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Medicare fraud flourishes in South Florida

MIAMI — Three days a week Philip Audette sat in a cushy white chair at the St. Jude Rehab Center, a needle pumping HIV drugs into his arm. He talked and laughed with a dozen other patients, all in good health, all receiving drugs they didn't need. All for the money.

Audette says he made $100 to $200 every visit, nearly $10,000 over several months, selling his Medicare number to the clinic's three owners, the Benitez brothers, who were later indicted on charges of bilking Medicare of $119-million.

Authorities say there are thousands in South Florida like Audette, and federal officials say they play a large role in the fraud overwhelming the national Medicare system. While authorities are successfully cracking down on clinic owners, they disagree over whether prosecutors should go after the patients who get the phony treatments in addition to the clinics that provide them.

"Unless patients are prosecuted, we will not have a true long-term impact," says Kirk Ogrosky, deputy chief of the U.S. Justice Department's criminal fraud section and an advocate for arresting patients, something that rarely happens in Miami and Los Angeles, the two cities where federal health care fraud task forces are based.

"It was very easy — the worst part was getting the needle," said Audette, 48, who says he is HIV-positive. Audette, who was not prosecuted, testified in court against a clinic operator and agreed to describe the scam to the Associated Press.

For years, federal officials have campaigned aggressively against clinic operators like the Benitez brothers.

But the unspoken thousands who keep these mills churning — the patients — remain free to move from clinic to clinic, scam to scam, from durable medical equipment and HIV infusion therapy to home health care. Another year, another disease. One patient was responsible for claims of $1.1-million for HIV infusion drugs and other services. Within a few years, that patient had claims filed for $1.4-million for medical equipment, records show.

"To look at health care fraud and not look at the fact that the beneficiaries are somehow involved is to be blind to the problem," said Peggy Sposato, a former emergency room nurse who recently joined the Justice Department as an investigator after working for the Miami U.S. Attorney's Office. "We've got people out there who brag about the fact that they are making large amounts of money abusing Medicare."

But Miami U.S. Attorney R. Alexander Acosta believes it's better to spend his prosecutors' limited time and resources going after the providers — juries are often sympathetic to elderly and terminally ill defendants, even if they are guilty.

Connie Woodhead, the health care fraud coordinator in the Los Angeles office, agrees.

"It sounds great and I like the idea of getting the deterrent aspect," Woodhead said, but "you're not going to prosecute thousands of beneficiaries, so you're going to be making a sacrificial lamb in front of a jury of some poor person?"

The patients, mostly Cuban-Americans, are recruited by brokers who go door-to-door, offering hundreds of dollars for use of their Medicare numbers, a tactic the Miami Herald first reported. They often target new citizens and immigrants, sometimes entire families. Many barely speak English.

At some apartment buildings, brokers compete for patients, promising to pay them more in kickbacks than another company is giving them, Ogrosky said.

Former professional patient Audette says a friend asked him if he wanted to make some quick money and introduced him to a broker named Oscar about five years ago. After Oscar took Audette and his partner to get blood tests confirming they were HIV positive, they met him three days a week in downtown Fort Lauderdale and were bused with about 18 other patients to the Miami clinic.

The Benitez brothers, who owned St. Jude and 10 other clinics, bought hotels, helicopters, boats, even a waterpark with their spoils and allegedly fled to Cuba, where authorities believe they remain. A doctor found guilty in the scam was sentenced to 30 years in prison last week, one of the stiffest penalties ever imposed for Medicare fraud. A physician's assistant received 14 years.

The Justice Department says Miami could significantly alarm bogus patients just by arresting one a month.

Until then, patients like 81-year-old Ana Luisa Palacio will fuel the fraud. Palacio made $125 every three months for about eight years. As part of a federal case against a clinic owner in Miami, she testified in February that she was in good health and had no respiratory illness, though she accepted several related medications, including oxygen, which she never used and threw away. Several neighbors went with her.

Asked why she went to the doctor if she wasn't sick, Palacio said, "I went there because of the money problem ... well, I received money."

Medicare fraud by the numbers

$2.5B The sum Medicare spent on AIDS treatment in Florida, mostly in Miami.

$978M The sum spent for the other 49 states combined

8% The percentage of the nation's HIV/AIDS patients who live in Florida.

72% The percentage of Medicare spending on the disease that Florida is responsible for.

Medicare fraud flourishes in South Florida 12/24/08 [Last modified: Friday, December 26, 2008 8:59pm]

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