[HN Gopher] 200 people charged in $2.7B health care fraud crackdown
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200 people charged in $2.7B health care fraud crackdown
Author : apsec112
Score : 155 points
Date : 2024-06-27 21:09 UTC (1 hours ago)
(HTM) web link (apnews.com)
(TXT) w3m dump (apnews.com)
| cs702 wrote:
| $2.7B in made-up claims, divided by 200 accused individuals,
| gives us an average of $13.5M per alleged criminal.
|
| That's not peanuts!
| kurthr wrote:
| "In the Arizona case, prosecutors have accused two owners of
| wound care companies of accepting more than $330 million in
| kickbacks as part of a scheme to fraudulently bill Medicare for
| amniotic wound grafts, which are dressings to help heal
| wounds."
|
| Total fraud in that case was $900 million, for a only 500
| patients, or almost $2M per patient.
| Spooky23 wrote:
| Wound care is bullshit when it's not fraud. My dad was
| getting billed $12,000 weekly for treatment of bedsores due
| to neglect when he was inpatient. The procedure took under 15
| minutes.
|
| Compromised patient, injured due to basic incompetence, A
| Medicare probably paid a million dollars or more to treat it.
| proee wrote:
| That is insane. Did his insurance cover this? What happens
| if you refuse to pay such outlandish fees? I'm sorry he had
| to deal with this.
| llamaimperative wrote:
| GP says Medicare paid for it, so the US taxpayer.
| Aurornis wrote:
| > Did his insurance cover this? What happens if you
| refuse to pay such outlandish fees?
|
| The billed numbers are almost completely made up. The
| insurance company (Medicare in this case) will only
| reimburse up to a set amount.
|
| The reimbursement is calculated as min(billed_amount,
| allowed_amount). If the facility accidentally bills less
| than the allowed_amount, they get less than they could
| have. So to make sure they get 100% of the possible
| payout, they bill extremely high numbers to insurance.
|
| It's a dumb system, but it's something you have to keep
| in mind whenever someone talks about how much things cost
| in the US system. With expensive procedures, products, or
| drugs, virtually nobody ever pays the big number. It's
| just a placeholder to make sure insurance payouts are not
| left on the table.
| bliteben wrote:
| I don't understand how it isn't fraud. I looked at an
| ambulance bill for my mom the other day:
|
| $1798 total
|
| -$388 Medicare paid
|
| -$1324 Service adjustment
|
| $86 Amount you owe.
|
| I don't think dumb is sufficient to explain this. It's
| pretty easy for me to see how someone leaps from this de
| facto legal system to outright fraud, because the line
| between them is pretty thin.
| Spooky23 wrote:
| That was from the Medicare statement. I think the wound
| care courts as a surgery.
| guynamedloren wrote:
| > Total fraud in that case was $900 million, for a only 500
| patients, or almost $2M per patient.
|
| That seems so outside the bounds of reality that I'm
| questioning if it's what happened here. I can't imagine how
| that would pass any kind of sniff test by Medicare.
|
| Quote from the article: "In less than two years, more than
| $900 million in bogus claims were submitted to Medicare for
| grafts that were used on fewer than 500 patients, prosecutors
| said."
|
| The alternative interpretation of this is that the grafts
| were _applied_ to 500 patients, but potentially many many
| more were billed for grafts that they didn't need (and didn't
| receive). Maybe more feasible?
| onlyrealcuzzo wrote:
| No - but $2.7B in fraud over $4.5T total healthcare spending
| per year is peanuts.
|
| This appears to happen over ~5 years or more - so that's $2.7B
| vs $22.5T or about 0.012% of total spending.
|
| The reason healthcare is broken in the US is not because of
| fraud.
|
| It's due to the design.
|
| By the way, fraud is inevitable.
|
| We _might_ be able to save about ~1% per year on healthcare if
| fraud was reduced to more reasonable levels. That 's not going
| to move the needle at all.
| vkou wrote:
| The design of the system makes normal billing practice
| indistinguishable from fraud. I will go as far as to say that
| charging $200 for a Tylenol, bundled with a million other
| different line items in a treatment _is_ fraud.
| Aloisius wrote:
| It's not like this is the only fraud we've found in years.
| It's not even the first billion dollar fraud incident case
| this year.
|
| The FBI estimates fraud accounts for upwards of 10% of
| healthcare expenditures.
| sidewndr46 wrote:
| if they were smart they paid taxes on the fraudulent gains. So
| they netted US $5 million or more each
| autoexec wrote:
| This is the sort of action we need more of to help combat
| corruption and restore some basic faith in the medical industry,
| but it's only a start. The convictions that follow have to come
| with severe enough consequences to more than offset the the
| millions they got while hurting patients and stealing from
| taxpayers. If the people involved get away with a slap on the
| wrist or fines that are only a fraction of what they made in
| profit it will only encourage others to do the same thing. Any
| doctors accepting kickbacks should, at the very least, lose their
| license and be prevented from practicing medicine again.
| marcod wrote:
| The other good news of the day was that the Sackler family lost
| much of their future prosecution immunity
|
| https://news.ycombinator.com/item?id=40813369
| rdtsc wrote:
| I suspect this is just a the tip of the iceberg. These clowns
| are just the dumb ones who got caught. I mean they bought books
| on "how to disappear" and "how to avoid criminal prosecution".
| I guess the smart ones get away with it regularly. It's sad
| really.
|
| > The convictions that follow have to come with severe enough
| consequences to more than offset the the millions they got
| while hurting patients and stealing from taxpayers.
|
| I wish they land in prison for many years and then have to pay
| back what they stole and for all the court fees as well.
| dheera wrote:
| Related: https://hospitalogy.com/articles/2024-06-18/done-adhd-
| telehe...
| bozhark wrote:
| Jail for the execs.
|
| Loss of license for the nurses and doctors.
|
| People died but the money matters more?
| RecycledEle wrote:
| If people died that would not have died, is this murder?
| rdtsc wrote:
| > Authorities allege Gehrke and King, who got married this year,
| knew charges were coming and had been preparing to flee. At their
| home, authorities found a book titled "How To Disappear: Erase
| Your Digital Footprint, Leave False Trails, and Vanish Without a
| Trace," according to court papers. In one of their bags packed
| for their flight, there was a book titled "Criminal Law Handbook:
| Know Your Rights, Survive The System,"
|
| I guess "step 15" from the book was "marry your criminal
| associates, so you're not forced to testify against each other":
| https://en.wikipedia.org/wiki/Spousal_privilege?
|
| Step 1 should be "don't buy any incriminating books related to
| your planned disappearance" followed by the next chapter, "step
| 2: too late, already".
| marcod wrote:
| Would you expect that kind of book to make any difference for
| final sentencing?
| rdtsc wrote:
| I can see it making a difference when presented to jury, if
| it's admitted as evidence. It may not be main evidence but
| combined altogether with other things they did, it might tilt
| the balance into the "sentence them closer the maximum term
| limit" vs the "lower end".
| armada651 wrote:
| No, but it will make a difference in determining whether
| they're a flight risk by the judge. Given the evidence these
| two will probably await trail in jail rather than at home. Or
| at the very least they just bought themselves a nice new
| ankle bracelet.
| sandworm101 wrote:
| The books evidence a desire to flee but equally evidence an
| ineptitude, the lack of an ability to flee. Buying a ticket
| for an international flight is akin to making an
| appointment with the FBI for you to be arrested. The FBI
| only dreams that every fugitive first pass through
| inspection/x-ray before being arrested in an airport
| terminal ringed with security. No need to worry about a
| fight, weapons or a dangerous police chase. The perps have
| already been frisked by the FAA. If these people ever run,
| they won't get far.
| mulmen wrote:
| [delayed]
| cs702 wrote:
| _> The owners of the wound care companies, Alexandra Gehrke and
| Jeffrey King, were arrested this month at the Phoenix airport
| as they were boarding a flight to London_
|
| The whole sequence of events reads like something straight out
| of a Vince Gilligan show, like _Breaking Bad_ or _Better Call
| Saul_.[a]
|
| The only significant difference is that Gilligan's shows take
| place in New Mexico instead of Arizona.
|
| --
|
| [a] https://en.wikipedia.org/wiki/Vince_Gilligan
| snibsnib wrote:
| I have read 'How to disappear', i don't think it would be very
| useful here. It's written by two private detectives to help
| people evade stalkers or family violence. It specifically
| recommends against breaking the law. In any case it would be a
| bit out of date by now.
| pyuser583 wrote:
| So if you're ever arrested for anything, that fact can be
| used to argue against bail. For the rest of your life.
| pridkett wrote:
| Spousal privilege may not apply when both members of the couple
| are accused of committing the crime.
| defen wrote:
| I can't help but think of this classic Arrested Development
| scene https://www.youtube.com/watch?v=idqG3thKtpU
| metadat wrote:
| That's too perfect.
| strangattractor wrote:
| Guess SBF marrying Changpeng Zhao wouldn't have helped any;)
| mahogany wrote:
| "They can't arrest a husband and wife for the same crime!"
| AceJohnny2 wrote:
| This is bleak, but it reminds me how police found, in the home
| of convicted murderer and former Linux FS contributor Hans
| Reiser, a book about how to get away with murder.
| treeFall wrote:
| Here's the scammer's wedding registry from earlier this year.
| They look happy https://www.theknot.com/us/jeff-king-and-lexie-
| gehrke-feb-20...
| voganmother42 wrote:
| the schedule not being chronological is baffling to me, is that
| a common thing?
| data_ders wrote:
| agreed! more baffling than their fraud!
| data_ders wrote:
| lol when you click "our story" [1] it says:
|
| > Our Story coming soon!
|
| also under "Travel":
|
| > Travel coming soon!
|
| haha no kidding!
|
| [1]: https://www.theknot.com/us/jeff-king-and-lexie-gehrke-
| feb-20...
| marcod wrote:
| Dolce&Gabbana Casa Leopard Silk & Wool Throw $3,245.00 -
| Purchased
| montag wrote:
| Louis Vuitton Medallion Blanket $1510.00 - Purchased
|
| Really can't make this stuff up
| janalsncm wrote:
| Maybe I'm cheap but $335 for an extra small pet leash seems a
| bit steep.
| squigz wrote:
| You're probably just not disgustingly rich.
| cs702 wrote:
| Don't forget about the six beach towels for $4650:
|
| https://www.theknot.com/us/jeff-king-and-lexie-gehrke-
| feb-20...
| lxm wrote:
| Baccarat Lucky Butterfly $250.00 Purchased
|
| Maybe not as lucky as advertised?
| b3lvedere wrote:
| Wedding Party coming soon!
|
| I bet $15 on 'nope'
| SCUSKU wrote:
| Checks out that they were in Phoenix/Scottsdale... When I
| visited last year it felt very much like LA 2.0. Lots of
| plastic surgery, people flaunting wealth, and generally
| materialistic and shallow culture. Not representative of the
| entire area of course, but I was surprised by how much of that
| there was.
| com2kid wrote:
| Agree on all accounts, but I'd also like to add: Surprisingly
| good Italian food. Not the standard "high class" American
| stuff slathered in cheese either. Just really good wholesome
| delicious high quality dishes I as not expecting that from
| Scottsdale.
|
| But yeah, otherwise kind of an odd place.
| hdivider wrote:
| I wonder: would this level of fraud occur if the US had universal
| healthcare, or its effective equivalent?
|
| Asking out of genuine intellectual curiosity, not with political
| or other overtones (even with the highly political character of
| the news today).
| davidw wrote:
| The biggest scam in US health care is the insurance industry.
|
| Most of the 'fraud' that doctors complained about where I lived
| in Italy was old people coming in with mostly imagined
| complaints because they're lonely and don't have anyone and a
| doctor visit is free. Which is kind of sad, but... not the same
| level of problematic.
| Aurornis wrote:
| > Most of the 'fraud' that doctors complained about where I
| lived in Italy was old people coming in with mostly imagined
| complaints because they're lonely and don't have anyone and a
| doctor visit is free. Which is kind of sad, but... not the
| same level of problematic.
|
| I don't think that's a relevant analogy at all. In this case,
| the _doctors_ were the ones perpetuating the fraud. Not the
| patients, not the insurance company.
| LeonB wrote:
| There would still be some fraud, but since the prices of basic
| medical care would be considerably lower (as demonstrated
| everywhere else in the world) the amount of money made from
| fraud would be considerably smaller thus creating less
| incentives.
| glzone1 wrote:
| This level of fraud is almost non-existent when there is NO
| insurance and NO universal healthcare.
|
| Anytime the person paying is not the one receiving service, the
| appeal of fraud goes up. When the person paying is not paying
| with their own money the appeal goes up and a TON of incentives
| argue against finding fraud. At least in govt, there is
| sometimes a willful blind eye because finding fraud causes a
| huge headache and you don't benefit or get paid more. In fact,
| if you are taking an administrative fee to manage the program,
| reducing expenditures can hurt your own budget.
|
| I have traveled internationally where folks paid cash for
| services. It was a bit crazy - they would basically hold you
| hostage until you paid a bill / impound your car etc. BUT you
| could buy many drugs OTC (no DR visit even required) and the
| layers of things like approvals, pre-approvals, billing and
| billing codes etc simply didn't exist.
| jcjkrigii wrote:
| This was Medicare fraud, which I imagine you'd see more of if
| universal healthcare was implemented as single payer "Medicare
| for all."
| Aurornis wrote:
| > I wonder: would this level of fraud occur if the US had
| universal healthcare, or its effective equivalent?
|
| The fraud was perpetuated against Medicare, which is the US-run
| insurance plan for people 65 and older and people with
| disabilities. Nearly 20% of the population is on Medicare.
|
| Universally letting everyone on to the plan would have actually
| allowed them to run the fraud on everyone, not just people on
| Medicare.
| readthenotes1 wrote:
| I am shocked, _shocked_ , to find corruption is going on in here!
| devmor wrote:
| If you're interested in how often people get away with this kind
| of scam, and how they get away with it, I strongly recommend the
| two episodes on the subject from the popular podcast "Behind The
| Bastards" titled "Part One: The Fake Doctors Who Gave Everyone
| Alzheimer's" and "Behind the Bastards (2018) Part Two: The Real
| Bastard Was Health Insurance Companies All Along"
|
| These episodes detail several people who pulled off these same
| scams, including how others tried to turn them in for it and were
| ignored.
| guynamedloren wrote:
| Horrible, disgusting, yet not at all surprising. I don't know
| what medical billing accountability looks like in this dizzyingly
| complex system, but as a US citizen and patient of the US
| healthcare system, it looks barely existent. My family has fought
| our fair share of bogus healthcare charges. One instance: after
| my daughter was born at a birthing center (independent of a
| hospital), my wife experienced postpartum complications and was
| transferred to a nearby hospital for care. As if that experience
| wasn't stressful and traumatic enough, many months later we were
| hit with a surprise charge from the hospital for treatment and
| care of our newborn baby - the baby that was delivered hours
| earlier, in a separate location, that never left my arms in the
| hospital!
|
| All that to say - it's alarmingly easy for a charge to get
| processed in a batch of other charges, and either insurance pays
| it without question, or the patient pays it unknowingly. During
| our experience, we learned that this kind of thing is exceedingly
| common. The power dynamic between patients and healthcare
| administration severely misaligned, the information imbalance is
| huge, and the patient is always in a compromised position.
|
| The article doesn't include details on how they tracked down
| these criminals (I'm curious to know!), but it wouldn't surprise
| me in the least if this is just the tip of the iceberg.
| DFHippie wrote:
| When our first child was born (a long, traumatic story in
| itself), after the ordeal was over and we were resting in the
| hospital, a nice fellow came by and asked whether we wanted to
| test our baby's hearing. Sure? No mention was made of a price.
| He put a device in the baby's ears. Hearing was fine. Then we
| got the bill. Hundreds of dollars, maybe $500, for a moment's
| effort and no expenditure of resources. We had almost no money
| at the time and certainly no insurance. This was in Nashville.
| He was an independent contractor they let wander the halls of
| the laying in ward accosting unsuspecting new parents. He
| bought the machine. Now he's got a steady income from this
| grift.
|
| Another event in Nashville, my wife cut her hand making dinner.
| We walked to the emergency room. Eventually someone saw us. He
| asked whether we wanted to try some experimental tree sap glue
| to close the wound. Sure? It actually wasn't much of a cut and
| it had stopped bleeding. No mention of a price. While he was
| squeezing a droplet of liquid out of a tube the attending
| physician looked over his shoulder. Yep, checks out. It was
| basically a glance, less than a minute's interaction and no
| interaction with out. The whole experience, again, when we had
| essentially no means to pay, cost hundreds of dollars. They guy
| who glanced over glue man's shoulder tacked on a couple hundred
| for himself. Coming through the door and signing some papers
| then waiting hours to be attended to cost us maybe $400.
|
| I've got similar stories from Washington, DC. My son (not the
| baby with the hearing test) had to deal with the medical system
| in Vermont. He's dead now but we're still paying the bills. And
| now we have insurance.
|
| Regular healthcare in the US looks a hell of a lot like a scam.
| If you have insurance, the scam is less visible, but it's the
| same system.
| Aurornis wrote:
| > This was in Nashville. He was an independent contractor
| they let wander the halls of the laying in ward accosting
| unsuspecting new parents. He bought the machine. Now he's got
| a steady income from this grift.
|
| Newborn hearing screening is standard, or even mandated, in
| most states. This wasn't just a grifter they allowed to roam
| the halls. They were contracted with the person to administer
| the tests. It's likely it was even required by your state
| lawmakers:
|
| Here is the page from the TN department of health that says
| all newborns should be screened before leaving the hospital
| or before one month of age:
| https://www.tn.gov/health/information-for-
| individuals/i/fact...
|
| If your state is like mine, there might be a law that
| requires this to be offered at the hospital, along with
| several other newborn screens.
|
| Newborn hearing screening isn't a scam, and the hospital may
| not have even had a choice about offering it due to the laws.
| linuxhansl wrote:
| My son got his first official letter when we was about two
| weeks old. It was a bill from the hospital for his birth:
| $8,000. He was directly charged on that bill, not us parents.
|
| And that was on top of the $24,000 bill that we had received
| from hospital. So $32,000 for a no-frills (from a medical
| viewpoint) birth and that was many years ago.
|
| The health insurance paid 100% of both bills, so we ended up
| not following up.
| Sparkyte wrote:
| If only we can be faster to detect health care fraud.
| dheera wrote:
| Related: https://hospitalogy.com/articles/2024-06-18/done-adhd-
| telehe...
| RecycledEle wrote:
| From what I see on the news, rich white-collar criminals get
| fined a small amount of what they stole and are sentenced to much
| less jail time than their poorer fellows.
|
| To remedy this, I suggest everyone adopt a system where anyone
| who stole money or did other financial damage through criminal
| means spends one day in jail for every $300 of damage they
| caused.
|
| This has several advantages: 1. The rich would no longer be above
| the law. 2. It would deter financial crimes and vandalism. 3. It
| would prevent "victim restitution extortion" where middle-class
| people are extorted to either give up their life savings or go to
| prison; They are going to jail regardless, so there is less
| incentive to set them up to get victim restitution.
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