[Hpn] Feds go after fraud in Medicaid, Medicare

chance martin streetsheet@sf-homeless-coalition.org
Mon, 11 Jun 2001 15:37:37 -0700


Feds go after fraud in Medicaid, Medicare

June 11, 2001

So-called recruiters drummed up patients for two Chicago hospitals by
passing out cash and free cigarettes to residents of homeless shelters,
prosecutors say.

A suburban heart specialist is accused of billing Medicare for seeing 187
patients in a single day--including 32 who were dead.

Spurred by such examples, federal authorities are going after what they
describe as a tidal wave of fraud in the Medicare and Medicaid programs.

"My experience has been that the better we get and the more resources we put
in, the more we find," said Gary S. Shapiro, first assistant U.S. attorney
in Chicago.

Government auditors say $11.9 billion, or seven cents of every dollar, was
drained out of Medicare nationwide last year by waste, fraud and error.
Authorities also are concerned about the way patients are treated.

"Put these two things together, and it's hard to imagine a more significant
kind of investigation," Shapiro said.

One reason for the problems is that the two programs operate largely on the
honor system. The government usually accepts at face value the claims
submitted by health care providers.

A federal grand jury on May 17 returned a 58-count indictment charging three
doctors, an administrator and a hospital management firm with swindling the
government and private insurers out of more than $1 million at Edgewater
Hospital on the North Side.

According to the indictment, recruiters combed homeless shelters, offering
cash to anyone willing to be admitted as patients. The medical records of
those admitted were faked to assure Medicare and Medicaid payment,
prosecutors say.

Two doctors have pleaded guilty.

In another case, Dr. James H. Desnick, chairman and chief shareholder of
Doctors Hospital on the South Side, agreed in December to pay $14 million
for overbilling at the now bankrupt institution.

Desnick has not been accused of wrongdoing in the case. But a former staff
doctor and the hospital's one-time marketing director both have pleaded
guilty to fraud.

In court papers, they told how cigarettes and cash were passed out to drunks
and addicts willing to be admitted as patients. Many patients wanted
detoxification or merely a warm, dry place to sleep.

Records were falsified to show the patients suffering from chest pains or
other covered ailments, according to the papers.

What prosecutors call the largest civil fine ever for health care fraud in
northern Illinois history--$22 million--was imposed in 1999, not on a doctor
but on an attorney.

Joseph Ari Kirschenbaum was also sentenced to three years for billing the
government for the hospice care his company provided to dying people--many
of whom, as it turned out, were not dying.

By contrast, Dr. Krishnaswami Sriram, 43, of Lake Forest is accused of
billing for seeing 187 patients in one day--32 of whom were dead.
Prosecutors say he also claimed to have seen 31 patients in their homes and
18 others in medical facilities on a day when Chicago was paralyzed by a

They say Sriram was paid more than $3 million for such claims. He has
pleaded innocent.

"He intends to fight the charges," said Steven Shobat, Sriram's attorney. He
says the charges are based on "a flawed statistical analysis."

Associated Press

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