When asked in 1951 why he robbed banks, prolific thief Willie Sutton is said to have replied matter-of-factly, "Because that's where the money is." That's the same philosophy behind Medicare and Medicaid fraud.
The federal budget for the health care entitlements is more than $900 billion this year. There's nothing like that kind of money to bring out the fraudsters. And sweeping anti-fraud provisions in the Affordable Care Act can only do so much to slow them down.
Even before the law was passed in 2010, the Obama administration began cracking down on health care fraud with a series of strike forces set up across the country.
Since the federal crackdown began in 2009, authorities have charged more than 2,500 defendants, recovering $1.9 billion in fraudulent payments last year alone, according to a joint report by the U.S. Justice and Health and Human Services departments.
While $1.9 billion may sound impressive, the Office of Management and Budget estimates Medicare and Medicaid related programs made nearly $89 billion in improper payments last year, largely due to fraud.
Among the early takedowns in the enhanced effort under Obamacare were Irina Shelikhova and her crew at Bay Medical in Brooklyn, New York, a scam operation that recruited patients among her fellow Russian immigrants in exchange for kickbacks.
The patient would walk into the clinic reporting some imaginary ailment, but rather than having to pay the clinic, say, $35 to see the doctor, the clinic would pay the patient $35—a kickback for the ability to bill Medicare under his or her name. It was a small price to pay for Bay Medical, which billed the taxpayers for some $50 million in nonexistent medical procedures between 2005 and 2010. Shelikhova is serving a 15-year prison sentence for money laundering.
The Affordable Care Act includes much tougher sentences for health care fraud, and enhanced screening for doctors and other providers who bill the government programs. It authorizes new technology to help investigators detect fraud, and $350 million in new funding for anti-fraud efforts over the next ten years. Officials say every dollar spent on enforcement yields $6 returned to the taxpayers.
Yet the crime wave continues across the country.
Here are some of the more brazen scams broken up in the past couple of years, according to that DOJ and HHS report.