process may be subject to an enhanced review, including site visits, based on risk assessment.  

CMS will also issue Medicare Summary Notices to beneficiaries in South Florida on a monthly basis, instead of quarterly, to support more frequent scrutiny of infusion provider billings.

“We want to test and compare different fraud prevention tools in these demonstration projects,” explains CMS Acting Deputy Administrator Herb Kuhn.  “Enhancing our review of these providers will go a long way toward eliminating those who do not meet the needs of beneficiaries and the promises of the program.”

The Medicare infusion therapy scam includes recruitment of HIV/AIDS patients by paying them to come to clinics and receive non-rendered or medically unnecessary infusion services.  In 2004, Florida had fewer reported AIDS cases than California and New York, yet its total submitted Medicare charges for these cases was three times higher than California and five times higher than New York.  And the number of infusion services billed in Florida tripled from 2004 to 2005, jumping from 4.3 percent to 15 percent of national billing.

Steps have been implemented in Florida to control fraudulent activities including joint Federal and State site visits, prepayment edits and automatic denial of clinically unbelievable dosages, payment suspensions, provider enrollment onsite visits and other activities.  Corrective actions from these steps have resulted in denial of fraudulent and medically unnecessary Medicare infusion claims with charges in excess of $1.8 billion in 2005 and 2006.

“CMS has taken and will continue to take aggressive action to curb infusion therapy fraud and other organized fraud activities” Kuhn said.

This week, the Strike Force filed charges against a medical biller who submitted approximately $170 million in fraudulent medical bills on behalf of approximately 75 health clinics that purported to specialize in treating patients with HIV.  From roughly October 2002 through April 2006, HIV clinics in South Florida serviced by this biller, Rita Campos and her company R and I Billing, allegedly provided bills to Medicare that indicated patients were being injected with excessive amounts of HIV medications.  Based on the claims filed by Campos , Medicare paid more than $100 million for these fraudulent services.  This investigation remains ongoing. Eight other defendants, including Eduardo Moreno, owner of RTC of Miami, an infusion clinic that billed Medicare for more than $5.2 million between August 2006 and March 2007, are fugitives.  Moreno , who also owns multiple DME companies in addition to the infusion clinic, was arrested on April 7 after being named in a six-count indictment on fraud charges but fled following his release on bail. 

The U.S. Marshals Service is launching a special project to track down Medicare fraud fugitives in South Florida .

HHS has several programs to help Medicare beneficiaries protect themselves against fraud.  The Senior Medicare Patrol Program, established by the Administration on Aging, educates and assists beneficiaries in protecting their Medicare information, detecting Medicare billing errors and reporting potential health care fraud and abuse.

Instances of potential Medicare fraud also can be reported to the HHS Office of the Inspector General at 1-800-HHS-TIPS (800-447-8477) or HHSTips@oig.hhs.gov .

###

The U.S. Department of Health and Human Services, Administration on Aging (AoA), works with a nationwide network of organizations and service providers to develop a comprehensive and cost-effective system of long-term care that helps elderly individuals maintain their independence and dignity in their homes and communities. For more information about the AoA, please contact: U.S. Department of Health and Human Services, Administration on Aging, Washington, D.C. 20201, Phone (202) 401-4541.