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Tighter controls, oversight will mitigate endemic fraud in South Florida

Medicare fraud has become self-perpetuating among Cuban-born immigrants, particularly scams involving nominee ownership

Last week a Sun-Sentinel investigation uncovered surprising statistics regarding the link between Cuban-born immigrants and the prevalence of healthcare fraud in South Florida. Seventy-three percent of federal healthcare fraud arrests in Miami-Dade County since 2000, and 72 percent of arrests in all of Florida, involved Cuban immigrants, according to the newspaper

Although those statistics are unexpectedly high, they aren't shocking, as healthcare fraud has been endemic throughout South Florida for many years, Robert Nicholson, a managing partner with Nicholson & Eastin LLP in Fort Lauderdale, Florida, said in an exclusive interview with FierceHealthPayer: AntiFraud. From 1994 to 2007, Nicholson served as an Assistant United States Attorney for the Southern District of Florida, prosecuting False Claims Act and healthcare fraud cases.

"Within the Cuban immigrant population in Miami, [healthcare fraud] was a popular criminal act and became self-perpetuating," he said. "If someone saw their friend was successful, they would do it, and then their friend would do it, and so on. Because it was a relatively easy crime to commit, and profits are so substantial, it perpetuated it."

Focusing on DME fraud, nominee owners

Nicholson says that durable medical equipment (DME) fraud has been endemic in South Florida due to historically relaxed controls.

"It was kind of the opposite of the saying, 'If ain't broke, don't fix it,'" he sid. "In this case it was, 'If it's broke, take advantage of it.'"

Initially, DME fraud schemes could operate simply by establishing a P.O. Box and submitting claims. Medicare eventually tightened restrictions and required a physical location and contractor inspections. Fraudsters responded by setting up a clinic, getting some equipment and waiting for approval. Once that happened, they would start submitting claims.

Nicholson added that, anecdotally, fraudulent DME claims have reduced significantly. This is likely due to a combination of tighter controls and increased prosecutions. But it hasn't solved the problem entirely. "It's become increasingly more difficult, but the people that were inclined to commit fraud were also inclined to overcome those additional obstacles."  

Tighter controls

Another popular fraud scheme in South Florida involves Cuban immigrants who are recruited to the U.S. as nominee owners of medical clinics in an effort to conceal the true owner's identity. Once an investigation occurs, those nominee owners become "sacrificial lambs" Nicholson said, often fleeing to Cuba to avoid prosecution.

"People will arrive in the United States and, within a short period of time, they own a DME company or medical clinic, which was essentially pre-established," he said.

Nicholson added that tighter controls for entry into the Medicare program and tighter control of payments are the best ways to cut down on pervasive fraud in the region. New Centers for Medicare & Medicaid Services rules to prevent bad actors from re-matriculating into the system should help--but persistent fraudsters will often find ways around those controls, just as they have in the past, and nominee ownership will continue to be a hot button issue in years to come.

"A lot of this comes down to filling out an application where you swear that these are all the owners--but if someone is willing to commit fraud, they are willing to lie on the enrollment application," Nicholson said. 

Related Articles:
Investigation reveals criminal pipeline to Cuba riddled with healthcare fraud
Justice Department joins whistleblower suits against high-billing Florida cardiologist
Florida cracks down on fraud tied to therapy clinics
CMS strengthens oversight of Medicare providers

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