Medicare finds a worm in the Big Apple

Oscar Huachillo, a former operator of New York City health clinics, pleaded guilty last week to cheating Medicare out of at least $31 million between 2009 and 2013, the FBI announced.

Huachillo's clinics supposedly provided medication injection and infusion therapy for HIV/AIDS patients. But the clinics were fraud mills that either didn't render claimed services or administered costly, diluted drugs to people who didn't need them. The drugs Huachillo's clinics dispensed are typically used to treat cancer and anemia patients, the FBI noted.

To drum up business, Huachillo and his accomplices paid clients illegal cash kickbacks of up to $300 per week to visit the clinics. And--compounding the scheme--patients could collect a $50 bonus for every new patient they referred.

Huachillo's utilization was off the charts: He collected tens of thousands of dollars in Medicare reimbursement per beneficiary, according to the FBI. Naturally that boosted his taxable income; but then Huachillo dodged more than $3.4 million in taxes owed by deliberately underreporting illegal proceeds from the scheme, according to the announcement.

Overall, "Huachillo treated our American healthcare system as a vehicle to fuel his greed and line his own pockets," said FBI Assistant Director-in-Charge George Venizelos in the announcement.

Huachillo faces a maximum of 10 years in prison for conspiracy to commit healthcare fraud and another five years for tax evasion.

Cases like his give three good reasons for anti-fraud professionals to suit up for work in the morning:

1: Protect the people.

Huachillo's case shows how some fraud schemes use patients as a means to an end. I'm not justifying the kickbacks beneficiaries took, but the fact remains that people whose health was already threatened received poor quality care at his hands. That's frightening.

Did beneficiaries visit Huachillo's clinics instead of seeing legitimate healthcare providers? Did patients know they received the wrong drug regimen for their diagnoses? And what side effects did those treatments have? Huachillo's case raises questions about how healthcare clinics are regulated to safeguard public health.

Gov. Andrew Cuomo (D-N.Y.) said each HIV case costs New York nearly $400,000 in lifetime healthcare expenses, POZ Magazine reported. So the last thing we need is questionable care marking up the hefty price tag of an epidemic to enrich criminals.

As fraud fighters, remember: Customers need you.

2: Protect the program.

The Office of Inspector General frequently reminds us that Medicare's complexity and scope make it a fraud target. Consider the shocking amount of taxpayer money lost in Huachillo's case: Roughly $31 million paid to one unchecked criminal in four years. Though most healthcare providers are honest, the corrupt few do tremendous damage, and we don't catch them all.

As fraud fighters, remember: Medicare needs you.

3: Know fraud fighting has wide ripples.

It's not surprising that those who defraud Medicare may cheat on their taxes and bilk other insurance programs. "Fraudsters will play with whomever will pay," as OIG's Jennifer Trussell said. So the benefits of taking aberrant Medicare providers off the field reach into a larger tapestry.

As fraud fighters, remember: You don't work in a vacuum. What you do has broad application and meaning. - Jane (@HealthPayer)