Dead doctors’ Medicare IDs net millions

Scammers have found a lucrative source for squeezing money from Medicare: dead doctors.

Over seven years, the federal program for the elderly and disabled paid more than $76 million to purported medical equipment suppliers who used Medicare ID numbers of deceased physicians, says a report out today by congressional investigators.

Despite learning of the problem in 2001, the government failed to fix it, the report says. Investigators reviewed billing data submitted by equipment suppliers from 2000 to 2007 using the ID numbers of 1,500 deceased doctors.

The government payments went to firms that said they supplied such devices as wheelchairs and oxygen equipment, which require a doctor’s order or prescription. The ID numbers investigated were those of doctors who had died 12 months to 15 years before the suppliers’ claims were filed.

“Using the ID numbers of dead doctors, these scam artists have treated Medicare like an ATM machine,” says Sen. Norm Coleman, R-Minn., the top Republican on the Homeland Security and Governmental Affairs’ investigations subcommittee, which did the report and will hold a hearing today.

One doctor’s number was used 484 times from 2003 to 2006, even though the physician died in 1999, the report said, netting suppliers $544,789.

“While some of the claims were mistakes made by legitimate companies, others were solely devoted to fraudulent activity,” says LeRoy Coleman, press secretary for Sen. Coleman

The American Association for Homecare, which represents medical suppliers, has long urged the government to accredit suppliers, says spokesman Michael Reinemer. The government will begin doing so next fall. “Medicare has done a terrible job of keeping criminals out of the system,” he says.

The investigation comes amid increased attention to costs in Medicare, a $427 billion program whose hospital trust fund will be depleted in 11 years. A 2007 report by the Government Accountability Office said Medicare improperly paid about $700 million for medical equipment supplies from 2005 to 2006 because of mistakes, abuse or fraud – about 7.5 percent of total payments for such items.

Medicare tried to purge its doctor registry of dead physicians’ numbers after a 2001 government report exposed the problem, but the new report found 63 percent of claims were paid after April 1, 2002.

Herb Kuhn, deputy administrator for the Centers for Medicare and Medicaid Services, says the agency switched in May to a new doctor ID system. All doctors had to re-enroll, he says, which should eliminate deceased practitioners. His agency also asked the Social Security Administration for monthly updates of physician deaths. Based on those changes, the “vulnerability and abuse in (the) system will be much smaller,” Kuhn predicts.