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.