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Corrupt Government Title: Government Health-Care Fraud Sweep Nets 111 A health-care crime sweep Thursday morning netted 111 defendants on charges related to Medicare fraud, in what Attorney General Eric Holder called the largest such takedown in U.S. history. The defendants—charged in nine metropolitan areas including Los Angeles, Brooklyn, Chicago and Miami—were allegedly involved in more than 40 schemes, almost all of which were unrelated to one another, officials said. Altogether, the schemes attempted to defraud the government of more than $225 million, according to Mr. Holder. Several of the cases appear to involve doctors or other health-care practitioners acting alone or with very few alleged co-conspirators. One of these, Brooklyn physical therapist Aleksandr Kharkover, had been featured in a December Wall Street Journal article on possible financial abuse involving physical therapy, a growing area of Medicare fraud. Mr. Kharkover, accused of being involved in at least three separate alleged physical-therapy rings broken up this morning, billed Medicare about $11.9 million from January 2005 through July 2010, according to the indictment. During that time period, Medicare paid out $7.3 million, according to a person familiar with the investigation. He is accused of having billed for physical-therapy services that were never performed and weren't medically necessary. Mr. Kharkover's lawyer, Montell Figgins, said his client "looks forward to his day in court where he'll be able to set the record straight. Mr. Kharkover is a good man and a well-respected doctor." The publisher of The Wall Street Journal, Dow Jones & Co., filed court papers last month to overturn a court injunction that blocks the public from seeing the Medicare billing records of individual doctors. In 1979, the American Medical Association won a suit against the government to keep secret the amounts of money individual doctors get paid by Medicare. The AMA argued that releasing the information would violate physicians' rights to privacy. The court's ruling still stands. The Journal suit was filed on the grounds that releasing the records would enable state medical boards, nonprofit organizations, universities and newspapers to act as watchdogs over the $500 billion Medicare program. "The fact that you can have an operation this large with cases that aren't connected shows the extent of the problem," said a senior law-enforcement official involved in these investigations. Medicare fraud is "so rampant," he said, "there's no way in hell you can prosecute your way out of this problem, no way. The answer is not prosecution—the answer is more effective monitoring of the money that goes out." The arrests were announced in Washington by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The investigations were carried out by the Medicare Fraud Strike Force—a multiagency effort led by the HHS Office of the Inspector General, the Federal Bureau of investigation, and U.S. attorneys from the Department of Justice—that target Medicare and Medicaid fraud. More than 700 state, federal and local agents were involved in the cases, said Mr. Holder, who also announced that the Strike Force was expanding operations to nine cities from seven. "Prosecution is important after the fact," Ms. Sebelius said. "What we'd like to do is also set up much higher firewalls before the fact and actually stop this money from going out the door." She said the health-care overhaul passed last year gives the government new tools to detect fraud, and the president's budget proposal includes new support for fraud-prevention efforts. She said the agency was again credentialing some providers, setting up new checks to screen providers before they are accepted into the system, and building data systems that gather all of the billing information into one place, "which has never been available before." The alleged schemes varied widely. Two rings—one in Miami and another in Dallas—allegedly paid kickbacks and bribes to Medicare beneficiaries to induce them to purport to have received home-health services that weren't medically necessary and not performed, according to indictments. In the Dallas area, one Ollie Futrell was taped allegedly negotiating with Medicare beneficiaries on how much of a kickback they would receive for accepting unnecessary home-health services, and how much they would receive for referring new patients into the scheme, according to the indictment. Here is one alleged exchange in the indictment: Beneficiary: "Each person I refer to you is $200 or $250?" Furtrell: "I'm going to be honest with you. I will give you $150. Alright $250, $200. [Expletive] I ain't goin fifty 'cause I got to have something now, come on." The Dallas scheme billed Medicare a bit more than $1 million from November 2008 through November 2010, while the Miami ring billed Medicare almost $25 million and were paid more than $16 million from January 2006 through March 2009, according to the indictments. Lawyers for Ms. Futrell and the other defendants in the Miami and Dallas cases couldn't immediately be reached for comment. A podiatrist in the Detroit area, Errol Sherman, is charged with billing for toenail removals that never happened—in one case allegedly billing for 18 of the painful procedures for a single patient. At least three patients for whom Dr. Sherman allegedly billed for toenail removal, called avulsion, said they only received foot soakings and, in some cases, nail trimmings, according to a person familiar with the case. Dr. Sherman's lawyer, Mark Kriger, said he didn't think it appropriate to comment on pending cases but said his client had entered a plea of not guilty, "which speaks for itself." Brooklyn proctologist Boris Sachakov was indicted for what fraud experts call "unbundling," a term for breaking what should be a single group of charges into many single charges, which makes more money. Dr. Sachakov allegedly performed many hemorrhoid removals, billing office visits and subsequent hemorrhoid surgeries as if they were distinct conditions unrelated to the initial procedure. According to the indictment, from January 2008 through January 2010, Dr. Sachacov billed through his company more than $6.5 million to Medicare and more than $16 million to private insurers; Medicare paid out just less than $4.5 million and the private insurers about $5.8 million. Calls to Mr. Sachakov's lawyers weren't immediately returned. In September 2010 he was charged on similar charges—including billing for 85 hemorrhoid removals on one patient—and in press accounts at the time his lawyers said he denied wrongdoing. Brooklyn was home to the single largest alleged scheme, a physical-therapy ring that billed Medicare almost $57 million from February 2008 through the present, according to the indictment. A person familiar with the case said that Medicare paid more than $30 million during that time. Seven people were arrested in connection with that alleged fraud, which law-enforcement officials said was run mainly out three clinics and two medical-transport companies in Brooklyn. Lawyers for the defendants and the company couldn't be reached. In Houston, chiropractor Justina Okehie Collins was charged in another alleged physical-therapy scam, which billed Medicare about $4.7 million, according to a law-enforcement official familiar with that case. Ms. Collins's lawyer couldn't be reached for comment. The Journal has been mining Medicare claims data to expose waste, abuse and potential fraud. Together with the nonprofit Center for Public Integrity, the Journal obtained from the government a database that covered claims for a 5% sample of randomly selected beneficiaries. In that database, proctologist Dr. Sachakov was by far the top earning colon and rectal surgeon in the country for 2008. Mr. Kharkover, the Brooklyn physical therapist arrested this morning, stood out as one of the highest-earning physical therapists in that year. The Journal learned from a person familiar with his business that Mr. Kharkover had billed Medicare more than $2.5 million in 2008 and earned at least $1.8 million that year. In an interview in his Brooklyn bungalow last year, Mr. Kharkover was asked if billing $2.5 million in 2008 fit with his records. "I'd say that fits," he replied. His attorney, Mr. Figgins, said at the time that Mr. Kharkover was a "successful businessman," adding that "there is no reason to believe my client was doing anything illegal." Today he said, "An indictment is nothing more than mere unproven allegations." Mr. Kharkover came to the attention of law enforcement at least as early as mid-2009, and the investigation began in earnest in about August 2010, according to law-enforcement officials. Despite the number of small rings in Thursday's sweep, FBI Executive Assistant Director Shawn Henry said the agency has increasingly seen organized-crime groups move into health-care fraud "because of its profitability." He said recruiters target low-income areas and soup kitchens to find new patients.
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