How to brazenly steal $100 billion from Medicare - CNBC

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Inside the mind of criminals: How to brazenly steal $100 billion from Medicare and Medicaid
by Contessa Brewer
March 9, 2023

• Medicare and Medicaid programs are being brazenly targeted by sophisticated criminals.
• Estimated annual fraud tops $100 billion, but investigators say it’s likely much higher.
• A convicted fraudster tells CNBC it’s easy to steal from the health-care programs because there aren’t enough agents to keep up with the various schemes.

A nondescript suite of offices in a bland building tucked in a quiet Miami suburb seemed as good a place as any for a medical supply company to rent some office space.

But this company rented space two floors above a regional office of the U.S. Department of Health and Human Services’ criminal investigative unit. It also tried billing Medicare more than $500,000 for various medical equipment — such as braces, orthotics and wheelchairs — for patients who didn’t exist.

During a routine check by HHS’ Office of Inspector General, which investigates Medicare and Medicaid fraud, special agents in Florida noticed that a local company had recently changed owners and had another address in their building. But that location didn’t have any actual employees. It was no more than a mail drop, a physical location of a shell corporation designed to make it look legitimate on paper, said Omar Pérez Aybar, special agent in charge for Florida.
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Ripping off Medicare is ‘easy’

“It’s just so easy. It’s unbelievable,” said one Miami man, who admitted that he used to make a living by stealing from Medicare.

“You’ll be surprised. For money, they’ll do anything,” he said, asking not to be identified for fear of retribution by people he worked with in the criminal underworld. “It’s always been like that. And people keep on — they get caught, they get out, and they’ll do it all over again.”

He was arrested and charged with running an illegal pill business, according to agents who worked his case. The scheme involved multiple players who were all on the take and got a cut of the windfall from defrauding Medicare, the special agents said.

Describing the scheme, the fraudster said he recruited patients to get a prescription from a doctor that was then filled at a pharmacy and paid for by Medicare. He would then remove the label and “wash” the bottle to make it look new before reselling the pills to a wholesaler, which would sell them back to that pharmacy or another one that was in on the deal, he said. The same pills could be sold and resold multiple times with different phony patients, billing Medicare each time.
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Still, as Pérez Aybar points out, there’s always another fraudulent operation ready to bilk the system.

“South Florida, without question, is the ground zero for health-care fraud, but it’s only one state. There are 49 others and territories where these types of schemes are occurring,” he said.

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