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South Florida — Ground Zero for Medicare Part D Fraud

South Florida is ground zero for Medicare fraud. Again.

This time it’s Medicare Part D fraud. Medicare Part D went into effect in 2006 as a means of providing prescription drug coverage to Medicare beneficiaries. Medicare Part D works as follows. Private insurance companies agree to become Part D drug plan sponsors. Medicare beneficiaries then become insureds with the private company. When a beneficiary needs a prescription drug, he or she obtains the drug through a pharmacy in the normal way, with the insurance company paying the bill. The Government then reimburses the insurance company through a complicated formula.

According to the Department of Justice, Medicare Part D is the fastest growing area of the Medicare program. Last year, the Government spent more than $120 billion on Medicare Part D coverage. The Government estimates that as much as $10 billion of last year’s expenditures were fraudulent.

As part of a crackdown in South Florida, the Department of Justice, the Federal Bureau of Investigation, and the Department of Health and Human Services – Office of Inspector General recently announced the indictments for 25 Miami-area Defendants charged in criminal schemes to defraud Medicare Part D. The DOJ press release can be found here.

Fraudulent pharmacies are frequently at the center of Medicare Part D scams. Common schemes include the following:

Kickbacks to Doctors. A pharmacy cannot fill a prescription without a valid prescription from a doctor. Unfortunately, many doctors are willing to sign prescriptions in exchange for a kickback.

Kickbacks to Patients. Fraudsters will even pay patients a kickback to apply for and receive medications they do not need. Because the Government, not the patient, pays the bill, the patients simply do not care and will throw the medication in the trash.

Recruiters. Bogus pharmacies will contract with “recruiters” to gather patients willing to receive bogus prescriptions. These recruiters go into neighborhoods and find Medicare beneficiaries willing to receive kickbacks in exchange for bogus medical prescriptions.

Drugs not Delivered. In some cases, a pharmacy will bill for a drug that was never even delivered. Again, the patient does not complain because he or she has received a kickback.

Diverted or Gray Market Drugs. Other times, a pharmacy will send diverted or gray market drugs to the customer. As an example, pharmacy may obtain medication purchased overseas at cheaper rate and then import the medication back into the United States for re-sale. These practices are extremely dangerous because the medication contains different labeling and may not be the same as medication approved in the United States.

If you know about Medicare Part D fraud, contact one of our lawyers for a free consultation. You may become whistleblower entitled to receive a portion of any recovery made by the United States.

Ryan McCabe is a former federal prosecutor who previously received the Health and Human Services Integrity Award for the successful prosecution of healthcare fraud in South Florida.

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