26 Arrests In Medicare Fraud Case

Associated Press

FORT LAUDERDALE, Fla. — Federal agents arrested 26 suspects in three states Tuesday, including a doctor and nurses, in a major crackdown on Medicare fraud totaling $61 million in separate scams.

Arrests in Miami, Brooklyn and Detroit included a Florida doctor accused of running a $40 million home health care scheme that falsely listed patients as blind diabetics so that he could bill for twice-daily nurse visits.

The U.S. Department of Justice and U.S. Department of Health and Human Services said the indicted suspects lined up bogus patients and otherwise billed Medicare for unnecessary medical equipment, physical therapy and HIV infusions.

Indictments were issued for 32 people in all, but the status of the other suspects wasn't immediately known.

Miami Dr. Fred Dweck, along with 14 people with whom he worked, was accused in an indictment of running a scam to tap a Medicare program that pays very high rates to care for the sickest patients.

Dweck referred about 1,279 Medicare beneficiaries for expensive and unnecessary home health and therapy services, bribing the owners of two Miami clinics to join the scam. He also faked medical certifications, according to the indictment.

A telephone listing for Dweck could not be found and it was unclear if he had a lawyer.

"No matter what type of fraud is committed, there is one common denominator and that denominator is greed," Assistant Attorney General Lanny Breuer said. "Medicare fraud is not a victimless crime. It hurts every American taxpayer by raising the cost of health care."

The raids come a week after a report that Miami-Dade County received more than half a billion dollars from Medicare in home health care payments intended for the sickest patients in 2008, which is more than the rest of the country combined, according to a report by the Department of Health and Human Services' Office of Inspector General. Medicare paid the county about $520 million, even though only 2 percent of those patients receiving home health care live here.

In Detroit's raids, suspects paid recruiters to find patients willing to feign symptoms to justify expensive testing, including nerve conduction studies, federal authorities said.

A mother and son were charged in Brooklyn with billing Medicare $246 per patient for expensive shoe inserts reserved for diabetes patients, even though they only provided cheap, over-the-counter versions.

Including Tuesday's arrests, a Medicare Fraud strike force formed by the Justice and Health departments has now charged suspects accused of bilking Medicare of more than $1 billion in less than two years.

The pilot strike force, which started in Miami in 2007, has indicted more than 460 suspects in Medicare fraud scams. The program is now in Los Angeles, Houston and Detroit. HHS Secretary Kathleen Sebelius also announced Tuesday the operation will expand to Tampa, Fla., Baton Rouge, La., and Brooklyn.

Cleaning up an estimated $60 billion a year in Medicare fraud will be key to President Barack Obama's proposed health care overhaul. HHS and DOJ have promised more money and manpower to fight the fraud.

Editorial: Blue Cross reform should wait until '09

by The Flint Journal

Sunday December 07, 2008, 6:00 AM

All good things in time. If you believe that adage, then you have to believe good legislation on the issue of individual health insurance will require more time than the Legislature has between now and the end of the year.

Blue Cross Blue Shield of Michigan has been pushing hard for lawmakers to approve changes in the way the state regulates health insurance that people have to buy individually because they don't have coverage through an employer.

That attempt is meeting opposition, particularly from state Attorney General Mike Cox, who says the proposed changes would hurt consumers and give Blue Cross an unfair advantage over its competitors.

The battle between Cox and the Blues has gotten a little nasty. That's unfortunate, because this highly complex issue can be resolved only with measured debate, not with the snide attacks that both sides have launched at times.

That aside, Cox is arguing that the lame-duck session doesn't allow enough time or the right climate of deliberation to deal responsibly with the issue. On that much he is right.

The state House erred when it passed a reform package that some lawmakers later admitted didn't get the consideration it needed. The Senate approved a more-thoughtful package, but differences between the two haven't been reconciled.

Blue Cross now wants action. We understand the insurer's desire for reform. It recently announced that in the first nine months of 2008, it lost $111 million on individual policies.

As the number of people seeking them grows, those losses will only mount.
The attorney general argues that Blue Cross remains financially sound, but the insurer faces long-term losses that would jeopardize its financial health in ways Cox isn't acknowledging.

Under state regulations, Blue Cross receives special tax benefits and in turn has a special responsibility to the public. It deserves reasonable reforms, but the attorney general's oversight should be preserved in a meaningful way.

In November, a compromise proposal became public, but we don't see how lawmakers can responsibly review such a complex plan in a short lame-duck session, nor do we think the issue should be decided by 46 House members who are leaving office and don't have to answer to voters for something rushed too quickly through the legislative process.

This issue is too complex, and there's too much at stake.

BCBS of Michigan Could use a little Bailing Out

Michigan’s Largest Health Insurer Sings Financial Blues

Posted by Victoria E. Knight

Detroit’s auto makers aren’t the only ones in Michigan seeking the government’s helping hand. The beleaguered state’s largest health insurer is looking for financial relief too.

Blue Cross Blue Shield Of Michigan wants state lawmakers to give it more leeway over how much it can charge for health insurance to offset losses the not-for-profit insurer says it has racked up as the state’s insurer of last resort, writes the WSJ this morning.

The proposal hasn’t gone down well with for-profit insurers and consumer groups, who claim BCBS of Michigan is exaggerating its financial problems.

Rival insurers don’t like a provision that would require them to pay a penalty for rejecting sick consumers who wind up with Blue Cross. Blue Cross isn’t taking that criticism lying down. “They don’t want to see Michigan change because they know it’s the last free ride,” Blue Cross’ Hetzel told the paper.

Meanwhile, consumer groups fear any future premiums hikes could boost the ranks of the uninsured.

State lawmakers are hammering out a final version of the bill. A vote could come later this week.

From the Wall Street Journal

BCBS of Michigan Tries to Pry Itself From Under Regulation

From the Kaiser Network:

Blue Cross Blue Shield of Michigan is urging the state Legislature to pass legislation that would give the insurer more flexibility in setting premium rates and reduce government regulation, the Wall Street Journal reports. The insurer said that without the changes, increasing per-member costs will lead to financial troubles. As the state's insurer of last resort, BCBS is exempt from $80 million to $110 million in state and local taxes annually in exchange for providing affordable health coverage to all applicants, including those rejected by private insurers. The firm claims that as more people in the state have lost their jobs or employer-sponsored insurance, the number of BCBS policyholders has doubled in the past two years. It says that because it cannot reject any applicants, its per-member costs are four times those of private insurers. BCBS says the company likely will have a $166.5 million loss on individual products in fiscal year 2008 and a $264 million loss in FY 2009.

In addition, BCBS is asking that other insurers be charged a "cherry-picking" penalty for rejecting applicants who end up with BCBS -- which would go to BCBS to help fund their coverage. A version of the firm's proposal was passed last year by the state House and another -- from which some of the more "dramatic" proposals were removed -- was passed this spring in the Senate, the Journal reports. A vote on a final version could be taken this week.

Other insurers, the Michigan attorney general and consumer groups have spoken out against the requests, saying the legislation would allow BCBS to charge higher premiums to sick customers and shirk its social responsibility. Richard Murdock, executive director of the Michigan Association of Health Plans, said, "This does nothing for Michigan's uninsured population, and it only raises the possibility of the worst-case scenario of higher premiums." State Attorney General Mike Cox (R) said that the firm is exaggerating its problems, noting that its reserves have increased by more than $2.96 billion from 2001 to 2007. He also said the firm has been able to cover its losses on individual products in the first nine months with other income and has recorded $110 million in profit (Fuhrmans/Martinez, Wall Street Journal, 12/4).

Blue Cross spends big to promote legislation

BY PATRICIA ANSTETT • FREE PRESS MEDICAL WRITER • March 3, 2008

Blue Cross Blue Shield of Michigan has spent $1.1 million since Jan. 1 on TV ads in seven major Michigan cities to promote a legislative agenda that would allow the nonprofit to set its own rates for individuals buying health insurance policies.

The money bought more than 2,600 TV spots, airing as often as 10 times a night, usually in prime time, including pricier buys during "American Idol," "CSI Miami" and the late-night Jay Leno and David Letterman shows.

By comparison, Put Michigan People First, one of three coalitions of commercial insurers, HMOs and others opposed to the legislation, has spent $65,000 on radio and print ads, according to Mike Nowlin, a Lansing public relations specialist who serves as the coalition's spokesman.

Read Entire Article

Michigan Attorney General Pursues Investigation of Blue Cross

Michigan Attorney General Michael Cox sent a fax on Thursday night to Dan Loepp, president and CEO of Blue Cross Blue Shield of Michigan, asking Loepp to explain by June 2 whether the company violated state laws by purchasing a for-profit insurance company for one of its subsidiaries.

Crain’s reported Thursday that Cox was looking into allegations made Wednesday at the Michigan Senate Health Policy Committee that the Blues may have violated state laws in acquiring several out-of-state insurance companies.

In the letter to Loepp, Cox asked nine questions related to the Nov. 20, 2007, purchase of CWI Holdings Inc., the parent company of CompWest Insurance Co. in San Francisco.

Read Entire Article

Michigan BCBS Proposals Under Scrutiny

Christina Rogers / The Detroit News

A legislative battle in the state's Capitol over new regulations for insurers selling individual policies will resume in mid-April, when members of the Senate Health Policy Committee hold another round of hearings and move to a final committee vote at the month's end.

On the table are several alternatives to a package of bills passed by the House of Representatives last fall. The proposed legislation would among other measures make it possible for the Blue Cross Blue Shield of Michigan, the state's insurer of last resort, to divvy up the financial load of paying for its sickest -- and most costly -- customers by requiring commercial insurers to pay into a high-risk pool.

Last month, the Senate committee's chairman, Sen. Tom George, R-Kalamazoo, pitched a series of substitutes to the Blues-backed legislation.

Read it All Here

New Plan for Michigan Health Insurance Reform

From Our Own Detroit Free Press

State Sen. Tom George offers a well-thought-out plan for health insurance reform
April 6, 2008

On matters of public health, the State of Michigan's overarching goals must be improving it and increasing access to care.

With those guideposts, state Sen. Tom George, a physician, has a better plan for health insurance reform than one put forward by Blue Cross Blue Shield of Michigan and shot through the House last fall with disgracefully little review for an issue of such importance. George, a Republican from Kalamazoo, has, after a series of hearings he chaired in the Senate Health Policy Committee, produced his own set of proposals for the individual insurance market -- and they make sense.

Blue Cross, a not-for-profit agency set up through state law, has been lobbying for changes that the Blues say will enable them to be more competitive in the growing individual insurance market. At the same time, the Blues want less regulation and more freedom to invest in for-profit subsidiaries.

Read The Rest of New Plan for Michigan. . .

Images From Kelso House AFC

We thought we should share some photographs taken during the past several months here at Kelso House. Enjoy!

More on BC/BS of Michigan and House Bills 5282-5285

In a recent blog post, Jeff Emanuel discusses Michigan House Bills 5282-5285, pertaining to changes in insurance laws being pushed by Blue Cross / Blue Shield of Michigan. His introduction reads:

“In late 2007, after a single perfunctory committee meeting, the Michigan House of Representatives passed a series of four bills which, if approved by the Senate and signed into law by Gov. Jennifer Granholm, will have a very negative effect on the health insurance market in the state.”

. . . and later in his article he writes:

“Health care giant Blue Cross Blue Shield (BCBS) has long enjoyed tax-exempt status in Michigan, as the result of a 1938 deal BCBS made with the state to be the “insurer of last resort” for otherwise uninsurable consumers. This means, for tax purposes, that the carrier was treated as a non-profit corporation, while actually operating as a for-profit business.”

To read Jeff’s entire article, go to his blog-entry page.

Besides being a self-described “combat journalist,” Mr. Emanuel is a Research Fellow for Health Care Policy at the Heartland Institute (a free-market public policy organization) - and - the Managing Editor of Health Care News.

Is New Blue Cross Plan Bad for Michigan?

Blue Cross / Blue Shield of Michigan is trying to push a controversial insurance bill through the Michigan state legislature. Michigan attorney general Mike Cox is adamantly opposed to the bill, and he recently wrote an editorial expressing his opinion and his reasons. Here is that editorial. Please take the time to weigh in on this serious topic — the new bill could adversely affect Michigan’s elderly population and hamper the efforts of Senior Care Providers, Assisted Living Facilities, Adult Foster Care Homes, and Nursing Homes, to keep their clients in good health.

Published January 13, 2008 [ From Ingham County Community News ]

Blue Cross plan is bad for Michigan

by Mike Cox — Attorney General for State of Michigan

Michigan citizens could see dramatic changes to their health insurance rates and coverage if the legislature approves a package of bills being pushed by Blue Cross. If signed into law, House bills 5282-5285 will cause subscribers, especially the old, sick and most vulnerable, to pay much more for coverage or lose their insurance altogether, while fattening Blue Cross’ already profitable bottom line.

The Blues were created in 1939 and given a social mission; specifically, to be the “insurer of last resort.” As a result, Blue Cross was also made tax-exempt. By their own admission, this tax-exempt status benefits the Blues by at least $82 million each year.

And Blue Cross has done well. Their share of the commercial health insurance market in Michigan is 70 percent. Their surplus has more than doubled in the last five years, to more than $2.8 billion, the highest in history. Blue Cross makes more than a million dollars a day in profits.

Salaries are on the rise, too. According to data filed with state regulators, Blue Cross paid its top ten officers $11.5 million in salary and compensation in 2006 — that’s a 42 percent increase since just 2004.

Guess what else has been going up? Rates. Individuals seeking health insurance have seen their rates skyrocket by 79 percent since 2003. And for those folks who have converted from group policies, their insurance rates have shot up even more — a 92 percent increase since 2003.

Not surprisingly, these massive rate hikes mean that more and more Michigan citizens and families can’t afford insurance. The number of uninsured in Michigan has gone up 8 percent since 2001. And the number of people on Medicaid has ballooned by 38 percent in that same time period. The result: One out of every four Michigan citizens is either uninsured or on Medicaid.

But Blue Cross says that it is heading for a “death spiral.” So the Blues are pushing a package of bills that will do the following:

# Deny coverage of pre-existing conditions for 12 months, a doubling of denial time;

# Charge new customers with chronic diseases such as diabetes up to 80% more;

# Charge new customers with serious illnesses such as cancer up to 250% more;

# Enable the Blues to triple their margins for administrative expenses and profits; and

# Eliminate oversight by the Attorney General and the Governor’s Office of Financial and Insurance Services (OFIS).

Oversight is crucial. This year, Blue Cross sought a 50 percent hike on the premiums that seniors pay for Medigap insurance. I intervened, saving more than 215,000 Michigan seniors $97.5 million initially, and over $69 million per year after that.

These bills would also eliminate the Governor’s ability to provide oversight of rates, by eliminating the ability of the Commissioner of OFIS to set rates. As a result, all state oversight — the ability to intervene and fight for lower rates — for any of Blue Cross’s future rate hikes would, for all practical purposes, be wiped out.

These bills seriously jeopardize Blue Cross’ social mission to care for the oldest and sickest in Michigan, and they destroy the Attorney General’s mission to protect them. I call upon citizens to contact their state legislators and urge Blue Cross stay true to its traditional — and legally required — mission “to secure for al of the people of this state … the opportunity for access to health care services at a fair and reasonable price.”

Mike Cox is Michigan attorney general.

Defining Adult Foster Care for the Aged

The Michigan Department of Human Services has published the following definitions of Adult Foster Care and Home for the Aged:

Who Needs Foster Care

Out of home and non-nursing home options include Adult Foster Care and a Home for the Aged. Adult Foster Care (AFC) homes are residential settings that provide 24-hour personal care, protection, and supervision for individuals who are developmentally disabled, mentally ill, physically handicapped or aged who cannot live alone but who do not need continuous nursing care. AFC Homes are restricted to providing care to no more than 20 adults A Home for the Aged (HFA) provides 24 hour room, board, and supervised personal care to: 21 or more unrelated, nontransient individuals 60 years of age or older. 20 or fewer individuals 60 years of age or older that is operated in conjunction with and as a distinct part of a licensed nursing home. Note: HFA is restricted to providing care to persons who are 60 years of age or older If you are uncertain about the level of care needed by the individual seeking adult foster care or a home for the aged, check with the individual’s doctor or the Adult Services Unit of your local Department of Human Services (DHS) for assistance. Both AFC Homes and HFA provide care to persons who are or have: Aged Mentally Ill Physically Disabled Alzheimer’s Disease or other Dementia Related Disorders Care may include assistance with bathing, grooming, dressing, eating, walking, toileting or the administration of medication. Statutory Authority - Regulation of Adult Foster Care homes—Act No. 218 of the Public Acts of 1979, as amended. Regulation of Homes for the Aged—Act No. 368 of the Public Acts of 1978, as amended.