Southern California is among the nation's "hot spots" for healthcare fraud, U.S. Attorney General Eric H. Holder Jr. announced at a special summit held in Los Angeles last week.
Medicare and Medicaid systems are regularly being gamed by unscrupulous hospital operators, dummy durable medical equipment companies, and even organized crime groups that steal the identities of physicians in order to collect fraudulent billings, Holder, U.S. Health and Human Services Secretary Kathleen Sebelius and other federal officials told an audience at Los Angeles City College.
"At a time when so many families are scraping together every last dollar to pay their medical bills ... abuses like fraud and waste in our healthcare system are simply unacceptable," Sebelius said.
Holder did not specify why Southern California was a center for healthcare fraud, but suggested that its urban sprawl makes it easier for criminals to operate undetected.
In 2009, DOJ and HHS officials formed a joint strike task force called the Health Care Fraud Prevention and Action Task Force (HEAT) to combat criminal activity. HEAT uses a variety of methods, including educating senior citizens to better spot fraud, and working closely with local law enforcement agencies. Since HEAT was formed, it has secured nearly 600 criminal convictions and recovered $2.5 billion, according to Holder.
The day before the summit, Saint John's Health Center, a 268-bed hospital in Santa Monica, agreed to pay $5.25 million to settle claims it had inflated charges to Medicare for care provided to "outlier" payments. Andre Birotte Jr., U.S. Attorney for the Central District of California, cited the settlement in his speech.
Regarding HHS, Sebelius said her agency has ratcheted up scrutiny of Medicare contractors, requiring them to resubmit their credentials and forbidding the use of post office boxes for addresses or cell phones as business numbers. Under the Patient Protection Act signed into law earlier this year, Sebelius also has the discretion to suspend the certification of new contractors as a fraud-fighting tool.
The joint summit is the second in a series held by DOJ and HHS. The first was held in Miami in July. Holder said a crackdown on the South Florida region has reduced healthcare fraud there dramatically, but noted its practitioners have probably moved on to other parts of the country.