What Medicaid Fraud Looks Like: Mansions, Sports Cars, Klingon Battle Swords, and 30,000 Dubious Claims

Yesterday, I
noted a recent Government Accountability Office (GAO) report
finding that, even after a decade on GAO’s list of programs at high
risk for fraud, Medicaid had made $14.4 billion in improper
payments during the 2013 fiscal year.

Not all of that is outright fraud, but some of it is. And it’s
not all piddly scam-work either—minor billing tricks or other
small-time schemes. Some of the fraud is really
spectacular. 

For example: There’s the recent case of Rehan Zuberi, who
allegedly managed to defraud New Jersey’s Medicaid program of about
$8 million over a five year period,
according to a report in
yesterday’s Star-Ledger.

Zuberi ran a network of diagnostic imaging centers, and
allegedly paid other doctors a total of about $300,000 to send
patients to his offices for scans that they didn’t need. Zuberi
charged Medicaid for the procedures, kept most of the money for
himself, and tipped other doctors to keep referring additional
patients in order to keep the scan-scam going. According to the
state’s Attorney General, Zuberi filed some 30,000 fraudulent
claims to the program before he was caught.

During the time he is alleged to have been running the scam,
Zuberi managed to live the high life: He resided in what the
Star-Ledger describes as a 9,000-square foot mansion, and
kept $100,000 in cash in his home. He used a $400,000 cashier’s
check to buy a brand new 2014 Lamborghini. The state AG’s office
also reportedly seized a Ferrari and a Roll Royce as part of the
investigation this week. 

You hear this sort of large-scale fraud story far too often in
conjunction with the nation’s two big governemnt-run health
programs. In February, officials
charged 20 people with operating multiple competing Medicaid
fraud rings in the District of Columbia—including one woman who had
been barred from participating in federal health programs, but went
on to bill D.C. Medicaid for $75 million. 

These sorts of stories aren’t limited to Medicaid. Medicare, the
federal health program for seniors, made $49.9 billion in improper
payments last year, up more than 10 percent from the year before.
In 2011, the Justice Department busted a mob ring that had made
$163 billion worth of fraudulent bills. Authorities took custody of
a cache of weapons, including a replica
of a Klingon battle sword.

In 2011 congressional testimony, a Texas concert-promoter turned
Medicare fraudster explained how he fraudulently billed the
government for $10 million over three years. It’s “incredibly easy
to commit,” he said.
“The primary skill required to do it successfully is knowledge of
basic data entry on a computer.” 

The is what health care fraud looks like: mansions and fancy
cars, mob activity and weird weapons, and tens or hundreds of
millions of taxpayer dollars spent funding fraudsters who find the
program incredibly easy to scam.