The NY Times reported in two articles here and here about the fraud by NY hospital Beth Israel Medical Center. Beth Israel Medical Center has admitted that it fraudulently increased fees for services to Medicare patients in order to receive millions of additional dollars from the federal government. The New York hospital agreed to pay more than $13 million in damages in a health care False Claims Act lawsuit that was filed and settled this week. The fine does not pay back all the money taken from the fraudulent scheme. The complaint says the fraudulent practice, known as "turbocharging," went on at Beth Israel from 1998 through 2003. The complaint says the hospital deceived the Medicare program into believing that the costs associated with inpatient medical care were higher than they actually were. Beth Israel is a component of Continuum Health Partners, Inc.
The plot involved 10 doctors, 9 separate clinics in New York City and 105 different corporations, all in service of a health care fraud ring that federal authorities say conspired to steal more than a quarter of a billion dollars. This one, like many others, was rooted in Brighton Beach, Brooklyn, the locus of the city’s Russian-speaking immigrant population Brighton Beach has one of the highest rates of health care fraud in the nation, according to federal statistics. In fact, an analysis of data from the Centers for Medicare and Medicaid Services, the federal agency that regulates those two programs, shows that more health care providers in the Brighton Beach ZIP code are currently barred from the programs for malfeasance than in almost any other ZIP code in the United States. (The top spot is in southern Florida, with its high proportion of older residents.)
Federal law-enforcement officials say they have seen groups of these polymaths of fraud migrate from stock schemes in the mid- to late 1990s to mortgage fraud during the last decade and health care fraud. While the outlines of the health care fraud scheme itself were relatively typical, its scope — a conspiracy to steal more than a quarter of a billion dollars over five years from private insurance companies — suggested a sprawling criminal organization. The ring sought reimbursement for so many excessive and unnecessary medical treatments that it had to set up three separate billing processing companies just to handle the paperwork, according to court papers.
The ring, according to the indictment, created and ran the nine clinics in the Bronx, Brooklyn and Queens, which provided unnecessary and excessive medical treatments, including physical therapy, acupuncture, pain management, psychological services, X-rays, M.R.I.’s and other services. Its members are charged with conspiring to steal $279 million.
In part because of statutes of limitation, the settlement covers only the period from Feb. 21, 2002, through Aug. 7, 2003, when the federal rules changed and turbocharging stopped. But the complaint quotes from internal memorandums and e-mails by hospital executives who embraced the strategy for increasing Medicare outlier payments recommended by a consultant, the National Revenue Group, years earlier. For example, in an e-mail exchange in 2000, Continuum’s vice president for patient financial services wrote that the hospital was going to try to “keep the charges high even at the lowest levels of service in the E.R.” The vice president for patient accounting agreed, “This is a good start. … Go for the gusto!”
Later, another executive wrote of “feeling a bit giddy” at the thought of “getting $10 million of outlier revenue,” while another advised caution because she had become wary that Beth Israel’s turbocharging would be detected.
Why haven’t more people been arrested?