Swindles, waste swell medical costs

June 21--Kari Richards of Latrobe visited more than 100 hospitals in 11 states, claiming injuries that netted her fraudulent prescriptions for painkillers worth $600,000, police allege.

The case is one of the latest examples of an estimated $90 billion to $300 billion a year nationally in health care spending that's lost to fraud -- a crime that's garnering greater attention from law enforcement agencies and health insurers as they look for ways to rein in runaway health care spending.

"We're spending $3 trillion a year on health care. There are estimates that 3 to 10 percent is lost to fraud," said Louis Saccoccio, CEO of the National Health Care Anti-Fraud Association, a Washington-based public-private organization of health insurers and law enforcement agencies.

"It's an enormous cost for taxpayers and in (private insurance) premiums," Saccoccio said.

The crackdown on health care fraud is happening at the local, state and federal levels.

In the last week, law enforcement agencies have announced several other cases, including the arrest of Kelli Ann McCabe, a Washington County home care worker, who authorities said submitted fake time sheets to Medicaid to gain more than $2,000. And charges against 243 people in multiple states in schemes that bilked Medicare out of $712 million -- the largest health care-related fraud sweep in the Justice Department's history.

Highmark Inc., Pennsylvania's largest health insurer, is using data-mining technology to root out fraud in claims, said Kurt Spear, vice president of financial investigations. Spear's team is on track to find $115 million in fraud, waste and abuse this year, up from $100 million last year.

The case of Richards, 28, indicted by a federal grand jury in Pittsburgh on June 9, was discovered by Spear and his investigators.

"One of Highmark's key initiatives in response to the national prescription drug epidemic (is to) look for high patterns of pharmacy utilization ... and determine if we think these people are doctor-shopping," he said.

Highmark referred 24 cases of suspected fraud to law enforcement agencies last year, resulting in 14 indictments, spokesman Aaron Billger said.

UPMC Health Plan has beefed up an investigative unit "that conducts sophisticated data analysis and clinical reviews, resulting in millions of dollars saved," the insurer said in a written statement.

"We've identified cases from both Highmark and UPMC that they brought to our attention in the last six months," U.S. Attorney David Hickton said. "We are trying to up our game on health care fraud. We are putting more staffing on it and doing more data-mining."

McCabe was arrested and charged this month with Medicaid fraud for submitting time sheets for home care services she said she provided to a patient, who was in a hospital at the time, according to Attorney General Kathleen Kane.

The Attorney General's Office has stepped up its investigations of Medicaid fraud, resulting in 55 arrests this year, a 62 percent increase over the number of arrests at the same point last year, said Chuck Ardo, Kane's spokesman.

"We have rebuilt staff that deals with Medicaid fraud back to a level not seen since 2003," Ardo said. "Part of the reasoning for that is, there's been a startling increase in Medicaid fraud cases."

The Pennsylvania Insurance Fraud Prevention Authority reports an uptick in activity. The state agency referred 59 suspected cases of health care fraud from health insurers to law enforcement agencies last year, up 23 percent from 2013, said Thomas Donahue, the authority's executive director.

"The biggest thing we see is prescription fraud," he said. "People are addicted to painkillers and they come up with fraudulent injuries."

An estimated 52 million Americans older than 12 have used prescription drugs non-medically in their lifetimes, the National Institute on Drug Abuse says. And more than 8 million Americans in 2010 were considered prescription drug abusers, the last year for which data are available.

At the federal level, Attorney General Loretta Lynch and Sylvia Burwell, secretary of the Department of Health and Human Services, said last week that authorities busted a range of Medicare-related fraud crimes -- from kickbacks to money laundering and identity theft -- involving home health services, physical therapy, medical equipment providers and pharmacies.

"The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners and others," Lynch said. "They billed for equipment that wasn't provided, for care that wasn't needed, and for services that weren't rendered."

Between 2009 and 2013, federal authorities recovered more than $25.9 billion in a crackdown on health care fraud. In the previous five years, from 2004 through 2007, they recovered $9.4 billion.

"Everyone is paying taxes for that," Saccoccio said. "That's something that's coming out of your pocket."

Alex Nixon is a Trib Total Media staff writer.

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