By Lindsay Toler
By Chad Garrison
By Brett Koshkin
By RFT Staff
By Lindsay Toler
By Riverfront Times
By Danny Wicentowski
By Pete Kotz
It pans the surrounding strip mall, parking lots filled with license plates from Kentucky, Tennessee and even Florida. That's how far people were willing to drive for a Las Vegas Cocktail.
The cocktail mixes Xanax, Soma and Vicodin for a powerful opiate high. Monroe was its unofficial retailer. It was led by Oscar Linares, a doctor from the Dominican Republic who also worked at the University of Toledo Medical Center. Sometime in 2008, he started leading a double life.
The office went from seeing 40 patients a day to as many as 250. Over two years, Linares prescribed 5 million doses of narcotics. Traffic grew so heavy that he hired a parking-lot attendant. Workers got bonuses when the patient count topped 200 in a day.
The cost to Medicare: $5.7 million.
Linares rarely examined his patients. One undercover cop didn't see the doctor until his tenth visit, and only then via a television monitor. Linares' workers simply gathered patients' information and had them sign blank forms that would be filled in later. Then a guy who used to work at Lowe's would hand out the scrips.
Linares was charged with unlawful distribution of prescription drugs and Medicare fraud. He has pleaded not guilty and is awaiting trial.
Perhaps owing to his nationwide reputation, the doctor's scam was short-lived. But a more durable fraud thrives a half-hour north, in Detroit's Cass Corridor. Amid this stretch of poverty and ruin emblematic of the city's decay lies a peculiar oasis agents call "The Beach."
It's situated near several shelters, which provide a steady flow of beneficiaries. Recruiters drink beer and sit on beach chairs — hence the name — wrangling people into vans that shuttle "patients" to doctors, home-health agencies and mental-health clinics.
The doctors are the stars of this operation. They not only bill Medicare and Medicaid but use the power of prescriptions as currency to pay accomplices. It's a multi-ring circus with the doctor at its center, kickbacks flowing in all directions to pharmacies, patients and recruiters.
"A recruiter will identify a physician and work out a deal, saying, 'I'll bring you so many patients,' and the recruiter will pay a physician $10,000 to $15,000 to write scrips like crazy, pad after pad for a week," says one Detroit HEAT agent.
"When you have a dirty doctor writing 500 scrips for Oxycontin a month, you have to have a pharmacy that is going to fill them. If a pharmacy sees a Dr. ABC's scrip 500 times a month, they will call and ask, 'What's up, doc?' The recruiter plays a role here, too, and says, 'I'm taking care of the pharmacy.'"
The scheme's even spawned sub-specialties, such as "quality assurance" experts. They're typically former doctors from overseas who read through patient charts to flag anything that might prevent Medicare from paying.
And since fraudsters realize that red flags rise when there's a billing spike from one company, they'll incorporate seven or eight to spread the grift. Some even launch check-cashing businesses to launder their money.
"Now we're seeing people who aren't doctors open these clinics and hire other dirty real doctors to 'work' in the clinic," says the Detroit agent. "Almost every day there's a new thing."
The Bureaucracy That Didn't Work (Until Just Recently)
Much of the ease with which the treasury is raided can be blamed on CMS, which bleeds like a hemophiliac, thanks to a strategy known as pay-and-chase. Since its inception, Medicare has operated with a "pay claims, ask questions later" ethos.
This might have been appropriate in the idealistic '60s, when the program was formed and doctors served as its virtuous gatekeepers. Fraud was such a secondary concern that it wasn't even officially made a crime until 1996.
But that carcass is so inviting today that prosecutors have adopted an unofficial threshold: People need to steal at least $500,000 before they're charged.
"All of these prosecutions are great," says Louis Saccoccio, CEO of the National Health Care Anti-Fraud Association. "We have strike forces, but the prosecutions just tell you we have a big problem because that means the money's already out the door. So the focus now is starting to shift to prevention."
Enforcement started to pick up during the second term of George W. Bush then accelerated under Obama, who expanded the task forces and made fraud-fighting a pillar of the Affordable Care Act, otherwise known as Obamacare. CMS was given greater discretion in suspending payments and screening providers before they entered the system. Penalties and prison time were also increased.
But excuse Congressman Michael Burgess' skepticism. The Tea Party Republican from Texas has heard such talk before.
The former gynecologist is willing to concede that progress has been made. Yet the sheer size of the task makes crime fighting difficult. Every day, Medicare contractors process 4.5 million claims. Even Republicans admit that CMS is undermanned and forced to rely on contractors, whose ferreting of fraud is inconsistent at best.
"There was a famous case here in Dallas where a Nigerian woman had been busted," Burgess says. "As she was going off to jail, it was discovered that she had several other provider numbers. They discovered that she was receiving checks at the same post office box. It never occurred to anyone that, 'Hey, anything that goes to P.O. Box 9058, that's a red flag.' We were probably paying for her defense."