You may have been hearing the commercials lately. Medicare has been running ads that say they will never call and ask you to give them your Medicare number. Well, now we have an example of why the agency felt it needed to run that ad.
According to a press release from the U.S. Attorney for the Southern District of Texas, the Marcella Herrara, his wife, and a former employee, Ramon De La Garza, have pled guilty to collectively bilking Medicare and Medicaid out of more than $11.1 million. According to the press release, Mission Trio Convicted of Health Care Fraud in Probe by State and Federal Officials, the trio ran a McAllen, Texas, durable medical equipment provider called RGV DME. In order to boost their take from the Government, they hired marketers to pose as Medicare or Medicaid employees and to call unsuspecting people. They asked the victims for their Medicare and Medicaid numbers, and then they used those identification numbers to submit false claims for “power wheelchairs, incontinent supplies, hospital beds and mattresses as well as other DME supplies.” In other words, they pretended that their durable medical equipment (“DME”) company was providing wheelchairs and other supplies – when in fact those supplies had not been prescribed and were never provided to the “patients” who supposedly needed them.
I follow Medicare and Medicaid fraud closely since I am a lawyer representing whistleblowers. In the past few years, I have seen an astonishing amount of fraud connected to the durable medical equipment field.
The field seems to offer a tantalizing combination of less oversight and big-ticket items that only need to be provided once. The DME providers are much less regulated than, say, hospitals (although there have been instances of similar fraud in medical clinics and hospitals, generally this type of fraud has come from people who stole a doctor’s i.d. and pretended to bill for real patients).
Additionally, while a person has to get a medical degree to be a doctor. Having to earn that degree makes most doctors think twice before cheating the Government – they have a license to practice medicine that can be taken away. By contrast, the barriers to entering the durable medical equipment field are very low.
The U.S. Attorney’s press release is about the criminal case against these three individulas, The press release does not mention a whistleblower or the False Claims Act, so presumably the Government caught this fraud on its own.
But the fact is that the vast majority of the time, the Government misses the fraud. Most of the claims are with Medicare, and most of the people who receive Medicare are elderly. Many of these elderly people are ill and cannot flyspeck their lengthy Medicare statements to determine whether Medicare is getting billed for care or items they have not received. Under Medicare rules, the patient is supposed to be billed for a portion of the care, but of course these unscrupulous DME providers do not dare bill the patients, knowing the fraud would quickly be exposed.
On several occasions, Medicare fraud cases have been brought to light when an adult child steps in to help an aging parent. The child happens to look through the statement Medicare sends, and starts to ask questions. “What wheelchair?” “What hospital bed?” “What medically-prescribed mattress?”
More often, these claims are revealed when an employee of a DME company recognizes that the company is billing for a good deal more medical equipment than it is providing.
Under the False Claims Act, if these employees or adult children alert the Government to the fraud by filing a qui tam lawsuit, they may be entitled to claim a percentage of the amount the Government recovers (including criminal fines).