Feds should watch out for phony Medicare participants

As a pediatric surgeon, David A. Partrick has had virtually no interaction with the Medicare program. "Maybe one out of a thousand patients I've treated has been in Medicare," he told me last week in a brief telephone interview.

Therefore, his application for participation in Medicare as president of Hwy Clinical Laboratory Services in Orange, Calif., should have raised some eyebrows. Partrick practices in Colorado. The phone number for this lab had an area code more than one hour's drive from its physical address. And that physical address? It's next to St. Joseph Hospital. An array of medical offices are located there, but nothing named Hwy Laboratory Services.

Dr. Partrick's eyebrows were certainly raised when he was contacted by FBI agents earlier this year. He was informed that someone had gotten hold of his Social Security number and date of birth. He doesn't know how: Unlike a lot of physicians, he's never put that info on his CV.

The fictional existence of Hwy Clinical Laboratory Services is acknowledged in a federal indictment unsealed in Los Angeles last week alleging that 10 persons in the Los Angeles area had set up dummy medical labs and practices with the stolen identities of out-of-state doctors and systematically billed Medicare for millions of dollars of care never rendered. The Southern California ring is connected to a larger gang of Armenian-American criminals operating in 25 states who have taken Medicare for about $100 million.

The crime rings operated methodically, said Thom Mrozek, the longtime Justice Department spokesman in Los Angeles. The perpetrators would rack up charges for hundreds of thousands of dollars in charges for nonexistent procedures for a couple of months, then set up another dummy business to do it again. 

The feds didn't use a computer to catch these guys: it took agents working undercover and a paid informant.

Dr. Partick is mentioned in the indictment only by his initials. Nevertheless, it took me about 10 minutes to track him down. I used a combination of California corporation records and his medical practice profile, all readily available on the Internet. I did the same for another physician, David W. Bahler, a Utah pathologist. Corporate records identify him as the president of Sonic Labzone, with headquarters in the San Fernando Valley. The address traces back to one of those anonymous mail box shops in a strip mall. Dr. Bahler acknowledged by email that he had also been contacted by the FBI and informed his identity had been stolen, but he declined further comment.

Which of course begs the question: If someone with my decidedly limited abilities could find something faulty with corporate records and track down those doctors (at their homes no less), and ask if something is amiss, why can't the federal government?

Certainly, Medicare is one of the most efficient payers in healthcare, spending about 3 cents on every dollar for administration. But hundreds of millions, if not billions, of dollars are being swiped every year. It may come in the form of upcoding, or fraudulent medical equipment firms, or what Mrozek says is the newest form of crime: nonexistent medical practices and hijacked doctors.

I suspect the feds have acknowledged that their investigatory techniques need to change. The Justice Department and the Department of Health and Human Services recently formed a joint task force to investigate Medicare fraud. HHS Secretary Kathleen Sebelius and Attorney General Eric Holder have begun a "road show" of sorts, holding regional summits in places where fraud is rampant, such as Los Angeles and Miami.

During the Los Angeles summit last month, Sebelius told reporters that Medicare participants and their addresses were being more carefully vetted, using such capabilities as Google Earth (which I used in my research for this article).

That's probably a good thing. Dr. Partrick returned my phone call, but his enthusiasm to speak with me seemed to rank somewhere lower than talking with a pharmaceutical rep or even a door-to-door siding salesman. "It's not good, and I'm not happy about it," he said of his experience with identity theft.

The Dr. Partricks of the world are entitled to practice medicine in peace. Hopefully that will occur sometime soon. - Ron