José Luis Soto, deputy director at the OIG of the US Health Department in Puerto Rico. (semisquare-x3)
José Luis Soto, deputy director at the OIG of the US Health Department in Puerto Rico. (André Kang)

Between 2010 and 2018, the Office of the Inspector General (OIG) of the US Department of Health and Human Services in Puerto Rico convicted 238 people of fraud related to Medicare and Medicaid programs.

The number reflects the serious fraud problem the island is facing and the effort of federal authorities to revert the losses that these schemes cause to healthcare services.

"When you commit this type of crime, you are not only defrauding the government or the plan, delegated by the government, you are also defrauding the beneficiary, who may be stolen information to submit false claims," said José Luis Soto, deputy director at the OIG of the US Health Department in Puerto Rico.

Fraud against federal healthcare programs happens when someone knowingly submits false information with the intention to defraud. "We are identifying whether such claim was false or not," he said.

According to the National Health Care Fraud Takedown 2018, the OIG and the US Department of Health issued, between June 2017 and 2018, a total of 587 exclusion notices against individuals and entities whose conduct contributed to the diversion and abuse of opioids. 

Throughout the United States, these notices exclude these people from participating in all federal healthcare programs, including Medicare and Medicaid. There were 67 doctors, 402 nurses and 40 pharmacies among those notices.

Soto explained that these statistics do not include data on the island since, during the period under review, there was only one search warrant issued in the office of a podiatrist which did not end in arrest. 

In the United States, doctors, nurses, licensed health professionals and owners of healthcare companies were accused of submitting more than $ 2 billion in fraudulent billing.

In New York Eastern District, 13 people were accused - during the time evaluated - of participating in a variety of schemes, including bribes, not provided services, identity theft and money laundering, involving more than $ 38 million in fraudulent billing .

Different schemes

The official warned that it is difficult to determine what type of fraud prevails the most on the island, as well as the amount of losses at local level.

However, Soto confirmed that they have observed - in Puerto Rico and in the United States - an increase on schemes in controlled medicines area.

Having the  insurance company paying for clinically unnecessary drugs and altering the packaging is included within this type of practice.

"Right now, it's a mix of everything. I would tell you that if we classify them, doctors, medical equipment and medicines are among the most visible," said the federal official.

He stressed that, a few years ago, the main fraud was in the medical equipment supplier industry.

Soto stated that the decrease inthis line is the result of several initiatives. As an example, he mentioned the efforts of the OIG and contracting, through Advantage plans, specific companies to sell equipment.

"We had cases of prosthesis for patients with both legs," said Soto.

One of the modalities within medical equipment fraud was among individuals who moved to the island and acquired this type of company for their transactions.

He explained that, once the company was acquired, the new owner changed the banking information and Medicare records into his name, and thus obtained patient lists. "If you buy the company, they sell it to you with the records, and you start to submit false bills," he added.

Under that scheme, in 2010 - after an OIG investigation – the Federal Prosecutor's office prosecuted Antonio Del Pino Castillo, owner of Marla's Medical Equipment (MME), who submitted $ 934,406 to Medicare in false claims for leg prosthesis for people who did not need them.

Medicare paid $ 531,485 of the total claims.

"We have to work very fast in this type of cases because they are schemes that come from Miami, and right now, we have had cases that left the jurisdiction," he said.

South Florida is known as Medicare and Medicaid fraud capital, said Soto. "Right now, the Miami office is one of the offices where we have the most resources. There are $ 100 (million) and $ 300 million cases, there," he said.

The Doctors scheme 

There are several schemes among doctors: unnecessary prescriptions, practicing without license, bills for services not provided and altering claims.

"It is usual to forge medical records to cover what they did," said Soto.

These schemes imply prison, reinstating the money, losing the licence and well as the exclusion as an OIG provider.

"We had large restitutions. We had a case that had to pay $ 2.5 million," Soto recalled.

Joint initiatives

Soto explained that they maintain collaboration agreements with other state and federal agencies to expand the scope of their. 

The Federal Bureau of Investigation (FBI), the Federal Drug and Food Administration (FDA), US Immigration and Customs Enforcement (ICE), the Drug Enforcement Administration (DEA), the Department of Health and medical plans are among those agencies.

They also hope that the fraud control unit (Medicaid Fraud Control Unit), also known as MFCU, will soon start operating.

The creation of this unit - which would be attached to the state Department of Justice -, was announced by Ricardo Rossello Nevares administration in July. It represents an alternative for the OIG to submit cases at state level.

MFCU would investigate supplier fraud cases, abuse and neglecting and mistreating  patients. "The question here is to look for other forums. Typically, these cases of fraud against health services programs tend to be abit complex. What we are trying to do is look for more resources, see how we can move them faster," he noted.

Puerto Rico was the only jurisdiction of continental US that did not have a unit against fraud. "If you remove these people fast, then you block and prevent from losing money, that is what we want to do,” he explained. 

“Out of necessity"

During the last four years, the Department of Health Medicaid program received 2,700 referrals to investigate possible fraud cases of the Government's Health Plan.

Recovery does not exceed $ 250,000 in the last four years.

Luz Cruz Romero, executive director of the program, explained that they exclusively investigate the schemes in which participants alter information to qualify for a public medical plan. She said that most of the beneficiaries lie about their income to qualify.

"You can find that pattern in any social assistance program. Fraud has always existed, it will always exist. The important thing is to have the tools and mechanisms to prevent it," said Cruz Romero.

Health insurance serves a population of 1.5 million individuals.

She indicated that they also maintain information exchanges with the Department of the Treasury that allow them to investigate and identify suspicious patterns that, if not under their jurisdiction, are referred to the OIG.

She said that, in 2016, they discovered a scheme through which government employees sold eligibility certificates.

Based on the amount and the scheme, the OIG processes them, and if not, they go on to an internal administrative hearing process before the Department of Health, and then they proceeds to the recovery of the premium or a fine.

"We try to be proactive, but we depend on referrals. If referrals arrive with information that is not sufficient to open or to reach a conclusion, that case does not prosper," said the official.

Cruz Romero acknowledged that, in most cases, participants involved in this type of criminal attitude claim that they do it out of necessity.

"Many people are in need, and in many cases the person is eligible. The fear of not being eligible, not being able to obtain the card because they have health conditions, leads people to hide information," she said.

To qualify, an individual can not exceed $ 800 per month income. The figure rises to $ 1,200 in the case of minors. 42 percent of the insured population has the government's plan.

For professor and sociologist Joel Villa, the fraud on the island is the same as in other spheres and jurisdictions. He said that - in several cases - it is due to systems vulnerabilities that have not been corrected.

"Fraud happens in all spheres. It does not respond to us being a corrupt country," said the professor at the Interamerican University of Puerto Rico.

"There will always be a person who, when they realize there is a vulnerability, will take advantage of it," he noted.

The easy way out would be to resort to this type of behavior as a result of lack of values, said Villa. "It would fall into something utopian and philosophical ...", he pointed out.

Meanwhile, psychologist Carlos Sosa argued that, from the service providers perspective, many have fallen into the lucrative vision that the medical industry generates.

From the patient's perspective - without trying to justify the actions - Sosa sees this behavior as a sign of despair. "The cost of living has risen so much that many times they lie to cope with such high pressure to preserve health", he said.

"There is a critical situation in Puerto Rico. On one hand, we have people who are economically disadvantaged, and on the other, those who have a vested interest in making lot of money at the expense of that economic disadvantage," he concluded.


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