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Pandemic leaves seniors, taxpayers vulnerable to age-old medical equipment fraud scheme

$15 million in fraudulent claims in FL
medical equipment.PNG
Posted at 7:01 PM, Feb 16, 2021
and last updated 2021-02-17 08:43:44-05

TALLAHASSEE, Fla. (WTXL) — Federal agents call it a pandemic loophole netting millions of dollars in fraudulent medical claims. Investigative Reporter Katie LaGrone reveals how it works and why victims never knew they were being exploited until we were all paying for it.

Anna Adams recently showed us a pricey box of medical equipment loot she never ordered but was shipped last year.

“I kept telling these people that kept calling me that I did not need braces, I did not need a back brace, a knee brace or anything at all,” Adams said.

The box of medical braces prompted her to call her local senior connection office.

“I’m reporting that it’s fraud. I did not order them and my doctor did not order them," she said.

At 90-years old, Adams is one of the millions of American seniors who, every year, are shipped durable medical equipment (DME) including orthopedic braces they don’t need or want. The braces are used by thieves who cash in on hundreds of millions of dollars in fraudulent Medicare claims.

But since the pandemic, we’ve learned this years-old brace scam has loosened up becoming more brazen and taking a page out of an old playbook, according to federal agent Ryan Lynch who leads a Medicare Fraud Strike Force team on Florida’s west coast.

“There’s no storefront, no product, the patient never heard of the DME company and the patient never received anything,” Lynch said.

Instead, these so-called “100% fraud cases” rely on fictitious businesses, ghost employees and gutsy scammers who use legitimate medicare recipient numbers to make bogus claims to Medicare.

Here’s how it works.

In March, the federal government declared a state of emergency due to the COVID-19 pandemic. As a result, the Centers for Medicare and Medicaid Services temporarily suspended mandatory on-site visits to newly established durable medical equipment companies.

Lynch said that became the welcome mat for the age-old scheme.

“What they did was open up their DME companies, get certified, no site visits because of the pandemic and then immediately bill huge amounts, in the millions, in just 4-6 weeks,” Lynch said.

To date, the feds have identified at least a handful of fictitious medical equipment companies that opened and shut within two months in Florida, specifically the Fort Myers area. Lynch believes the total cost to taxpayers is as high as $15 million.

Lynch said at least two of the companies even applied for PPP loans but shut down before any additional taxpayer-funded cash could be sent. By then, the thieves already made out like bandits.

“In a span of time in 6-8 weeks, they’re billing Medicare and they’re making upwards of $3 million in two months. That’s how fast,” said Lynch.

In August, the feds ended that temporary halt to on-site visits, which means any new medical equipment company is once again visited by the feds to lower the chance of fraud.

But DME fraud continues to be a billion-dollar industry. Seniors like Anna Adams are proof of it while the rest of us pay for it.

“Everyone should care about this because it costs hundreds of millions of dollars,” said Lynch.

Don’t be a victim to healthcare fraud, here are some helpful tips:

  • Never give out personal medical information or you Medicare/Medicaid number to anyone you don’t know
  • Check you medicare/benefits statements to see if there are any claims you are not familiar with
  • Report any suspicious claims
  • If you receive unwanted medical equipment, hold on to the braces as evidence and report it to authorities

Report fraud by contacting:

Johns Hopkins Center for Systems Science and Engineering