Yesterday, I noted a recent Government Accountability Office (GAO) report finding that, even after a decade on GAO's list of programs at high risk for fraud, Medicaid had made $14.4 billion in improper payments during the 2013 fiscal year.
Not all of that is outright fraud, but some of it is. And it's not all piddly scam-work either—minor billing tricks or other small-time schemes. Some of the fraud is really spectacular.
For example: There's the recent case of Rehan Zuberi, who allegedly managed to defraud New Jersey's Medicaid program of about $8 million over a five year period, according to a report in yesterday's Star-Ledger.
Zuberi ran a network of diagnostic imaging centers, and allegedly paid other doctors a total of about $300,000 to send patients to his offices for scans that they didn't need. Zuberi charged Medicaid for the procedures, kept most of the money for himself, and tipped other doctors to keep referring additional patients in order to keep the scan-scam going. According to the state's Attorney General, Zuberi filed some 30,000 fraudulent claims to the program before he was caught.
During the time he is alleged to have been running the scam, Zuberi managed to live the high life: He resided in what the Star-Ledger describes as a 9,000-square foot mansion, and kept $100,000 in cash in his home. He used a $400,000 cashier's check to buy a brand new 2014 Lamborghini. The state AG's office also reportedly seized a Ferrari and a Rolls-Royce as part of the investigation this week.
You hear this sort of large-scale fraud story far too often in conjunction with the nation's two big governemnt-run health programs. In February, officials charged 20 people with operating multiple competing Medicaid fraud rings in the District of Columbia—including one woman who had been barred from participating in federal health programs, but went on to bill D.C. Medicaid for $75 million.
These sorts of stories aren't limited to Medicaid. Medicare, the federal health program for seniors, made $49.9 billion in improper payments last year, up more than 10 percent from the year before. In 2011, the Justice Department busted a mob ring that had made $163 billion worth of fraudulent bills. Authorities took custody of a cache of weapons, including a replica of a Klingon battle sword.
In 2011 congressional testimony, a Texas concert-promoter turned Medicare fraudster explained how he fraudulently billed the government for $10 million over three years. It's "incredibly easy to commit," he said. "The primary skill required to do it successfully is knowledge of basic data entry on a computer."
The is what health care fraud looks like: mansions and fancy cars, mob activity and weird weapons, and tens or hundreds of millions of taxpayer dollars spent funding fraudsters who find the program incredibly easy to scam.