Health Care In The States

Houston Hit Hard In Latest Medicare Fraud Bust

By Carrie Feibel, KUHF

October 17th, 2012, 6:00 AM

When federal law enforcement agents swept through seven U.S. cities earlier this month to arrest more than 91 doctors, nurses and others for Medicare fraud, one of their targets was Houston. For the Bayou City, it was the latest in a disturbing series of revelations about health care fraud there.

A picture has emerged in Houston of kickbacks and schemes to steer patients between group homes and outpatient mental health clinics offering “partial hospitalization” programs that bill Medicare.  The clinics often operate out of strip-mall storefronts or even single-family suburban homes.

A Houston Chronicle investigation last year noted that more than 75 percent of all Medicare spending in Texas on outpatient psychiatric programs is flowing into just one county: Harris County, where Houston is located.

Private ambulance companies in Houston also bill Medicare to ferry the patients back and forth. The Chronicle questioned the lack of oversight for the clinics and the medical necessity of the ambulance rides. Series reporter Terri Langford revealed that private ambulance operators in Harris County billed Medicare in 2009 almost nine times as much as companies in New York City.

“I’m more struck by why didn’t someone catch these things in the first place,” said Vivian Ho, a health economist at Rice University’s James A. Baker III Institute for Public Policy. “When you find so many additional ambulance rides going on. Or how is it that a home health care agency can bill for several million dollars and no one realizes the care isn’t legitimate?”

The October arrests ensnared leaders of an historic hospital that once served Houston’s African American community. Riverside General Hospital was once the Houston Negro Hospital – but now specializes in the treatment of mental illness and substance abuse.

The CEO of Riverside was arrested, along with his son and five other people. Earnest Gibson III has led the hospital for 30 years. The government alleges that Gibson and his employees bilked Medicare out of $158 million over more than seven years.

Riverside had already suffered the arrest of a top administrator in February, on charges of using patient recruiters to steer group home residents into its programs.  In June, Medicare stopped reimbursing Riverside for its partial hospitalization programs at four mental health sites.

While federal agents trumpet the arrests as victories in rooting out health care fraud, it’s unclear how it plays politically.

“The other side effect of all this fraud is it leads to people being less confident that their taxpayer dollars are being spent well and they end up being less supportive of government provision of health care,” Ho said.

“I think on the margin this Medicare fraud can lead people to become more cynical about supporting the Medicare program.”

Still, Ho says the answer is not giving up on Medicare but cracking down even more, especially using data mining and other digital tools.

Ho says it’s hard to know for sure, but some studies estimate that up to 10 percent of Medicare spending is actually lost to fraud and abuse.

“To that extent, 10 percent savings would be wonderful in terms of trying to deal with the deficit we’re facing because we spend so much on Medicare. So when we’re talking about fraud, if we can address it effectively, it’s not a drop in the bucket, it’s actually a tremendous amount of savings that would make us all better off.”

Ho says investigations of medical fraud slowed down after Sept. 11, 2001, when the government investigations shifted to terrorism.

But investigations and arrests have picked up over the past two years.

They often focus on organized crime rings that steal the identity of seniors and bill for services at non-existent clinics.

Criminals also use home health care, ambulance services, and medical equipment to defraud the system.

A report from the Health and Human Services Department indicates that for every dollar spent in recent years on investigating medical fraud, the government recovers more than $7.

This story is part of a reporting partnership that includes KUHF, NPR and Kaiser Health News.

7 Responses to “Houston Hit Hard In Latest Medicare Fraud Bust”

  1. Lawrence O. says:

    Many more healthcare providers need to do hard time in federal prison. Doctors, hospital administrators, pharma reps, medical equipment reps, ambulance companies, anyone that is convicted of Medicare fraud needs to be permanently removed from ever working in the health care industry ever again and then they need to go to prison and find out what it’s like to share a cell with Bubba!

  2. Bruce Wood says:

    Congatulations. We need more of this and I couldn’t agree more with Lawrence O!

  3. Lou says:

    For those of us in healthcare who work hard and with integrity, it ia always hard to hear about abusers. Kudos to those that catch them. For the countless honest and hard working individuals, criminals make our job more difficult. It is not just the immediate financial cost that fraud impacts but also the additional paperwork time that all of us spend treating the chart instead of the patient so that we are certain that we are practicing CYA medicine.
    CYA medicine costs more and often demands inordinate amounts of time “treating the chart”.

  4. TR Hammond says:

    Except for the “sharing a cell with Bubba” remark. Hopefully, new standards from the federal Prison Rape Elimination Act will gradually help to discourage us from thinking sexual abuse is just part of going to prison. An article on the topic in the NY Review of Books (Oct 11, 2012) believes the standards could result in culture change in prisons. Then we can work on the rest of us, too. Zero tolerance for sexual abuse is the new wave.

  5. Rayblahblah says:

    As the Program Administrator of a Community Mental Health Center, lumped in with those categorized as Medicare fraudsters, I need to acknowledge that there has been abuse. Our program was part of the outcry for the ambulance fraud, as well as the kickbacks by PHPs to personal care home owners. It is not easy to get approval for Medicare standing as a CMHC. We had to undergo two “desktop audits” where they looked at actual patient charts and we were subject to an on-site audit and inspection. These were expected by us as we are a free standing private-for-profit CMHC. To get to the point where we were audited we needed to provide CMHC services free of charge to at least ten patients continuously for, in our case, nearly two years, before we attained provider status. We are a physician driven program and the psychiatrists who have provided services to our patients have been very stringent regarding admission criteria and length of stay guidelines. We conduct quality management studies and nearly 60% of our patients readmit to psychiatric intensive care units (PICUs) less than 90 days after their discharge from that level of care. The purpose of a CMHC PHP is to minimize the use of 24-hour care when perhaps treatment through the day and heads on a pillow other than one belonging to a psych hospital is enough to ensure the patient’s safety and the safety of the community.

    Without an acknowledgement that there are programs who bill Medicare appropriately for genuine services provide, even in Houston, Texas, does a disservice to us and other programs who operate within the realm of integrity. Doing it right is not easy and we are all licensed professionals and we discuss issues of ethical behavior and appropriateness for care at every turn.

  6. Julie says:

    Kudos to those who blew the whistle! Behavioral Helath spending is out of control in harris and surrounding counties. I am glad to see this happen and agree with lawrence, these guys need to spend time in jail with Bubba!

  7. Ernest Imoisi says:

    Such program needs to be conducted on a regular. We work so hard, this acts are what makes our healthcare keep raising. Examples, needs to be made for those that cheat the system. Many cities, including Houston shows really un- charcterized practices.
    Good job by the government

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