Each year, billions of dollars is lost due to Medicare Fraud. There are many types of Medicare Fraud, however setting up Shell Companies and billing for services that are never preformed is one of the most common, especially in Florida.

A shell company is a fake company, typically setup in someone’s name who is not related to the fraudster or using falsified information, often everything about the company is fake, including addresses, although identity theft is another big threat. For cases of Medicare fraud in Florida, the majority involve shell companies.

After the company is setup, they begin to bill Medicare for services and procedures that are not preformed, using valid Medicare account information. Sometimes the company will pay kickbacks to patients and assisted care facilities, or others who have access to Medicare Recipients, although this information is also often stolen.

Most of the time, these individuals do not only setup a single company either, but instead create a group of companies that makes tracking and finding them all more difficult. For example, in the case of Jesus Huarte, who was recently sentenced to over twenty years in prison, his Medicare Fraud Ring extended up and down the east coast, with around thirty shell companies.

A big part of the issue is that Medicare will typically provide reimbursement to claims and follow up on them later. This is sometimes called a bill-and-chase situation, where they chase down the payment later, providing a very lucrative way for scammers to make money.

New legislation is being currently presented to make it a little more difficult for those who wish to preform this type of no-service Medicare scam and starting in 2012, states such as Florida where Medicare Fraud is so common will preform additional audits on those making claims. This also includes 10 other states, where Medicare Fraud is most common.

Mansour Sanjar and Cyrus Sajadi, the owners of a mental health clinic in Houston, as well as Chandra Nunn, who is the owner of an assisted living facility, were arrested last week in Houston on charges that they were responsible for more than $90 million in Medicare Fraud.

Sanjar and Sajadi, who are 78 and 64 respectively, are both physicians and own Spectrum Care, which is a clinic that specializes in partial hospitalization treatment. According to authorities, they have been billing Medicare for services that were not medically necessary and, in some instances, not preformed. Investigators contend that in some instances, Medicare was billed for mental health treatments that included group activities, like bingo.

Chandra Nunn, who is a 33 year old woman who, public records state, owns Love and Caring Homes Inc, which is an assisted living facility. Nunn is accused of using her position as owner and operator of the nursing home to send patients to Spectrum Care’s clinic for unneeded services that were billed to Medicare. Federal investigators state that she was paid $10,000 from Sanjar last year, as part of a payment to send patients to Spectrum Care.

Along with billing Medicare over $90 million in fraudulent claims, authorities believe all three individuals also bribed Medicare Recipients, sometimes providing cash or even cigarettes to get them to attend Spectrum Care. They may face additional charges as well.

An additional $20 million was paid to private medical ambulances that transported patients to Spectrum Care, which is typically only covered by Medicare when the trip is required as a medical emergency. Investigators have stated they are looking into this as well.

This is not the first time Sajadi has fallen afoul of the law, he was accused of having issues with properly keeping and maintaining patients records twice over the past 5 years by the Texas Medical Board and the state Government.

On the same day as the arrest, Wednesday, Syracuse University distributed a report that states that, according to data from the Department of Justice, Houston Texas is the second most common location in the United States for Medicare Fraud. Recently, a doctor in Houston was sentenced to 70 months in prison for his role in Medicare Fraud.

Richard West, a Vietnam Veteran who receives Medicaid Benefits, testified at a House Oversight Committee last week, explaining his experience with Maxim Healthcare Services over 7 years ago.

Richard West requires a ventilator and oxygen to breath and uses a wheelchair to get around, requiring in home heathcare. There was no way he could afford this without Medicaid, unfortunately, and so back in 2004, when his Medicaid was cut-off for exceeding his benefit limit, his health was literally put at risk.

After a little research, West discovered that his in-home healthcare provider, Maxim Healthcare Services, had fraudulently billed Medicaid for over 700 hours of in-home nursing care, which netted the company more than $20,000.

Armed with this knowledge, he notified Medicaid, who did not care. Nor did his social worker. Left with no other options and desperately needing health care that he could not afford, West contacted an attorney who filed a Whistleblower Lawsuit, which is allowed as part of the False Claims Act.

Of course, he did not see immediate results, but it did force the government to take action against Maxim Healthcare, where they had simply ignored him before.

Recently, over 7 years later, Maxim Healthcare agreed to a $150 Million Settlement, which was the result of West’s case. However, the company is still in business and used a Deferred Prosecution Agreement to escape any real charges. However, a number of people who used to be involved with the company have been found guilty of fraud, including former executives.

Even though it is business as usual for Maxim Healthcare Services, after paying a relatively small fine and reaching an agreement with the federal government to avoid being charged with a crime, West will receive almost $15 million of the settlement. So, at least West should not have to rely on a system that only was willing to help this retired veteran receive the health benefits he was entitled to after a lawsuit made the Medicaid Fraud Public.

A doctor and two nurses who were involved with the Miami ABC Medicare Fraud scam plead guilty to their roles in a scam that resulted in over $25 million in fraudulent Medicare claims. Each of the defendants plead guilty to one count of conspiracy to commit health care fraud.

The nurses, Luisa Morciego and Eneida Fry, were both sentenced to 2 years in federal prison, in addition to having to pay a fine of around $300,000 and $400,000 in fines respectively. In addition, they will also serve 3 years of probation after their release. The doctor, Jose Nunez, who is 63 years old, was sentenced to 3 years and 3 months in prison, as well as a fine of over $1 million.

According to the plea agreement signed by Nunez, who owned and operated two Miami based medical offices, he provided patients to Florida Home Health Care Providers and ABC Home Health Inc, as well as providing Certificates of Medical Necessity, prescriptions, and other documents required by Medicare to accompany certain types of claims. In most cases, these services were allegedly not needed and often not even preformed. ABC Home Health and Florida Home Health Care provided a number of therapy services, providing kickbacks to doctors and other medical professionals who referred patients to their services.

The fraud perpetuated by Fry, Morciego, and Nunez allegedly took place for 3 years between 2006 and 2009, with over 40 patients being referred to ABC Medical and Florida Home Health Care. The prescriptions and certificates of medical necessity provided by Nunez was responsible for around $1.5 Million.

The nurses, Luisa Morciego and Eneida Fry, were employed by ABC Home medical and allegedly were responsible for falsifying records in order to bill Medicare for services that were either not needed or, in some cases, not preformed. Fry also, according to court records, helped recruit doctors of local home medical clinics to refer patients, who then received kickbacks for their parts in the Medicare Fraud.