Continuing our discussion of psychiatric fraud (see our recent newsletter on Medicaid), we highly recommend an excellent article on Medicare and Medicaid fraud by Chris Parker in the St. Louis Riverfront Times (RFT) (“Thieves’ Bazaar: Hospitals, doctors and dealers have made Medicare the nation’s sweetest crime”, 4/25/2013).

Medicare is a federal government health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant).

Following are some quotes and paraphrases from the RFT article.

“Think of the Medicare program as a bank that never bothered to buy a safe. Everyone from HMOs to drug dealers have been caught robbing it time and time again, stealing the kind of money that makes the sequester look like pocket change.”

Since 2007 the federal Health Care Fraud Prevention and Enforcement Action Team (HEAT) has charged 1,480 defendants with $4.8 billion in fraud.

In 2011 Mohammad Khan, administrator of Houston Riverside General Hospital, confessed to federal fraud investigators for enriching the hospital through a kickback scheme, paying “recruiters” $300 a head to bring Medicare patients to Riverside’s six psychiatric clinics.

“They arrived by the van-load for daily therapy sessions they rarely qualified for or received. Medicare picked up the $116 million tab.”

“Kahn ratted out CEO Earnest Gibson III as his co-conspirator. The feds also nabbed Gibson’s 35-year-old son, Earnest IV. He ran one of the psychiatric clinics and was charged with billing nearly $700,000 for care that ‘was not medically necessary and, in some cases, not provided,’ according to prosecutors.”

“Investigators discovered that, since 2005, the hospital had been swindling the feds to the tune of $22 million a year. Kahn pleaded guilty. The two Gibsons and five others await trial on charges of fraud, conspiracy and money laundering.”

Cuban expat Armando Gonzalez started several outpatient psychiatric clinics in Miami with a scheme similar to Riverside’s. “Gonzalez paid assisted-living facilities kickbacks to bus in residents suffering from retardation and dementia. The clinics would then bill Medicare for services the ‘patients’ weren’t eligible for or didn’t receive. By the time the feds started sniffing around in 2008, Gonzalez had already made off with $28 million…He closed shop in Miami, only to reopen in North Carolina. When he was finally arrested last year, Gonzalez was planning to expand into Tennessee.”

In 2010 Frank Walther of the Medicare fraud task force helped take down American Therapeutic, the highest-billing mental-health center in the country. “The company was cycling addicts, alcoholics and Alzheimer patients through its six clinics. Patients’ diagnoses were changed so they would qualify for expensive group therapy.”

In 2011 “Minnesota was pumping up its Medicaid reimbursements to cover losses in a state program that Medicaid doesn’t reach.”

Then there’s the Las Vegas Cocktail, mixing Xanax, Soma and Vicodin for a powerful opiate high. Michigan’s Monroe Pain Center, near the Toledo, Ohio, border, went from seeing 40 patients a day to as many as 250, prescribing 5 million doses of narcotics over two years, defrauding Medicare out of $5.7 million.

New York state centers for people with mental issues were charging the feds $5,000 per day per patient while Arizona only charges $200 a day. New York’s estimated overcharges: $15 billion.

Oh, my! Who’s paying for all this fraud? Medicare and Medicaid are government programs, financed by your tax dollars (and the federal debt.) Can anyone guess why health care costs are so high and continuing to rise?

What shall we do? What do you think? Has your own health insurance cost increased recently? Shall we just let this fraud continue?

These are not purely rhetorical questions. They do have some answers.

You are one of the answers. Contact your local, state and federal officials and representatives; let them know what you think about this situation. Suggest that they find out about all the money wasted on fraudulent and abusive psychiatric mental health care, and recommend that they reduce or eliminate the use of harmful, coercive and abusive psychiatric treatments and psychiatric drugs in favor of non-psychiatric alternatives, so that people with mental trauma can actually be helped rather than harmed.

Forward this newsletter to your family, friends and associates and tell them to subscribe.

More information about psychiatric fraud can be found by clicking here.

By the way, report Medicare fraud here.



It’s in the news today, constantly. What is it, and what should we know about it? What’s all this talk about expanding state Medicaid?

Medicaid is a state and federal partnership providing health coverage for people who qualify. Across the U.S. over 62 million people are enrolled in Medicaid, with a total federal plus state budget of $400 billion per year.

The Center for Medicaid and CHIP Services (CMCS) is one of six Centers within the Centers for Medicare & Medicaid Services, an agency of the U.S. Department of Health and Human Services (HHS). CMCS serves as the focal point for all national program policies and operations related to Medicaid and the Children’s Health Insurance Program (CHIP).

If you don’t have and are unable to afford health insurance, you and your family may qualify for free or low-cost health insurance coverage through Medicaid.

Each state operates its own Medicaid program that provides health coverage for lower-income people, families and children, the elderly, and people with disabilities. The eligibility rules for Medicaid are different for each state.

Enacted in 1965 through amendments to the Social Security Act, Medicaid is a health and long-term care coverage program that is jointly financed by states and the federal government. Each state establishes and administers its own Medicaid program and determines the type, amount, duration, and scope of services covered within broad federal guidelines. States must cover certain mandatory benefits and may choose to provide other optional benefits.

Federal law also requires states to cover certain mandatory eligibility groups, including qualified parents, children, and pregnant women with low income, as well as older adults and people with disabilities with low income. States have the flexibility to cover other optional eligibility groups and set eligibility criteria within the federal standards.

The Affordable Care Act of 2010 creates a new national Medicaid minimum eligibility level that covers most Americans with household income up to 133 percent of the federal poverty level. This new eligibility requirement is effective January 1, 2014, but individual states may choose to expand their Medicaid coverage before this date. For a household of one person, 133% of the current federal poverty level is an annual income of $15,282 (and add $5,347 for each additional person.)

Medicaid is the single largest payer for mental health services in the United States. Examples of provided mental health services include screening, counseling, therapy, medication management, psychiatric services, licensed clinical social work services, peer supports, and substance abuse treatment.

There is a large and active Medicaid fraud culture, both provider and participant fraud, that wastes billions of dollars per year. For example, estimates range between $2 billion and $4 billion in fraudulent psychiatric drug claims per year nationally. Medicaid spends roughly $25 billion per year on prescription drugs.

Some of the more common provider fraud includes: billing for services when no service was provided; billing for a more expensive treatment or service than was actually provided; billing for unnecessary services; billing for the same service multiple times; receipt of kickbacks; excessive compensation for medical directorships or consultancies; physicians referring patients to obtain services from a Medicaid provider whom the physician or physician’s immediate family member has a financial relationship.

Some of the more common participant fraud includes: signing documentation indicating services were provided when not provided; selling prescription medications obtained through the Medicaid program; forging prescriptions to obtain medications; allowing someone other than the card holder to use a Medicaid card; falsifying information to qualify for Medicaid services.

Of course, CCHR supporters will understand that all psychiatric treatments and drugs are harmful and fraudulently prescribed.

Medicaid is an enormous and complex bureaucracy, making it extremely difficult to distill meaningful statistics across all 50 states and the federal government. Diligent research is required to isolate relevant information.

In Missouri, the Medicaid program is known as MO HealthNet. Of the 6 million people in Missouri, over 1 million are Medicaid recipients. Each year, Missouri Medicaid spends over $8 billion to provide health services. Roughly $6 billion is provided by the federal government, and Missouri contributes another $2 billion per year. $600 million goes toward prescription drugs; $43 million goes toward long term mental health care facilities; roughly $500 million goes toward all mental health services, not including drugs.

Missouri offers home- and community-based programs for developmentally disabled adults and children, provided by the Department of Health and Senior Services or the Department of Mental Health. There have been double-digit increases in yearly Medicaid drug spending since 1995. Psychiatric drugs are among Medicaid’s most costly and commonly prescribed drugs. One-third of seniors and people with disabilities enrolled in Missouri’s Medicaid program are prescribed psychotropic drugs.

What do we think about all this? We don’t necessarily think that Medicaid is a bad idea. We do think that expanding Medicaid without also expanding fraud control is a mistake. We think that expanding Medicaid without reducing or eliminating the use of psychiatric treatments and psychiatric drugs is a mistake. We think there are enough non-psychiatric alternatives so that people with mental trauma can actually be helped rather than harmed.

Write your state legislators and let them know what you think about this. More information about psychiatric fraud can be found by clicking here.

By the way, report Medicaid fraud in Missouri to Missouri Medicaid Fraud & Compliance.