Staggering Rise in Catheter Bills Suggests Medicare Scam

Linda Hennis was checking her Medicare assertion in January when she observed one thing unusual: It mentioned an organization she had by no means heard of had been paid about $12,000 for sending her 2,000 urinary catheters.

But she had by no means wanted, or obtained, any catheters.

Ms. Hennis, a retired nurse who lives in a suburb of Chicago, observed that the corporate promoting the plastic tubes was referred to as Pretty in Pink Boutique, and it was based mostly in Texas. “There’s a mistake here,” Ms. Hennis recalled considering.

She is amongst greater than 450,000 Medicare beneficiaries whose accounts have been billed for urinary catheters in 2023, up from about 50,000 in earlier years, in accordance with a brand new report produced by the National Association of Accountable Care Organizations, an advocacy group that represents a whole bunch of health care methods throughout the nation. The report used a federal database of Medicare claims that’s accessible to researchers.

The huge uptick in billing for catheters included $2 billion charged by seven high-volume suppliers, in accordance with that evaluation, probably accounting for almost one-fifth of all Medicare spending on medical provides in 2023. Doctors, state insurance coverage departments and health care teams across the nation mentioned the spike in claims for catheters that have been by no means delivered instructed a far-reaching Medicare rip-off.

“We think it’s outrageous,” mentioned Clif Gaus, govt director of the group that carried out the evaluation.

Dara Corrigan, who runs Medicare’s Center for Program Integrity, declined to say whether or not the company was investigating the catheter billings. When the federal authorities suspects fraud, she mentioned, it generally holds funds in escrow whereas it critiques the claims. But she wouldn’t say whether or not that had occurred for any of the catheter funds.

“We’re doing all this behind the scenes to ensure the integrity of the investigation,” Ms. Corrigan mentioned, talking usually in regards to the company’s course of. She described Medicare billing scams as “one of these problems that is ever-present and ever frustrating.”

Pretty in Pink Boutique, which billed Medicare a minimum of $267 million for catheters between October 2022 and December 2023, couldn’t be reached by cellphone.

Medicare billing scams can have wide-reaching penalties. Even if sufferers don’t pay the payments themselves, extra spending by the federal government insurance coverage program can enhance the premiums paid by enrollees in the longer term.

Catheters and different medical provides are frequent targets of billing schemes. Last April, the federal authorities introduced criminal charges in opposition to 18 defendants who had submitted payments for nonexistent coronavirus exams and different pandemic-related companies. And in 2019, the Department of Justice mentioned it had broken up a global fraud ring involving greater than $1 billion in phony billing for again and knee braces.

Medical provide corporations are straightforward to arrange and have a comparatively low bar for proving medical necessity. The corporations “don’t need much to show why grandma needs a urinary catheter,” mentioned Eva Gunasekera, who beforehand led health care fraud investigations on the Department of Justice.

Patients and medical doctors who’ve been reporting mysterious catheter claims to Medicare for months say they’re annoyed by an absence of communication from the federal government about whether or not billions of {dollars} have been misplaced to an ongoing billing rip-off.

One of the advocacy group’s members, Dr. Bob Rauner, runs a big community of medical doctors in Nebraska. In an interview, he mentioned his sufferers had been collectively billed almost $2 million in 2023 for phantom catheters. (He tracks such spending as a result of his group will get bonus funds from Medicare when sufferers have good health outcomes with low general medical spending.)

“I just know that it’s all fraud because our doctor didn’t order it and our patient never got it,” mentioned Dr. Rauner, who filed a criticism with the federal health division’s Office of Inspector General in mid-December.

The overwhelming majority of the suspicious claims recognized by the brand new evaluation got here from seven corporations, a lot of which have shared executives, in accordance with public paperwork and the advocacy group’s report. Only one of many companies had a working cellphone quantity, and it didn’t return a request for remark. The different numbers have been both disconnected, went to totally different companies or, in one case, went to a earlier proprietor.

Pretty in Pink Boutique is registered with Medicare to a road handle of a home in El Paso. Its cellphone quantity goes to an auto body store referred to as West Texas Body and Paint, the place an worker who answered a name from a reporter mentioned the store receives “calls all day, every day” from Medicare enrollees involved about fraudulent payments.

Pamela Ludwig runs an unrelated enterprise in Nashville that can also be referred to as Pretty in Pink Boutique. She has obtained so many catheter complaints that she added a page to her web site explaining that her enterprise was not a part of any rip-off.

“I have people calling me, cussing, screaming,” Ms. Ludwig mentioned. “They feel violated.”

She referred to as in a criticism to Medicare in September, she mentioned, however the barrage of cellphone calls has not stopped. In November, her husband heard from a New York City banker, who mentioned a number of males had come to his workplace asking to arrange an account for Pretty in Pink Boutique. “He asked if we had recently sold our business,” Ms. Ludwig mentioned.

The problem landed on the radar of the Oklahoma Insurance Department in July, when it was investigating fraudulent Medicare claims for Covid-19 testing kits. The officers observed a surprisingly high variety of claims for catheters as properly.

“When we started asking seniors, they told us they had never used urinary catheters and didn’t know why the claims were there,” mentioned Ray Walker, the division’s Medicare help director. Since then, he estimates that a minimum of 70 Medicare beneficiaries have filed complaints about catheter claims, one as just lately as this week.

In Illinois, Travis Trumitch mentioned he reported 4 circumstances of potential catheter fraud to the federal health division’s inspector basic after his group, the Illinois Senior Medicare Patrol, fielded greater than a dozen calls from Medicare beneficiaries. The group is a part of a nationwide community that warns older adults about federal health insurance coverage scams.

It’s unclear how the catheter corporations obtained the Medicare accounts of so many individuals, however Mr. Trumitch mentioned some folks instructed him that they had beforehand obtained cellphone calls asking them for his or her Medicare identification quantity. Others mentioned that they had not obtained any calls, however suspected that their names have been obtained via knowledge breaches.

Suzanne Gustafson, 76, complained to Medicare final month after she observed a suspicious fee of about $4,000 made to an organization in New York. She noticed an identical cost on her husband’s account, too. And when she posted to Facebook, desirous to unfold consciousness, one other pal reached out, saying she had been hit with an identical cost.

Ms. Gustafson speculated that the corporate might have obtained her Medicare data from a data breach at a hospital she had gone to in Louisville, Ky. This wasn’t Ms. Gustafson’s first encounter with suspicious Medicare payments: Last yr, she mentioned, she was falsely billed for coronavirus exams she by no means ordered or obtained.

Ms. Hennis mentioned she doesn’t know the way her data reached the Pretty in Pink Boutique. When she reported the inappropriate billing to Medicare, she mentioned, she was instructed that somebody had created a second Medicare account in her title and billed the catheters to the brand new account.

“I hate the notion of anybody ripping off Medicare,” she mentioned. “So many of us rely on it. It’s just plain ethically wrong.”

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