Built to be cheated

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NICK EICHER, HOST: Coming up next on The World and Everything in It: taking down fraud.

Last week, leaders of a joint anti-fraud task force announced big wins in quantifying and prosecuting healthcare fraud in the U.S.

WORLD’s Harrison Watters has the story from Washington.

HARRISON WATTERS: Acting Attorney General Todd Blanche said over the course of 14 days, the Department of Justice worked with state and territory attorneys general to indict more than 450 defendants.

BLANCHE: These individuals participated in health care fraud schemes involving over $6.5 billion in false claims submitted to Medicare, Medicaid, and other health care programs.

The DOJ also tracked down suspects abroad. FBI Director Kash Patel said the U.S. has extradited four alleged fraudsters since the beginning of June.

PATEL: One of those individuals, Herbert Leon Kimble, was apprehended in the Philippines. He's an American citizen. He had been bilking, allegedly, the system against Medicaid for billions of dollars since 2014. $1.2 billion in telemedicine specifically, alone.

Some schemes involved billing Medicare with stolen patient information. Other charges are tied to people allegedly performing procedures that were not medically necessary. In one case, a nurse in Nevada performed allograft surgeries on patients near death. 

Here’s Federal Trade Commission Chairman Andrew Ferguson:

FERGUSON: She was performing these skin substitute procedures on vulnerable elderly Americans in hospices and in nursing homes, and then submitting those claims.

A new West Coast Strike Force will continue to bring charges against people operating fraudulent hospice centers. Health and Human Services Secretary Robert F. Kennedy Jr. said the government has already closed down 800 hospices registered in Los Angeles.

KENNEDY: One of the ways that we've been able to detect that fraud is that in many of them the patients never die, they live forever, that's not supposed to happen in hospices, and this particular owner was actually going out and purchasing names from coroners of dead patients and then billing us for those.

In May, the Centers for Medicare and Medicaid—or CMS—deferred $1.3 billion in reimbursements for Medicaid services in California. But the administration says the state needs to provide more documentation justifying expenses to combat widespread fraud.

Kennedy says much of the fraud stems from paying claims first and investigating later. That’s changing.

KENNEDY: We are deploying advanced artificial intelligence and data analytics to identify fraudulent billing patterns in real time, stop improper payments before they occur, and strengthen oversight across federal health programs. Our objective is straightforward: stop the fraud before it happens.

Additionally, the Department of Homeland Security and Federal Reserve are now sharing data with HHS. The administration says increased oversight is already leading to savings. CMS Administrator Mehmet Oz reported $42 billion in savings last year.

OZ: Two thirds of those savings, $28 billion, came from simply locking the front door, never letting the money go out the door. That's provider revocations, automated claim denials, all the things that should have been done years ago, no longer will that money be taken out of your pocketbooks.

One reason for the delay is while Medicare is run directly by the federal government, Medicaid is a joint program with states. Some, like Ohio, are cooperating to step up fraud investigations. Others, like California, have not committed to taking additional actions. McDonald says overall, more states are cooperating.

MCDONALD: Last year I believe there were 13 states that participated with us in our take down, and this year we are in the high 40s of those who have come to the table to add their resources to come work with us…

So far, investigators have seized $182 million in assets, from cash to luxury cars and six-figure jewelry. Getting back more of the billions fraudulently paid out will take time, and court sentences.

Reporting for WORLD, I’m Harrison Watters.

Editor’s note: A previous version of this report misidentified FTC Chairman Andrew Ferguson.

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