Cases of Medicare fraud are on the rise, nationally. Chicago’s following the trend — it’s actually a fraud hotspot. As of last month, 24 medical fraud indictments have been filed in federal court in Chicago this year, nearly doubling the total for 2014. Typically, a Medicare beneficiary is the target — and scammers tend to take advantage of vulnerabilities of lower income people.
That’s what happened to Arlene Gregory. She’s in her 70s and doctor’s visits are a part of her weekly schedule. She’s had bladder cancer twice. She walks slowly, and sometimes with a limp because of a Baker’s cyst behind her knee.
She thinks her condition made her an easy target — and that’s it’s probably why a scammer approached her last summer at a food pantry.
The woman introduced herself as “Kim” and told Gregory she qualified to receive free services like house cleaning.
“I fell hook, line and sinker. I was so happy that I could get all these benefits, somebody come in and do my floors,” she recalled.
But soon after the welcome housework help, Gregory started getting unsolicited visits from nurses and a doctor.
“I kept telling them, I don’t want a nurse coming out once a week. That’s not necessary. I have my regular home physician. ‘Oh, well you got to have the nurse to be eligible for the other benefits,’” she said.
Gregory showed the pages and pages of Medicare statements she received, billing thousands of dollars for those unnecessary visits.
A doctor’s involvement in a scheme like that is key, because a physician has to sign off on treatments.
In Gregory’s case, she was also given medical equipment, like a cheap back brace that didn’t fit. Then, there were the bills for services she never got, like physical therapy and psychiatric treatment. But someone was paid by Medicare for all of these unnecessary treatments.
Kim even told Gregory that if she stuck with her long enough, Kim could get her a chairlift, like she did for another client.
Finally after several weeks, Gregory mentioned all the extra attention she’d been getting to her regular doctor, during a routine check-up.
“She like hit the fan. She was very upset. She says, ‘Arlene, these benefits are for people who are homebound,’” Gregory recalled.
Stories like Gregory’s are pretty common. Jeff Jamrosz, a supervisory special agent for the FBI in Chicago, said fraudsters are looking for doubly-vulnerable patients.
“In the low-income area, if you have a high concentration of Medicare beneficiaries with low income, maybe that cash kickback is enough to get it,” Jamrosz said.
The FBI calls these scammers “marketers.” Jamrosz said the marketers will cold call beneficiaries — or show up at soup kitchens and food pantries — to recruit potential patients.
“‘Hey, who has a red, white and blue card?’ Referring to their Medicare card. ‘I’ll give you $50 if you come with me to the doctor.’ And that’s the way in which these patients are found,” he said.
The FBI reports that general medical fraud is quite high, despite strong efforts to stem it — like a moratorium on new home health care businesses and stricter sentences for scammers.
But Jamrosz said people are still cashing in: Over a 60-day billing cycle, a home health care fraudster can collect $2500 off a single patient.
“Let’s say you do that with a 100 patients. Then the numbers get significantly larger, faster,” he said.
Jamrosz said home health care billing for Medicare in Illinois amounts to about $1 billion a year.
Last year, the federal government recovered more than $3 billion from Medicare fraud schemes — 2014 was a record high for fraud prosecutions, nationally. Health and Human Services officials predict this could be another banner year.
Jamrosz isn’t sure why fraud cases are up — but said it could be better data collection. He said investigators can spot irregularities before wrongdoing is reported, but it’s still difficult to stop.
“The minute we turn off one faucet, they’re going to open up another one, or they’re going to go somewhere else. It’s a very delicate balance because we want people to have care when they need care,” he said.
Someday Gregory might actually need home health care, which is why it’s good she worked with her doctor and a seniors organization to resolve the fraudulent billing. If she hadn’t, she might have trouble getting care in the future.
For now, Gregory still goes to the same food pantry where she met Kim — but she’s cautious about who she talks to and what information she shares.
Susie An is a WBEZ reporter. Follow her @soosieon.