Scams use dead doctors' IDs

WASHINGTON - Medicare scammers using the identities of hundreds of dead doctors in Minnesota and across the nation have bilked the government for an estimated $100 million over the past decade, according to a congressional report.

Using the ID numbers of deceased doctors, sometimes more than 15 years after they died, fraud artists have been able to treat Medicare like an ATM, making withdrawals at will, according to federal investigators.

The probe, depicting flawed or nonexistent controls in the massive health insurance program for the aged, will be released today by the Senate's Permanent Subcommittee on Investigations, led by Sens. Carl Levin, D-Mich., and Norm Coleman, R-Minn.

Coleman, who initiated the investigation as the committee's chairman in 2006, said the Medicare lapses uncovered in the fraud investigation are "unacceptable."

"The sad truth is that the Medicare system is vulnerable to fraud," Coleman said. "The suppliers simply figured out that there isn't a guard at the front gate to prevent improper payments."

Levin, the current committee chairman, said that instead of identifying and rejecting the fraudulent claims, Medicare has simply been paying them. "The slipshod procedures that let these claims get through are an insult to U.S. taxpayers," he said.

In a random sample of 1,500 of Medicare doctors who were known to have died between 1992 and 2002, congressional investigators found 734 -- nearly half -- tied to claims after their death over the last eight years. Eleven of those were doctors in Minnesota.

Extrapolating those figures to all Medicare doctors who died during the period of the study, investigators concluded that the IDs of as many as 274 Minnesota doctors have been used in 4,265 fraudulent claims. The total loss involving claims in the state could be as much as $455,000.

Nationwide, Medicare appears to have paid nearly 500,000 improper claims since 2000 involving more than 18,000 deceased physicians, according to the committee's report. The losses are estimated at nearly $100 million.

Docs did nothing wrong

Most of the claims in the multi-million-dollar scam involve medical equipment and supplies such as prosthetics and wheelchairs, not drugs or medical procedures.

For example, over a 24-month period from 2001 to 2002, Medicare paid $184-a-month to a California company that claimed it was supplying an oxygen concentrator to the patient of a Minnesota doctor who had died in 1997.

Medicare officials say they are correcting the problem, and in some egregious cases in Florida and elsewhere investigators expect federal and local prosecutors to press charges against alleged scammers, many of them individuals and small medical supply companies.

Senate investigators noted that officials of a Florida medical devices provider, Professional Gluco Services, were indicted last year and have pleaded guilty in connection with $14.3 million in allegedly false claims.

But Coleman and the investigators who work for his committee are declining to make additional names public, saying that some may be referred for criminal prosecution. They said they also don't want to violate the privacy of deceased doctors who did nothing wrong.

"Medicare is a noble program and it is quite disturbing that so many people would try to exploit the program for their own gain," Coleman said. "What's even more upsetting is that they would exploit the death of honorable physicians to help their scheme."

In every case study cited by the Senate committee, the deceased physicians were merely unwitting instruments in paper transactions that meant easy money for unscrupulous scammers. In one example, a doctor who died in 2001 had his ID number used in more than 3,800 claims submitted between 2002 and 2007, with payments totaling more than $354,000.

Bogus claims not new

The findings grew out of a broader probe of suspicious Medicare billings, which have long plagued the system. When committee investigators tried to track down prescribing doctors with unusually large numbers of claims, or claims in which the requested equipment did not seem to match patients' ailments, they ran into an unexpected problem.

"When I went to call some doctors, I was told that they were dead. That raised a flag for me," said Clifford Stoddard, a lead investigator on the Medicare probe.

Investigators noted that in the Minnesota case involving the oxygen concentrator, Medicare officials approved 24 separate claims -- one a month for two years. "That was 24 opportunities for Medicare to discover that the doctor was deceased," said Mark Greenblatt, chief counsel for the Republicans on the panel.

The problem of improper claims is not new for Medicare. A number of government agencies, including the Centers for Medicare and Medicaid Services (CMS), which administers the $400 billion a year program, have documented billions of dollars wasted in recent years because of mistakes, abuse and fraud.

A 2005 Government Accountability Office study found that about 7.5 percent of Medicare payments for medical devices and equipment are improper.

In a June 24 letter to Levin and Coleman, CMS Deputy Administrator Herb Kuhn said the agency "shares your concerns" and has undertaken steps to correct the problem. "We believe the initiatives we have initiated will address many -- if not all -- of the issues surrounding the payments for claims to those health care providers who are using either invalid or inactive physician numbers," he said.

Kevin Diaz • 202-408-2753