Even after doctors are sanctioned or arrested, Medicare keeps paying

A ProPublica analysis of recently released data shows that dozens of physicians who received payments from Medicare in 2012 had been kicked out of Medicaid, charged with fraud, or settled claims of overbilling Medicare itself.

This story was co-published with NPR

In August 2011, federal agents swept across the Detroit area, arresting doctors, pharmacists and other health professionals accused of running a massive scheme to defraud Medicare.

The following month, several of those arrested —including psychiatrist Mark Greenbain and podiatrist Anmy Tran — were suspended from billing the state's Medicaid program for the poor.

"Health care fraud steals funds from programs designed to benefit patients, and we all pay for it," U.S. Attorney Barbara McQuade said in a press release at the time of the arrests. "We hope that the strength of our efforts will have a deterrent effect."

But the indictment and Medicaid suspensions didn't deter Medicare from continuing to allow the doctors to treat elderly and disabled patients — and billing taxpayers for their services.

In 2012, Medicare paid Greenbain more than $862,000, according to newly released data on Medicare payments to physicians. Tran received $155,000.

Greenbain and Tran were among dozens of doctors identified by ProPublica who Medicare kept paying after they were suspended or terminated from state Medicaid programs, indicted or charged with fraud, or had settled civil allegations of submitting false claims to Medicare.

Outlays to these doctors amounted to more than $6 million in 2012, ProPublica's analysis shows. That's a small fraction of the $77 billion Medicare has publicly reported paying that year for doctors' visits and outpatient services in its Part B program, but it signifies a hole in regulators' ability to protect the program — and patients — against fraud and abuse, said current and former government officials and fraud experts.

The total dollars paid to sanctioned doctors is likely much higher. Only a handful of states post online the names of doctors terminated from Medicaid programs in a way that can be accurately matched to Medicare Part B payments.

"If you've been suspended or terminated in one of the federal programs...I would think that you'd be suspended in the other programs, just as a basis of good practice," said Louis Saccoccio, chief executive of the National Health Care Anti-Fraud Association.

Part B payments to doctors were released last week for the first time. A court injunction that had kept the information secret for 35 years was lifted last year as a result of a lawsuit by Dow Jones & Co., parent company of the Wall Street Journal.

But Medicare has long had access to the information. "They're the ones doing the paying," Saccoccio said.

Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, said he could not discuss the status of individuals, such as Greenbain and Tran, both of whom were finally barred from billing Medicare this month.

By that time, Greenbain had pleaded guilty and been sentenced to four years in prison. Tran had been found guilty and trial and was sentenced to five years. She is appealing her conviction.

Albright said the Medicare payment data may not reflect money already recovered by his agency or held back from providers suspended from billing the program.

Preventing improper payments is a top priority for CMS, Albright said. The agency has employed new enrollment screening techniques to prevent high-risk providers from getting into the system and is using advanced data analytics to spot fraudulent billing before payments are made, he said. "Already, we have cracked down on tens of thousands health care providers suspected of Medicare fraud," he said in an email.

Medicare's fraud-fighting efforts have been criticized repeatedly in recent years. In an audit released last month, the inspector general of the U.S. Department of Health and Human Services found that about one-third of states hadn't told CMS when they terminated providers from Medicaid and others had provided incomplete information, hobbling regulators' ability to flag sanctioned professionals.

In December, the inspector general faulted Medicare for not systematically reviewing the billings of the program's top-paid doctors and said it should be doing more to spot aberrant claims.

Last year, ProPublica reported that doctors who had been terminated from Medicaid or had been disciplined by state medical boards were able to continue prescribing medications to beneficiaries in Medicare's drug program, prompting Sen. Charles Grassley (R-Iowa) to push for better coordination.

Medicare has more direct responsibility for overseeing activities in Part B than in the drug program, which is administered by private insurers. The drug program doesn't even require that prescribers be enrolled in Medicare and payments go to pharmacies, not doctors. By contrast, in Part B, it's up to Medicare to monitor services and payments, which go to clinicians or their employers.

"There's been a disconnect between Medicaid and Medicare on problem providers," wrote Grassley, ranking Republican on the Senate Judiciary Committee, in an email to ProPublica. "The release of Medicare billing data should help force better communication between Medicaid and Medicare on these providers. The new transparency makes it harder to ignore when doctors who harm patients or defraud taxpayers in one program face no consequences in the other program."

Sen. Tom Carper, (D-Del.), chair of the Senate Homeland Security and Governmental Affairs Committee, credited Medicare with ramping up efforts to verify the credentials of those treating its beneficiaries. "But there is still much work to be done," he said in a statement.

Among the physicians ProPublica found who continued to collect Medicare payments after being flagged by law enforcement or other oversight agencies:

Dr. Lawrence Eppelbaum, a Roswell, Ga., pain doctor convicted last year of inducing patients to be treated at his Atlanta pain clinic by paying their travel fees through a purported charity he controlled. He was indicted on the charges in March 2011, but Medicare paid him $500,000 to treat 80 patients the following year. This February, Eppelbaum was sentenced to 50 months in prison and fined $3.5 million. He is appealing.

In a sentencing memorandum, Eppelbaum's lawyer maintained that Medicare did not lose any money because of the doctor's conduct. "Virtually every patient would have received treatment somewhere, by some doctor," he wrote. "Thus, Medicare would have paid the exact same amount of money, albeit possibly to another provider."

Michigan ophthalmologist Matthew Burman was suspended by the state's Medicaid program in 2009 after he was convicted of a misdemeanor count of criminal sexual conduct arising from a patient's accusation against him. He subsequently surrendered his medical licenses in Texas and California and agreed not to activate his registration in New York. He was paid $379,000 by Medicare in 2012. (Medicare has not released payment data for prior years.)

Burman, who continues to practice in Michigan, said he could have re-enrolled in Medicaid but chose not to. "One has nothing to do with the other," he said. "I didn't violate any Medicare rules. Medicare has nothing to do with why I'm not a Medicaid provider."

Las Vegas pain doctor Steven Kozmary agreed in December 2011 to pay the federal government $1 million to settle health care fraud allegations involving Medicare and other programs. The government could have moved to terminate him from Medicare, according to the settlement. Instead, in 2012, Medicare paid him $563,000. He was disciplined by Nevada's medical board in 2013 related to the 2011 settlement. He did not return a phone call.

Louisville Dr. Steven Stern and his practice paid $350,000 to settle allegations of overbilling Medicare in September 2011. He and his practice were accused of overbilling Medicare for infusing Infliximab, a drug used to treat rheumatoid arthritis. Specifically, they were accused of splitting vials of the drug across multiple patients but billing as if a whole vial was used for each. In 2012, Stern received more than $3 million in payments from Medicare, including $2 million for infusing Infliximab. He did not return a phone call seeking comment.

Eight of 14 New Jersey health providers arrested in December 2011 on charges of receiving kickbacks for referring Medicare and Medicaid patients to a specific MRI center continued to be paid by Medicare in 2012. At the time of the arrests, Tom O'Donnell, special agent in charge for the HHS inspector general said, "The audacity of these physicians should offend honest taxpayers, especially at a time when our taxpayer resources are stretched thin."

Even a guilty plea sometimes wasn't enough for Medicare to cut off payments. Dr. Anthony Jase of New Orleans pleaded guilty to two counts of health care fraud in October 2011. He still collected $97,460 for Medicare billings in 2012. Last fall, he was sentenced to 15 months in prison and ordered to pay $360,293 in restitution.

"It certainly looks like there is a need for more attention," said Mark McClellan, former administrator at CMS who is now at the Brookings Institution. "One important consequence of the release of this information at the physician level is that it will lead to some further analysis and actions against these truly outlier physicians who are clearly billing improperly."

ProPublica's analysis also found payments to doctors who were subsequently barred from billing the program by the HHS inspector general, mostly because of fraud convictions. Medicare paid 135 of them more than $18 million in 2012, before they were kicked out.

Some doctors have been indicted post-2012, including Michigan oncologist Farid Fata, a Michigan oncologist who was paid $10 million in 2012, ranking him among Medicare's top-paid providers that year. Last year, Fata was accused of misdiagnosing patients with cancer so he could give them unnecessary, expensive treatments. Fata has pleaded not guilty; his lawyer did not respond to a request for comment.

In a conference call last week with reporters, CMS' principal deputy administrator Jonathan Blum said the agency knows it can do more to find fraud. "We know that there's waste in the system. We know that there's fraud in the system. We want the public's help" to review the physician payment data and report suspected wrongdoing.



Exporters diverting sugar in domestic markets?

Sugar exporters are reluctant to continue to export due to delay in getting the export subsidy of Rs3,333 per tonne. In fact, there are unconfirmed reports that some exporters, who have taken delivery, have diverted the goods to domestic market

The sugar industry is at cross-roads today. The whole sale price of sugar has gone down to be between Rs31.50 and Rs32.50 per kilogram and in many super market chains, if one buys on a "combo" basis, the consumer may get sugar at Rs31/kg.


On the whole the sugar industry - mills, farmers, cooperatives have been facing trouble since the last season. The sugar industry had huge arrears to pay to farmers, their cooperatives, transporters and the agricultural minister Sharad Pawar sought the government to give interest free loans to sugar mills to tide over the difficult situation.


While speaking at the 79th AGM of Indian Sugar Mills Association (ISMA), its chairman Srinivasan pleaded to the government to increase import duty on sugar to 40% from 15% and at the same time advised the government to create a strategic reserve of 2 million tonnes, use it in public distribution systems (PDS) and stabilise the market price beside setting a target of 4 million tonnes of raw sugar for export.


Apart from soft loans, an export subsidy of Rs3,333 per tonne was finally announced. Despite hiccups, so far, 1.45 million tonnes of sugar have been exported but the delay in getting the subsidy is making exporters reluctant to continue. In fact, there are unconfirmed reports that some exporters who have taken delivery have diverted the goods to the domestic market.


Meantime, global prices have also come down and reports on El Nino has been appearing in the press all over the world, because the rainfall pattern in South America has also been abnormal and weather bureaus are watching the situation in the Pacific carefully. The Indian Meteorological Department (IMD) is also of the opinion that this El Nino disturbance (intensity is not yet known) may affect our agricultural plans.


On the meagre subsidy, during recent WTO meet, Australia, Brazil and US raised objections and sought the Indian government to roll over its plan, as they felt, this subsidy (of Rs3,333 per tonne) would distort the global trade! Thankfully, it was clarified that this meagre subsidy was given to overcome some domestic problems faced by the industry and, as our own export was too small compared to the giants in the trade, it really would not make a dent in the international trade.


The sugar industry has not paid serious attention to the question of producing ethanol despite the mandatory 5% blending that the government has instituted. This has to progressively increase to 20% by 2017 when this move would bring in substantial saving in fuel imports. So far, only UP, Karnataka and a few depots in Maharashtra have taken this ethanol use seriously and have reached a 10% blending.


Realising the importance of import savings in this manner, the Inter-Ministerial Group (IMG) has now decided to revise the formula, which was used to arrive at the bench mark price of ethanol, which is currently Rs44 per litre. The revised formula is likely to be average refinery transfer price (RTP) for the previous financial year (or the cost of petrol to the oil marketing companies). This formula is likely to fetch an additional Re1 or Rs2 for the mills while the sugar industry expects this to be actually increased to Rs5 per litre! This again, is a decision that the new government has to take.


If the government is serious to introduce ethanol and reach the target of blending up to 20%, then it is imperative that directives are given to oil marketing companies (OMCs) to call for the tenders well in time and give priority to suppliers. As per the last report 65 crore litres of ethanol have been offered and only 31.55 crore litres have been lifted by them. This means OMCs are also not taking this matter seriously and a government directive to ensure increased acceptance of ethanol would make the project successful.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)


Consequences of Income Inequality

In a world of weak demand and oversavings, the last thing we need are policies that encourage income inequality. The people who benefit most from income inequality will use their political power to continue the process. It will eventually will hurt them as well

I live in a small city in New England south of Boston. The town of Newport  in the 18th century was once one of the largest cities in the American colonies. Today the town is not known for its large in tact collection of 18th century houses. Instead it is usually identified with another time in American history, the Gilded Age.
The Gilded Age occurred in the late 19th and early 20th centuries. It was a time of great economic growth. It was also dominated by some famous names such as Rockefeller, Carnegie and Vanderbilt. Many of these so-called robber barons took their enormous wealth and built huge summer houses in Newport. So as not to be ostentatious, they referred to them as ‘cottages’.
The largest of these cottages is called the Breakers. The house was finished in 1895. It has 70 rooms and cost $150 million in today’s money. It appears as a symbol not only of extravagance, but also of income inequality. The fabulously wealthy could build palaces, because the top 1% had managed to corner 18% of the country’s wealth.
But times change, or do they? Today the wealthiest 1% of Americans have managed to even out do the robber barons. They now own 24% of the nation’s wealth.
America is not alone. Throughout the world income inequality is a major problem and growing. Is this simply a question of unfairness? Yes, but is it more than that. It threatens not only social stability, but also economic growth.
The good news is that the rapid economic growth in China and other developing countries has made the world a more equal place. Over the past 30 years literally billions of people have been lifted out of absolute poverty. The Asian Development Bank (ADB) defines the demarcation line between the poor and the middle class as those living on more or less than $2 a day. In 1981 58% of global population lived below that line. Only 20% or 930 million lived above it. This group is defined by the ADB as ‘middle class’. They earned between $2 and $10 a day.
Today that middle class has grown substantially. Today 2.8 billion people or 40% of the world’s population live on between $2 and $10 a day. This is exceptionally encouraging, but there is a down side. Although almost 2 billion people have climbed out of absolute poverty, few people make it beyond the middle class and the margins to slip back into poverty are very narrow.
Part of the problem is that as the world became wealthier, the wealthy did much better than anyone else. The GINI index measures the disparity of wealth. It is a scale of 0 to 1.0. The lower the number, the more equal the country is. If the GINI coefficient was 0 all people would have the same wealth. If it is 1.0 just one person owns everything. In Asia the GINI index rose about 1% per year throughout the 1990s and 200s.
Part of this trend has to do with urbanization.  People in urban areas have more opportunities than subsistence farmers. Urban areas also grow faster. So as countries develop and urbanize inequality grows. But this is not the whole story. This is particularly true in China where the gap between the urban population and the countryside rose. In contrast in India inequality has risen sharply among urban populations.
Rising inequality though is not just a problem for the developing world. It is interesting to note that the United States and China have similar numbers.  According to the World Bank the GINI coefficient for the US is 45 and 47 for China. This compares rather unfavorably. The numbers for Germany and France are 28 and 32 respectively. India and Indonesia are both about 34.
The inequality in both the US and China are based on the legal infrastructure. The US as Warren Buffet famously pointed out taxes him less than his secretary. Investment and speculation are taxed at half the rate of earned income. The finance industry makes up 8% of the US GDP, but generates 29% of the profits. The Federal Reserve has been exceptionally helpful by providing extra  money to spur the speculation Not surprisingly talent and political power have gravitated to finance.
The costs of elections in the US have been skyrocketing. The total cost of the 2012 elections, including congressional races, topped $7 billion. The money has to come from somewhere and its not given for free. The US Supreme Courts’ recent decisions haven’t helped.
But the US politicians pale besides their Chinese counter parts. The 50 richest members of the US Congress control $1.6 billion. The 50 wealthiest delegates to China’s congress control $15 billion.  
But so what? Does inequality slow growth? The answer is an unequivocal yes. It reduces demand by forcing down consumption. The obvious point is that the poor have to spend more of their incomes than the rich and the rich save more. If you take purchasing power out of the hands of mass consumers, then it decreased demand. Without demand the rich have fewer reasons to justify reinvestment in productive ways such as new plants.

We are seeing this in the US. Corporations are sitting on huge piles of uninvested money. In China they keep investing, but in unproductive ways such as new uninhabited cities and over capacity. Since households retain an ever-smaller share of the total amounts of goods and services, it is hardly surprising that they also consumed an ever-declining share of GDP.
Income inequality is not a natural form of capitalism. It is not a prerequisite for growth. It is a choice. It is often a choice of those entrenched interests who benefit by it. But in a world of weak demand and over savings, the last thing we need to are policies that encourage income inequality. Yet the sad fact is that the people who benefit most from income inequality will use their political power to continue the process. Tragically it eventually will hurt them as well

(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first-hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and speaks four languages.)



Ramesh Poapt

3 years ago

Good,analytical article!Not many serious readers to appreciate?


3 years ago

The Monopoly "end game". I remember that after the players were reduced to just two who owned all the sites and hotels and all the others were bank rupt, the winners would distribute all the money in the Bank (equitably) to all the players to prolong the game and the joy of winning. Provided the other players were young and naive enough. Like stealing candy from babies! The next revolution will come when the "divine rights" of "capitalism" are exorcised from the minds of the Great Unwashed of the West as the "Divine Rights" of feudal Lords was not so long ago, and the "Divine Rights" of Commissars and Neta-Babus are being questioned as we speak.


3 years ago

The Monopoly "end game". I remember that after the players were reduced to just two who owned all the sites and hotels and all the others were bank rupt, the winners would distribute all the money in the Bank (equitably) to all the players to prolong the game and the joy of winning. Provided the other players were young and naive enough. Like stealing candy from babies! The next revolution will come when the "divine rights" of "capitalism" are exorcised from the minds of the Great Unwashed of the West as the "Divine Rights" of feudal Lords was not so long ago.

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