Welcome to the Pondera FraudCast, a weekly blog where we post information on fraud trends, lessons learned from client engagements, and observations from our investigators in the field. We hope you’ll check back often to stay current with our efforts to combat fraud, waste, and abuse in large government programs.
Last week, the Department of Justice announced that they had made the largest “National Health Care Fraud Takedown” in history. In all, the DOJ brought charges against 412 people in 30 states responsible for $1.3 billion in false billings. Those charged included 115 doctors, nurses, and other licensed health care providers.
Many of those busted included operators of clinics that were alleged to be illegally distributing prescription opioids—a subject that we address all too often in this blog. One Houston clinic simply sold the opioids to a room packed full of addicts and drug dealers. Another clinic in Palm Beach, FL recruited addicts by offering them drugs and visits to strip clubs. There were even cases of single doctors prescribing more medications than entire hospitals.
In their press release, the DOJ points out that 59,000 Americans died last year from opioid related drug overdoses. Many of these were from prescription opioids. This is clearly a growing problem in our country and we applaud the DOJ, HHS, and law enforcement for their efforts in this takedown. This, and similar busts, should send a strong message to the bad actors in America’s health care system.
It is important to note, however, that we still have a lot of work ahead of us. As large as these takedown numbers are, one must consider that they still represent only a small percentage of the problem. The government’s own Paymentaccuracy.gov website assigns $96 billion per year in overpayments for Medicare Fee-for-Service, Medicaid, Medicare Advantage (Part C), and the Medicare Prescription Drug Benefit (Part D). So even if all of the $1.3 billion from this bust was falsely billed in one year (which it wasn’t), it would still represent only 1.35% of the total estimated problem.
I, for one, am hoping that this is simply one of many steps in the right direction.
After one of the nuttier fraud busts in recent memory, the FBI is searching for former Kentucky attorney Eric Conn, who recently pled guilty to committing over $600 million in Disability Insurance fraud. For 10 years, Conn perpetrated his scheme by bribing a doctor and several judges to approve his clients’ disability claims. In all, he represented 1,700 of these claimants.
After pleading guilty and securing his $1.25 million bail with the equity in his home, the appropriately named Conn simply cut off his GPS monitoring bracelet and skipped town. He unfortunately had to leave behind his mobile home law office including his replicas of the statue of Liberty and the Lincoln Memorial he kept out front.
In his time as an attorney, he hired B-list celebrities for television commercials and described himself as “Superman without a cape” ... and without a conscience apparently. He even performed rap songs in English and Spanish, claiming that he learned Spanish off a tape.
Two aspects of this case really bother me, outside of the crime itself of course. One is that Conn could commit such brazen fraud over a period of 10 years without being prosecuted. The other is that his bail was set low enough that he was easily able to take off.
Both of these facts illustrate the struggles that many of our clients face when dealing with fraud. Until we, as a country, decide to provide more funds to quickly detect fraud and decide to impose more serious penalties to those who commit fraud, we’ll continue to read about these cases. For now, I can only hope that the FBI catches up with Conn before he is able to do more damage.