Miami Herald - link

Posted on Mon, Mar. 09, 2009

BY JAY WEAVER

In January 2007, Medicare shut down the businesses of 18 medical equipment suppliers in Miami-Dade County after investigators told the federal agency that the companies were shams.

But when Medicare heard their appeals, the operators were quickly reinstated — only to be indicted later that year for submitting more than $10 million in phony claims to the very agency that had let them back in business, court records show.

Medicare wound up paying those suppliers at least $5 million. Despite mostly successful prosecutions, much of that ill-gotten money was never recovered.

”Healthcare fraud in Miami is viral, and these perpetrators replicate it,” said Kirk Ogrosky, deputy chief of healthcare fraud at the Justice Department.

Last fall, the U.S. Department of Health and Human Services’ Office of Inspector General cited the 18 medical equipment suppliers in a critical report concluding that Medicare’s appeals system was flawed because it lacked strict rules of evidence. Medicare officials don’t disagree.

”It’s always troubling when you have 18 reinstated like that,” acknowledged Kimberly Brandt, Medicare’s anti-fraud director. “They may have gotten back in, but they didn’t get back in for a very long time. That doesn’t mean we couldn’t have been more vigilant.”

But nearly six months later, Medicare officials told The Miami Herald they have yet to establish new guidelines that would thwart fraudulent medical equipment operators from regaining billing privileges, as recommended by the inspector general. Brandt said the change in presidential administrations has caused delays.

The Miami Herald, in a public records request, obtained the names of the 18 Miami-Dade medical equipment operators who had filed bogus Medicare bills for respirators, artificial limbs and other healthcare supplies over several years.

Among the offenders: Celso Gonzalez, Iliana Evora Hernandez, Oscar R. Martinez and Rafael Turro, all of Miami-Dade.

By the time federal prosecutors charged the four in September 2007, their two companies — Medwell Equipments Corp. in Doral and R&E Medical Equipment in Miami — had filed almost $2 million in false claims. Medicare had paid them more than $550,000.

The four, who pleaded guilty, fleeced Medicare by stealing physicians’ identification numbers to order supplies that were either medically unnecessary or not provided to patients, court records show.

The providers also acquired fake invoices to support their phony claims for reimbursements and paid kickbacks to patients to use their Medicare numbers for fraudulent billing.

In South Florida, their story is not uncommon.

FRAUD EXPOSED

Last year, The Miami Herald exposed numerous examples of Medicare fraud in a series of stories on the medical equipment industry, HIV infusion clinics and home healthcare agencies — spotlighting not only criminals who scam the system, but also the agency’s lax policy of paying bills without verifying them.

The problem is so widespread in South Florida — at least $2.5 billion in bogus billings a year, experts say — that the region is recognized as the nation’s Medicare fraud capital.

Medicare is a federal health insurance program for the elderly and disabled.

Last week, President Barack Obama, in an address to Congress, said rooting out Medicare fraud will be a priority as lawmakers seek to reform the beleaguered healthcare system.

An example of Medicare’s failings was highlighted in the inspector general’s report released in October. The report said Medicare allowed more than 220 South Florida medical equipment businesses — mostly in Miami-Dade — that had been shut down in January 2007 to reopen after appeals.

Medicare hearing officers restored the firms’ billing privileges even though they had no offices or employees during site visits by Health and Human Services inspectors in late 2006.

HHS Inspector General Daniel R. Levinson said Medicare’s appeals process was flawed because it did not set standards of proof establishing that businesses were real and actually operating.

Some medical equipment operators submitted photographs and licenses while others offered leases and utility bills. Still others offered sworn statements saying their businesses were open on the date of the original site visits.

Ultimately, most of the reinstated companies had their Medicare billing privileges revoked again, later in 2007, after a government contractor sent inspectors to their businesses and found little to no activity.

”Our findings suggest that a more critical review of the types of evidence submitted by suppliers is warranted to ensure that fraudulent suppliers are not reinstated,” Levinson wrote.

In a letter, Medicare’s former acting administrator, Kerry Weems, agreed with him, saying the agency ‘’should consider establishing guidelines” for evidence during appeals.

But Medicare has yet to inform the inspector general of any new standards, according to Don White, a spokesman for Levinson’s office.

Medicare’s flawed appeals system allowed sisters Maria Hernandez and Maivi Rodriguez and their mother, Marta Jimenez, to reopen soon after their operations were shut down in January 2007. They continued to run two Miami-Dade companies, Action Best Medical Supplies and Esmar Medical Equipment, until they were indicted four months later.

The family members, along with a Miami dermatologist, Dr. Ana Caos, were found guilty last May of conspiring to defraud Medicare and filing $620,000 in false claims for aerosol medications.

The physician received $100 kickbacks for each prescription, records show.

At trial, prosecutors showed that the family members also used the same roster of Medicare patients to bill millions of dollars to the government program for unnecessary home healthcare services.

CRIME PATTERN

”If you look at the bios of these perpetrators, what you’ll see is the fraud comes in waves,” said Ogrosky, the Justice Department prosecutor.

Another offender who allegedly scammed Medicare: Idalmes Sansegundo, owner of a Hialeah business, A&K Medical.

In early 2007, Medicare also allowed Sansegundo to reopen her shuttered medical equipment business, which continued to operate until the FBI caught up with her about nine months later.

Sansegundo was charged with filing $4.2 million in false claims with Medicare. The agency paid her company about $1.5 million.

But prosecutors immediately hit a snag in the case. After Sansegundo was granted a bond in Miami federal court, she fled.

The FBI is trying to track down the fugitive, who had lived with her mother in Miami-Dade.

MARCH 13, 2009, 11:42 P.M. ET

Wall Street Journal - link

President Obama laid out his education agenda in a well-received speech this week that had him siding, in the main, with school reformers. He called for higher standards, more charter schools, merit pay, increased accountability and eliminating bad teachers. The question is whether and how Mr. Obama will back up his ambitious rhetoric.

In Washington, D.C., for example, Schools Chancellor Michelle Rhee is at loggerheads with the teachers union over a new contract. Ms. Rhee wants to reward teachers who improve student test scores with higher pay and fire teachers who persistently fail to meet performance benchmarks. Washington is among the nation’s worst-performing school districts, and everyone agrees that an effective teacher can make all the difference.

In his speech, Mr. Obama said that good teachers should be “rewarded with more money for improved student achievement” and that states and school districts should be “taking steps to move bad teachers out of the classroom.” The President added: “I reject a system that rewards failure and protects a person from its consequences.” Does this mean that the Administration will speak up for Ms. Rhee?

The President also lamented that many states limit the number of charter schools “no matter how well they’re preparing our students.” In New York City, Mayor Michael Bloomberg and Schools Chancellor Joel Klein are attempting to persuade lawmakers to renew mayoral control of the schools. The reform has facilitated a five-fold increase in New York charter schools, notwithstanding union opposition. There are currently 23 charter schools in Harlem alone, which is more than existed in the entire system prior to mayoral control.

On a visit to New York City last month, Mr. Obama’s Education Secretary, Arne Duncan, complimented Mr. Bloomberg’s “extraordinary courage” in taking control of the city’s schools. But in the next breath he referred to the head of the teachers union as a “strong, strong voice for reform” and someone who the Administration is eager to work with.

If nothing else, this raises questions about whether the President’s commitment to reform extends beyond lip service. Will he fight for changes even when fellow Democrats and liberal interest groups resist them? Recall, too, that when Mr. Duncan recently spoke in favor of continuing a federally funded D.C. voucher program that allows poor kids to attend private schools, Democrats in Congress ignored his plea. Meanwhile, Mr. Obama remained silent and then signed a spending bill that phases out the program.

The stimulus bill throws an unprecedented $100 billion at the nation’s 14,000 school districts, but it subsidizes the status quo and demands little from recipients in return. The Milwaukee school system is receiving millions of dollars for additional school construction though it has excess capacity and stagnant enrollment. Detroit Public Schools, according to a recent Detroit Free Press story, “stands to reap $530 million — $355 million with no strings attached — from the federal stimulus package that will hand Michigan nearly $7 billion over two or three years. . . . In all, the state and local school districts could have at least $2.5 billion to spend as they see fit.” (Our emphasis.)

Detroit graduates a mere 24% of its students and has a history of corruption. Audits in 2001 and 2004 found $2.5 million missing or misspent, and the city’s schools superintendent was fired in December for incompetence. How does shoveling hundreds of millions of dollars more into such a system advance Mr. Obama’s reform agenda?

The President said his Education Department “will use only one test when deciding what ideas to support with your precious tax dollars: It’s not whether an idea is liberal or conservative, but whether it works.” Voters should hold Mr. Obama to that pledge.

By YARON BROOK

Wall Street Journal - link

March 14, 2009

Ayn Rand died more than a quarter of a century ago, yet her name appears regularly in discussions of our current economic turmoil. Pundits including Rush Limbaugh and Rick Santelli urge listeners to read her books, and her magnum opus, “Atlas Shrugged,” is selling at a faster rate today than at any time during its 51-year history.

There’s a reason. In “Atlas,” Rand tells the story of the U.S. economy crumbling under the weight of crushing government interventions and regulations. Meanwhile, blaming greed and the free market, Washington responds with more controls that only deepen the crisis. Sound familiar?

The novel’s eerily prophetic nature is no coincidence. “If you understand the dominant philosophy of a society,” Rand wrote elsewhere in “Capitalism: The Unknown Ideal,” “you can predict its course.” Economic crises and runaway government power grabs don’t just happen by themselves; they are the product of the philosophical ideas prevalent in a society — particularly its dominant moral ideas.

Why do we accept the budget-busting costs of a welfare state? Because it implements the moral ideal of self-sacrifice to the needy. Why do so few protest the endless regulatory burdens placed on businessmen? Because businessmen are pursuing their self-interest, which we have been taught is dangerous and immoral. Why did the government go on a crusade to promote “affordable housing,” which meant forcing banks to make loans to unqualified home buyers? Because we believe people need to be homeowners, whether or not they can afford to pay for houses.

The message is always the same: “Selfishness is evil; sacrifice for the needs of others is good.” But Rand said this message is wrong — selfishness, rather than being evil, is a virtue. By this she did not mean exploiting others à la Bernie Madoff. Selfishness — that is, concern with one’s genuine, long-range interest — she wrote, required a man to think, to produce, and to prosper by trading with others voluntarily to mutual benefit.

Rand also noted that only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism — and that so long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention — and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.

Rand offered us a way out — to fight for a morality of rational self-interest, and for capitalism, the system which is its expression. And that is the source of her relevance today.

Dr. Brook is president and executive director of the Ayn Rand Institute.

Please add your comments to the Opinion Journal forum.

Posted on Thu, Mar. 12, 2009

BY MYRIAM MARQUEZ

Miami Herald - link to original article

President Obama is rushing to reform healthcare, noting this country spends more than all other industrialized nations, but medical outcomes are no better than most. With more than 40 million people uninsured nationwide, the costs of treating them in emergency rooms is borne by taxpayers and the insured.

One way or another we pay for the broken healthcare system we now have. But no reform will matter if the Obama administration doesn’t pursue fraud with a vengeance.

EPIDEMIC

Medicare and Medicaid fraud are so pervasive in Miami-Dade that the Justice Department’s deputy chief of healthcare fraud, Kirk Ogrosky, calls it “viral.”

Unfortunately, the federal government has been the enabler of this South Florida virus.

As Miami Herald reporter Jay Weaver has detailed in story after story the past two years, scammers are bilking the system out of billions of dollars.

The Justice Department has a South Florida task force aggressively going after sham medical-equipment suppliers at empty storefronts, clinic owners billing millions of dollars for obsolete HIV treatments for patients who get kickbacks instead of therapy, and home-nursing charges for diabetics who never got the care in the first place.

But law enforcement’s biggest enemy in nabbing these crooks may be the federal bureaucracy and Medicare rules that give a wink and a nod to scammers who appeal when fraud is discovered.

In March 2007, the Department of Health and Human Services’ Office of Inspector General found that almost one-third of the 1,581 suppliers in Miami-Dade, Broward and Palm Beach counties were operating with fake storefronts and no-show employees. Medicare revoked the billing privileges of 491 suppliers.

About half of those appealed to Medicare and an astounding 91 percent had their privileges restored.

And guess what?

Two-thirds of those 222 reinstated suppliers have since lost their privileges again after inspectors returned to those businesses and found the same old scams, according to a follow-up report last October. Yet they were billing Medicare for millions of dollars for wheelchairs, respirators or artificial limbs that existed only on phony claims.

FLAWED JUSTICE

In 15 of those cases involving 18 suppliers, there were fraud indictments for scamming at least $5 million in payments from Medicare. Almost all have been convicted and sentenced up to four years. But most of the pilfered money has not been recovered and likely never will.

The Inspector General’s report notes that Medicare’s appeals system is seriously flawed because it doesn’t specify what evidence a supplier needs to have to prove it’s on the up and up. Instead, Medicare hearing officers restored billing privileges based on photographs, leases or utility bills — whatever the companies decided. Doesn’t take a brain surgeon to figure out you can doctor documents.

It’s been six months since the Inspector General’s last report and Medicare has yet to toughen the rules of evidence. Six months, a new president and still nothing. Who knows how many scammers continue to operate because there’s no swift action for real accountability?

In his address to Congress, Obama promised to root out fraud in healthcare. But this isn’t something that needs to be studied to death.

Slap stiffer sentences and tighten the rules. Move swiftly and boldly. Enough already.

Autor: Alvaro Vargas Llosa

Fundación Atlas - enlace

Washington, DC—Varios pesos pesados de la derecha se han unido a la izquierda para pedir una nacionalización temporal de los bancos que están en graves aprietos en los Estados Unidos. Entre ellos se encuentran el ex Presidente de la Reserva Federal Alan Greenspan, el senador republicano Lindsey Graham, el consultor y profesor Nouriel Roubini y el ex Secretario del Tesoro James Baker.

Se equivocan: La nacionalización añadiría a las fechorías de ciertos banqueros el agravante de una expropiación, patearía a los contribuyentes en el estómago y haría de un modo enrevesado y tortuoso lo que el mercado puede hacer rápidamente.

El descalabro del sistema bancario es indudable. Las pérdidas potenciales de los bancos estadounidenses por malos préstamos y títulos valores inservibles representan casi 2 trillones de dólares (trillones en el sentido anglosajón). La respuesta dada por dos gobiernos consecutivos –préstamos, inyecciones de capital y garantías del Estado— no ha despertado confianza. Los mercados saben que los bancos están ocultando el valor de sus activos tóxicos al no venderlos a los precios bajísimos que ofrecen los inversores.

El motivo que se invoca para no permitir que el Citigroup, el Bank of America, Wells Fargo y otros entren en bancarrota es que el crédito debe seguir fluyendo para evitar que la recesión derive en una depresión. Pero ese razonamiento está al revés. El crédito no es el padre sino el hijo de la prosperidad económica. Garet Garrett, el gigante intelectual de la década de 1930, lo resumía de este modo en “A Bubble That Broke the World”, su obra clásica sobre la burbuja crediticia que condujo a la Gran Depresión: “Desde el comienzo del pensamiento económico se ha entendido que la prosperidad se origina en el incremento e intercambio de riqueza y que el crédito es su producto”.

Todos sabemos que en años recientes los estadounidenses vivieron más allá de sus medios, ahorrando muy poco y endeudándose mucho. Si ahora esto se entiende fácilmente, ¿por qué es tan difícil darse cuenta de que una expansión del crédito inducida por el gobierno, en un momento en el que los hogares estadounidenses están por fin procurando cancelar sus deudas y ahorrar para el futuro, sólo servirá para prolongar el problema?

En enero, la tasa anualizada de ahorro de los EE.UU. fue la más alta desde que comenzaron a llevarse registros mensuales en 1959. ¡Eso debería ser motivo de regocijo! Es cierto: las empresas necesitan crédito y consumidores. Pero hay dos maneras de conseguirlos. Una es mediante salvatajes financieros y nacionalizando la banca —y pagando luego un precio catastrófico por ello. La otra es permitiéndole al sistema financiero purgar los bancos insolventes y los activos inservibles, y concediéndoles a los consumidores un poco de tiempo para volver a llenar sus arcas.

Pocas cosas dañan más la reputación del sistema de libre empresa que transferir a los contribuyentes las pérdidas de los banqueros. El modo de resolver esta crisis es permitir que los bancos “zombis” prosigan su camino al infierno, que los bancos que necesitan reestructurarse comiencen a hacerlo y que aquellos que se encuentran en posición de llenar el espacio dejado por las instituciones quebradas lo ocupen cuanto antes. Después de todo, una mayoría de los casi nueve mil bancos estadounidenses, incluidas muchas instituciones financieras regionales, no se abandonaron a la farra crediticia de años recientes: hoy les encantaría aprovechar la ocasión de ampliar sus cuotas en el mercado bancario.

Le pregunté a Michael Rozeff, un experto en finanzas y profesor emérito de la State University of New York, si una solución de mercado interrumpiría el crédito. “Las autoridades federales y estales”, me respondió, “deberían autorizar de inmediato el ingreso de nuevos bancos al mercado. Estos nuevos bancos pueden movilizar las inmensas sumas de dinero actualmente atrapadas en cuentas vinculadas a bonos de corto plazo y letras del Tesoro. Pueden asumir los préstamos para el consumo, incluidos créditos para autos e hipotecas, de los bancos más antiguos. El crédito no se interrumpiría en absoluto”.

Los bancos que se declararan en quiebra serían reestructurados a través de la Corporación Federal de Seguros de los Depósitos Bancarios (FDIC son sus siglas en inglés) a fin de preservar los depósitos del público, garantizados por el Estado. Los acreedores y los distintos bancos solventes absorberían varias de las sucursales y los activos servibles de las instituciones quebradas; los activos devaluados serían vendidos al precio que decidieran los mercados, por bajo que fuese.

Obviamente, al estar en quiebra los accionistas perderían sus bancos y los tenedores de bonos (los acreedores de los bancos quebrados) probablemente recibirían una “poda” porque la prioridad sería proteger los depósitos del público —tal como ocurriría en el caso de una nacionalización, pero sin en el gravoso costo de la intervención estatal.

Aquellos que piden que el Estado pase a adueñarse de los bancos que están en problemas señalan a Suecia como ejemplo de nacionalización bancaria exitosa en la década de 1990. Le pregunté a Fredrik Erixon, el economista sueco que dirige el European Center for International Political Economy, si estaba de acuerdo. “La política sueca”, respondió, “tuvo muy poco que ver con una nacionalización: no más del 15 por ciento del crédito total del país terminó en bancos del Estado”. El gobierno rescató a un banco que ya poseía (Nordbanken) y tan solo adquirió un banco regional (Gota Bank).

Siendo ese el caso, ¿puede señalarse seriamente a Suecia como modelo para una eventual nacionalización del sistema financiero de los Estados Unidos? >/p>

Alvaro Vargas Llosa es Académico Senior del Centro Para la Prosperidad Global en el Independent Institute y editor de “Lessons from the Poor”.

(c) 2009, The Washington Post Writers Group

The Sleight of Hand Behind Obama’s Agenda

By Charles Krauthammer

Washington Post - link to original

Friday, March 6, 2009; A15 

Forget the pork. Forget the waste. Forget the 8,570 earmarks in a bill supported by a president who poses as the scourge of earmarks. Forget the “2 trillion dollars in savings” that “we have already identified,” $1.6 trillion of which President Obama’s budget director later admits is the “savings” of not continuing the surge in Iraq until 2019 — 11 years after George Bush ended it, and eight years after even Bush would have had us out of Iraq completely.

Forget all of this. This is run-of-the-mill budget trickery. True, Obama’s tricks come festooned with strings of zeros tacked onto the end. But that’s a matter of scale, not principle.

All presidents do that. But few undertake the kind of brazen deception at the heart of Obama’s radically transformative economic plan, a rhetorical sleight of hand so smoothly offered that few noticed.

The logic of Obama’s address to Congress went like this:

“Our economy did not fall into decline overnight,” he averred. Indeed, it all began before the housing crisis. What did we do wrong? We are paying for past sins in three principal areas: energy, health care and education — importing too much oil and not finding new sources of energy (as in the Arctic National Wildlife Refuge and the Outer Continental Shelf?), not reforming health care, and tolerating too many bad schools.

The “day of reckoning” has arrived. And because “it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament,” Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.

Amazing. As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people.

At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the banking industry. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan’s Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful home buyers.

The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe.

And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing-in, Obama has yet to unveil a plan to deal with the banking crisis.

What’s going on? “You never want a serious crisis to go to waste,” said chief of staff Rahm Emanuel. “This crisis provides the opportunity for us to do things that you could not do before.”

Things. Now we know what they are. The markets’ recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions — the sense of crisis bordering on fear-itself panic — for enacting his “Big Bang” agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.

Clever politics, but intellectually dishonest to the core. Health, education and energy — worthy and weighty as they may be — are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime.

letters@charleskrauthammer.com