111 Charged in Medicare Scams Worth $225 Million

Federal authorities charged more than 100 doctors, nurses and physical therapists in nine cities with Medicare fraud Thursday, part of a massive nationwide bust that snared more suspects than any other in history.

More than 700 law enforcement agents fanned out to arrest 111 people accused of illegally billing Medicare more than $225 million. The arrests are the latest in a string of major busts in the past two years as authorities have struggled to pare the fraud that's believed to cost the government between $60 billion and $90 billion each year. Stopping Medicare's budget from hemorrhaging that money will be key to paying for President Barack Obama's health care overhaul.

Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder partnered in 2009 to allocate more money and manpower in fraud hot spots. Thursday's indictments were for suspects in Miami, Los Angeles, Dallas, Houston, Detroit, Chicago, Brooklyn, Tampa, Fla., and Baton Rouge, La.

A podiatrist performing partial toenail removals was among 21 indicted in Detroit. He is accused of billing Medicare about $700,000 for the costly and unnecessary procedures, which authorities said amounted to little more than toenail clippings. The podiatrist billed Medicare for 20 nail removals on three toes of one patient, according to the indictment. He charged Medicare about $110 for each procedure.

A Brooklyn, N.Y., proctologist was charged with billing $6.5 million for hemorrhoid removals, most of which he never performed. He claimed he performed 10 hemorrhoid removals on one patient, which authorities said is not possible.

Authorities also busted three physical therapy clinics in Brooklyn, run by an organized network of Russian immigrants accused of paying recruiters to find elderly patients so they could bill for nearly $57 million in physical therapy that amounted to little more than back rubs, according to the indictment.

In Miami, two doctors and several nurses were charged with swindling $25 million by writing fake prescriptions recommending nurses and other expensive aids to treat homebound patients, authorities said. The services were never provided.

In total, nearly three dozen defendants were charged in Miami in various scams that topped about $56 million.

Thursday's totals exclude busts two days earlier in Miami that netted 21 suspects accused of bilking $200 million from Medicare.

"These unprecedented operations send a clear message. We will not tolerate criminals lining their pockets at the expense of Medicare patients and taxpayers," HHS Inspector General Daniel R. Levinson said in prepared remarks to be delivered at a news conference in Washington.

For decades, Medicare has operated under a pay-and-chase system, paying providers first and investigating suspicious claims later. The system worked when the agency was paying hospitals and institutions that couldn't close up shop and flee the country if they'd been overpaid. But as Medicare has expanded to one of the largest payer systems in the world, he agency has struggled to weed out crooks. There are about 1.3 million licensed suppliers nationwide with 18,000 new applications coming in every month.

Sebelius has promised more decisive action on the front end, by vigorously screening providers and stopping payment to suspicious ones, under greater authority granted by the Affordable Care Act.