Mafia Tie to HME Calls CMS Oversight into Question

ATLANTA — Lured by quick money and short prison terms, the
Mafia and others involved in organized crime have infiltrated the
Medicare system, leaching millions of dollars in reimbursement for
home medical equipment that is seldom delivered and never needed,
according to an Associated Press report.

According to the Oct. 6 article, Mafia, Violent Criminals Turn to Medicare Fraud
by Kelli Kennedy, the Medicare system has proved an easy touch for
sophisticated criminals who can “easily net at least $25,000 a day
while taking a relatively modest 10 years in prison if convicted on
a single count.”

That’s lucrative enough for the Mafia and others to turn their
attention from drugs to health care, the article noted.

“We’ve seen more people that used to be involved in (dealing)
drugs … switching over to health care fraud because it’s not
as dangerous,” the AP quoted Miami FBI spokeswoman Judy
Orihuela as saying.

The report proved especially disturbing to those in the HME
sector, who have been battling erroneous press reports (another
surfaced this week on Fox News) and who have repeatedly called
on CMS to enforce the standards already in place that would help
curb such crime.

“Here’s the problem: Medicare gives these criminals provider
numbers,” said Michael Reinemer, vice president of communications
and policy for the American Association for Homecare. “This is
completely out of our control. We have recommended stronger
standards.”

CMS officials have long said they do not have the funds to
police the standards from the front end.

“It’s certainly true that they do not have the resources they
need, and that was part of [AAHomecare’s] 13-point
legislative action plan: to make sure that CMS has the funds to
do the job,” Reinemer said.

However, Reinemer said, the system is currently so lax it’s akin
“to having an open bank vault 24 hours a day and checking a few
times a week to see if any money is missing.”

Industry consultant Colette Weil said the infiltration of
organized crime into the HME sector calls into question CMS’
oversight of who gets provider numbers.

“What about looking at their rap sheet?” she asked. “What kind
of upfront, due diligence is [CMS doing]?”

Weil, managing director of Summit Marketing, Mill Valley,
Calif., said the report sparked memories of a book she bought about
the Mafia while visiting Sicily a few years ago. “The Mafia started
in lemons because that was Sicily’s number one [industry]. But
health care — medical equipment — was the second one,”
she said. “That wasn’t the only thing they were in, but it was
definitely an easy score over there.

“It’s an easy thing to scam,” Weil continued. “I think Medicare
takes a … long time to identify it, too. My guess is that
when [the Mafia] sees these other guys getting away with millions,
they think, ‘We’re smarter than they are and we can do it,
too.’”

Contacted by HomeCare, a CMS spokesman acknowledged the
AP story and said CMS has a program in place to curb
fraud, especially in the Miami area.

“First of all, this is an ongoing project that, to date, has
resulted in 20 Miami-Dade [home health agencies] being placed on
payment suspension, in addition to the first 13 HHAs that were
suspended when we first began the program,” he said. “We’ve also
conducted hundreds of beneficiary interviews to ensure they were
receiving the services and over 150 interviews with providers to
ensure they actually ordered the service.”

No figures were available as to how many HME providers have lost
Medicare privileges because of suspected fraud.

The spokesman also said CMS is banking on regulatory mandates to
help stem the tide of criminal infiltration.

“Those are some of the things that the whole process of
accreditation is addressing, and also site surveys and things like
that to ensure they are legitimate providers,” he said. “Our goal
is to — through things like accreditation — identify
them before we even get our first bill. The whole idea is
prevention so we can ensure that all we have are legitimate
providers.”

Still, the AP report of several grisly murders tied to
HME fraud and the arrest of several Bonanno family members
suspected of Medicare fraud in South Florida further tarnishes the
reputation of providers in the HME sector, stakeholders said.

“Painting the whole industry with this broad brush … is an
outrage,” Reinemer said.

Weil said the article signals an enormous challenge for the HME
sector.

“The Mafia thing is a huge, uphill battle,” she said. “When it
is a provider, people don’t know what a “provider” is. But they
really know what the Mafia is.

“It’s ugly,” she added. “And to come out when we are just
fighting tooth and nail, trying to hang on by our fingernails
… It continues to be a marketing and PR challenge for our
industry.”