U.S. cracks down on healthcare fraud


Dr. Anne Peters knew something was wrong when a fellow physician called to find out why she had been ordering so many MRIs for her patients.

The Los Angeles internist said she tried to alert authorities that someone was illegally using her physician identification and Medicare billing numbers to submit phony claims.

For months, Peters said, she couldn’t get anyone to listen. Because thieves had recruited or created phantom patients, the doctor had no way of resolving the problem. “Every agency told me the victim — i.e., the patient — had to report the fraud,” Peters recalled.


On Thursday, top Obama administration officials outlined new federal enforcement efforts to combat such healthcare fraud, saying quickly expanding criminal enterprises are costing taxpayers billions of dollars each year.

During a healthcare fraud summit in Los Angeles, Atty. Gen. Eric H. Holder Jr. and Health and Human Services Secretary Kathleen Sebelius said their agencies were jointly targeting fraud in the federal Medicare and Medicaid programs. They said the initiative, launched in May 2009, had so far produced more than 580 criminal convictions and recovered more than $2.5 billion in fraudulent proceeds.

“Our healthcare system is essentially under siege by criminals intent on lining their own pockets at the expense of the American taxpayers,” Holder told the gathering of law enforcement officials, regulators, healthcare executives and others at Los Angeles City College. “In Los Angeles, these crimes have reached crisis proportions, driving up healthcare costs for everyone and also bringing the long-term solvency of our essential Medicare and Medicaid programs into doubt.”

Sebelius said the federal Centers for Medicare and Medicaid Services issued a final regulation Thursday to protect seniors against fraudulent medical equipment and supplies vendors.

The new rule will require suppliers of prosthetics and other items to maintain proper ordering documentation and to remain open to the public at least 30 hours a week. It also will bar such companies from using cellphones or pagers as primary business phone numbers.

“The days when you could just hang a shingle out over a desk and start submitting claims are over,” Sebelius told the gathering.


Sebelius also recounted Peters’ saga, fresh from a firsthand look at the scene of the alleged crime. Before the summit, Sebelius and Peters paid a visit to the Van Nuys office building that housed the purported radiology clinic that conducted the phony MRIs.

Sebelius apologized to Peters for the lackluster response to her reports of identity theft and assured her that the new healthcare reform law armed the government with new weapons to fight such fraud. Peters’ complaint led to the arrest and prosecution of six people involved in what federal officials described as a well-organized medical fraud ring. Before it unraveled, the ring stole the identities of 19 physicians and used them to defraud Medicare of nearly $7 million.

“There is a new sheriff in town,” Sebelius told Peters.