A CNBC Investigations Inc. One-Hour Documentary Reported By CNBC Senior Correspondent Scott Cohn

ENGLEWOOD CLIFFS, N.J., March 27, 2012— As the Supreme Court considers President Obama’s Affordable Care Act and politicians and policymakers battle over ways to cut costs, they are confronting one of the most expensive aspects of the U.S. health care system: rampant fraud. It’s happening across the country. Doctors, pharmacists, home health care providers and sometimes even patients…hustling the system. Conservative estimates put health care fraud in the U.S. at $80 billion each year – some say the real number is closer to $160 billion. That’s U.S. taxpayer money going into the hands of criminals instead of care.

On Monday, April 9th at 9PM ET/PT, CNBC presents “Health Care Hustle,” a one-hour original documentary reported by award-winning Senior Correspondent Scott Cohn and the CNBC Investigations Inc. team. They spent five months on the front lines with a joint strike force taking down alleged health fraudsters and criminal rings accused of bilking Medicare and Medicaid out of millions. The strike force—one of nine across the country—is at the heart of a two-year federal crackdown on fraud, and “Health Care Hustle” examines whether it is working.

CNBC Investigations Inc. follows agents of the U.S. Health and Human Services Office of Inspector General (HHS-OIG) in New York working a case against a husband and wife team accused of running an $11 million scam out of a medical facility in Queens. A federal grand jury says some of what the facility bills to Medicare and Medicaid is not medical at all. The facility offers dance lessons, massages and door to door transportation all paid for by taxpayers. The government gets the bill for “physical therapy,” but authorities say it is more like pampering at a spa.

The American health care system in the 21st century is a dizzying array of numbers. Every diagnosis and every procedure has a billing code, which health care providers use to claim reimbursements from Medicare and Medicaid. Cohn examines how medical coding can be a minefield for some, but an opportunity for others. Entire businesses have sprung up to teach doctors how to use the coding system to their advantage, wringing more money from the system. One, run by a Florida doctor, offers a video series called “Medical Coding Cash Secrets.” But authorities want to know where patients fit into the Medicare-Medicaid numbers game.

Puerto Rico only has about 92,000 people eligible for Medicare, but what it lacks in size, it makes up for in opportunities to fraud. The scam of choice here: durable medical equipment like wheelchairs, IVs and prosthetic limbs. Cohn and the Investigations Inc. team head to San Juan as federal agents take down a group of individuals allegedly responsible for millions of dollars in false claims, from wheelchairs to hospital beds, according to prosecutors. The operation led to the arrest of 10 people accused in a scheme that led to $3 million in false Medicare claims. This was just one small victory, but operations like this are having an impact. Since the crackdown began in 2008, Medicare payments for durable medical equipment in Puerto Rico are down by more than a third.

With the Medicare Act of 2003, the prescription drug benefit has fulfilled an important health care need, but it’s also fulfilled an opportunity for fraud. When it comes to the new government health care benefit, investigators are still on a learning curve and the crooks are looking for loopholes. The CNBC investigation takes Cohn to the crossroads of America, Brazil, Indiana and nearby Terre Haute where a community pharmacist had billed more than $3.5 million in fake prescriptions to Medicaid – money that was supposed to help needy patients instead went to finance his lavish lifestyle that included multiple homes, cars, motorcycles and a $300,000 wedding for his daughter. Investigators only found him through a random spot check, interviewing a beneficiary. Other fake prescription scams have the taxpayers paying to support the habits of prescription drug addicts, while the pharmacist gets to bill the taxpayers and pocket the money.

Outhustling the health care hustlers is a never ending task and as the New York strike force gears up for the next raid, CNBC travels to Dallas, Texas, headquarters to another of the nine health care strike forces. The Feds call it the largest scam in Medicare history – they allege the largest home health care business in the state of Texas billed Medicare and Medicaid for nearly $375 million in bogus claims. But it is barely a drop in the bucket, leading some to argue it’s time to try something new. CNBC questions key decision makers in Washington about how the fight against fraud is impacting the national battle over health care reform.

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Scott Matthews is Vice President of Business News Specials. Jeff Pohlman is Senior Producer. Catherine Corrigan and Sabrina Korber are producers, Mike Tomaso is Associate Producer. Nikhil Deogun is Senior Vice President and Editor in Chief Business News, CNBC.

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