The gang constructed a parallel universe that was entirely make-believe but which mirrored the structure of the real Medicare system. To begin with they stole the identities – including the dates of birth, social security numbers and medical licence details – of dozens of doctors.
They then set up 118 phantom health clinics in 25 states across the country, and applied for permission to treat patients under the terms of Medicare, a scheme to support over 65-year-olds and certain categories of disabled people.
Once accepted on to the programme, the fraudsters began billing for treatments such as ear, nose and throat procedures, skin allergies and bladder tests on behalf of 2,900 patients whose identities they had also stolen. The more than $35m that was already paid out by Medicare before the arrests were made went to bank accounts set up under false identities.
And there is also (as always!) a political point to be made here. Medicare is commonly held up in the US political screaming matches as an example of a terribly efficient system. The management expenses of the system are low (some 4% or so isn\’t it? As opposed to the 20% or so of the private insurers?) and thus everything is peachy.
But, as we can see, (and this isn\’t the only Medicare fraud, not by a long way) having low administrative expenses may well mean that your system is open to breaches in, umm, your administrative system.
Oh, and, of course, the cost of the FBI isn\’t appearing in the Medicare budget either, even though private insurers would have had to employ private investigators on their own budgets to uncover something similar in the private insurance system.
So Medicare\’s not got admin expenses which are all that low after all.