A 199-count indictment against 23 doctors, nurses, and medical supply companies was unsealed in Brooklyn, NY yesterday, revealing a massive scheme to defraud Medicare and Medicaid of millions of dollars.

Hundreds of poor people were recruited with the promise of new sneakers to visit a couple of clinics in the Bronx, where bogus tests and procedures were performed.  The criminals would then bill government insurance programs for millions.

Wall Street Journal:

Brooklyn District Attorney Kenneth Thompson identified Eric Vainer, a 43-year-old Manhattan resident, and his mother, Polina Vainer, of Staten Island, as the leaders of what his office referred to as the “Sneakers Case” and a “Medicaid mill.”

The Vainers are accused of directing recruiters to low-income neighborhoods and bringing patients to five medical centers in the Bronx and Brooklyn, where they received a battery of medical tests, including cursory foot exams, pain-management evaluations and cardiograms.

Neither of the Vainers could be reached for comment Tuesday. Mr. Vainer was arrested early Tuesday in Florida, Mr. Thompson said. A spokesman for his office said Ms. Vainer is also under arrest and that no lawyers had been named.

There was no answer at the two medical-supply companies and management company named in the indictment, which are affiliated with the Vainers. According to the indictment, many of the patients were left with unnecessary devices supplied by the Vainers’ medical-supply companies.

Prosecutors said the Vainers submitted the bills to Medicaid, Medicaid managed-care providers and Medicare, sometimes receiving kickbacks from providers while other times splitting insurance proceeds with them.

“This was all done under the guise of medical treatment, just to defraud Medicaid and Medicare,” Mr. Thompson said. “These defendants exploited poor people to make money.”

Mr. Vainer and the other defendants face an array of charges, including enterprise corruption, money laundering, health-care fraud, grand larceny and falsifying business records.

“Health-care fraud compromises the integrity of the Medicaid program as well as the health-care delivery system, and it wastes taxpayer dollars,” said Dennis Rosen, the state’s acting Medicaid inspector general.

Tens of billions of dollars are being lost by Medicare to waste and fraud, according to a report by the Government Accountability Office.  In 2013, the state of Illinois conducted an audit of its Medicaid program, and what it found was astonishing:

In January, the Illinois Department of Healthcare and Family Services, or HFS, began a new project verifying eligibility for Illinois’ 2.7 million Medicaid enrollees. For years, state workers had failed to take adequate steps to ensure the people receiving Medicaid benefits were actually eligible for the program. As an Auditor General report noted, state workers failed to verify basic eligibility criteria, such as income, residency and citizenship status. Worse yet, some of the annual eligibility checks had been delayed for more than five years.

So state lawmakers pushed HFS to hire an independent vendor who specializes in this kind of work to review Medicaid eligibility. Since January, the independent vendor has reviewed nearly 419,000 case files of individuals currently enrolled in Medicaid. Of those, the vendor identified more than 210,000 that were ineligible for benefits, which amounts to more than 50 percent of all cases reviewed so far. Another 47,000 cases reviewed so far this year were eligible for some benefits, but enrolled in the wrong program. For example, some individuals enrolled in Medicaid may only qualify for programs with greater cost-sharing. Overall, the review has yielded an eligibility error rate of more than 61 percent.

A separate review discovered 8,000 dead people collecting more than $12 million in benefits.  And this is just one state. 

Crooked doctors, lazy bureaucrats, incompetent managers are all part of the problem.  In the case of Medicaid, we just dumped another 8-9 million Americans on this dysfunctional program through its expansion under Obamacare.  You can bet that there are more cases like this one out there, bilking taxpayers out of  billions of dollars.