Top 10 Shocking Fraud Examples

1. Improper Payments - Improper payments - According to a January 2009 GAO report, improper payments to providers that submit inappropriate claims can result in substantial financial losses to states and the federal government. Medicaid payments can be improper for various reasons, such as if people served are not eligible for Medicaid. Measuring improper payments within the Medicaid program is important to recouping and reducing them. For fiscal year 2007, CMS issued its first full-year Medicaid improper payment rate estimate of 10.5 percent, or $32.7 billion (the federal share is $18.6 billion). Identifying and reducing improper payments in Medicaid are important first steps toward improving the integrity of the program.^[1]
2. Deceased Doctors - The Senate Permanent Subcommittee on Investigations recently reviewed Medicare claims from 2000-2007 and found significant payments for medical services ordered by over 16,500 dead doctors – between $60 million to $92 million.  Some doctors had been deceased for more than 10 years ^[2] 
3. Sham Companies - The U.S. Government Accountability Office found that almost $1 billion of $10 billion in annual Medicare payments made for durable medical equipment (DME) is improper.  GAO highlighted this lack of federal oversight by setting up two fictitious DME supplier companies with no clients or medical inventory to supply to patients, both of which were nonetheless approved by CMS for Medicare billing privileges.  A specific individual, after stealing beneficiary numbers and physician identification numbers, submitted $5.5 million in claims for three fraudulent offices.^[3] 
4. Abusing Homeless - Facilities in southern California allegedly churned thousands of indigents through their sites and billed Medicare and Medi-Cal for costly and unjustified medical procedures.  These facilities ran street-level operations, where runners collected indigents for unnecessary hospital services, and dropped them back off on skid row by ambulance.^[4] 
5. False claims for HIV Drugs – In southern Florida, dozens of clinics and doctors billed Medicare for more than $1.1 million in false claims for obsolete HIV-infusion therapy for a single Miami-Dade County patient, who then collected thousands of dollars in kickbacks for selling his government-issued healthcare number to them.  The patient then used the money to buy crack cocaine.^[5]  In fact, in 2007, Florida accounted for 80% of drugs billed across the entire United States for Medicare beneficiaries with HIV/AIDS, even though the region only had about one of 10 eligible patients.^[6]
6. Goods Never Received - A recent enforcement effort in Miami led to charges against 120 people and a corresponding $1.4 billion drop in Medicare billing in the area.  Federal officials pointed to a red electric wheelchair seized from an illicit company. The wheelchair should cost about $5,000; by billing Medicare over and over, while never delivering the wheelchair to an actual patient, criminals charged $5 million for this one item alone.  A retired federal judge also got notice from Medicare explaining a recent treatment he had received, including two prosthetic arms.  FBI agents came to his house to take pictures of his real arms to prove that they had not, in fact, been amputated.  No cross-checks had been made within Medicare to verify whether the patient actually had amputations performed.^[7]
7. Stolen Medicare ID– An 82-year-old patient had her Medicare ID stolen.  Fake providers then used that number to bill Medicare for tens of thousands of dollars – for care and equipment she never got and didn’t need – including AIDS medicine, a wheelchair, and artificial knees, ankles, and an eye.  The patient complained to authorities on several occasions, but no prosecutions were ever made.^[8]
8. Incomplete Claims – Investigators from the Senate Permanent Subcommittee on Investigations found that, between 1995 and 2006, $4.8 billion in Medicare payments were made for bills submitted with diagnosis codes that were invalid of blank.  Some used smiley faces or exclamation points, but the bills were still paid.^[9]
9. Inappropriate Treatments– The Senate Permanent Subcommittee on Investigations reviewed bills submitted by medical suppliers from 2001 through 2006 and found over $1 billion in questionable claims.  For example, there were hundreds of thousands of claims for diabetes-related glucose test strips for patients who were diagnosed with the bubonic plague, leprosy, and cholera.  Their study also found walkers being issued and claimed for patients whose diagnosis codes included sinus congestion, paraplegia, and shoulder injuries.^[10]
10. One State Alone- In 2005, the New York Times estimated that NY Medicaid fraud reached into the tens of billions.^[11]  Some specific cases:

• A Brooklyn dentist “performed” as many as 991 procedures in a single day
• School officials enrolled tens of thousands of low-income students in speech therapy without the required evaluation, garnering more than $1 billion in questionable Medicaid payments.  One school official sent 4,434 students into speech therapy in a single day.
• Several criminal rings duped Medicaid into paying for an expensive muscle-building drug intended for AIDS patients, which was diverted to bodybuilders at the cost of tens of millions.