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Two Florida Business Men–Medicare Fraud For Billing for Penis Pumps for Female and Male Patients–Lot of Transaction

Posted Sep 10 2010 11:54am

Ok we have all these anti-fraud software companies, some are subsidiaries of image insurance companies that are supposed to be checking for this type of fraud, but the problem here lies with cutting profitable revenue in catching fraud.  In other words is it time to catch these folks and cut off the stream of revenue generated for providing this service?  If a company is in this business for a profit where’s the incentive to catch fraud?  It doesn’t appear to be a priority and thus we come back to relying on law agencies of the government to really police this. image

In this case it was the FBI that found these folks.  Again money talks and fools walk when it comes to profits.  The FBI had to report this to the Medicare Anti Fraud contractor!   I did a little looking around here to trace back where some of the auditing comes from.  SafeGuard Services, LLC the Medicare Contractor works with another partner, IntegriGuard LLC.

IntegriGuard, LLC, is wholly owned subsidiary of HMS Holdings Corp. (NASDAQ:HMSY), right a company traded on the stock market.  Correct me if I am wrong but we have circled back around to a company that works with insurers and gets those nice transaction fees that create profit so again unless we have US law agencies involved I don’t see where we can really obtain a full scrutinized effort here in fighting fraud.  image I call this subsidiary watch as now more than ever with mergers and acquisitions you may not be dealing the same old company with the same old interests and business models.  All subsidiaries contribute to company bottom profits. 

“HMS provides a variety of coordination of benefit, program integrity, and other cost containment solutions to healthcare payors nationwide. Clients benefiting from our value-added services range from Medicaid and child support agencies to the Centers for Medicare & Medicaid Services to HMOs and managed care organizations. In addition, we have a suite of services for self-insured employers”.

Also in the news today relating to fraud, we have a woman pleading guilty to 23 million dollars worth of fraud with bogus HIV claims.  image

How will these companies really enforce stopping fraud when the levels of profits from transaction fees and software use are so lucrative, I think we have a problem Houston.  If too many fraud dollars go away, so go some of the profits and available dividends paid to investors.  BD

It's one thing that a pair of Hialeah companies were fraudulently billing Medicare for penis pumps at $395 a pop to supposedly help male patients combat impotence.

It's quite another that Charlie RX and Happy Trips also billed the federal healthcare program for vacuum erection systems to aid female patients battle erectile dysfunction, authorities say.

And what's even more remarkable: Medicare paid the two medical equipment providers $28,600 after they submitted a total of $63,000 in false claims for the erection pumps, according to charges unsealed Monday in federal court in Miami.

Hernandez's company, Happy Trips, submitted $1,188,956 in false claims for inhalation drugs and other medical services, including $22,000 for the erection systems, officials say. Medicare paid his business $364,120, including $4,600 for those systems.

Earlier this year, Medicare shut down payments to both companies after FBI agents discovered a spike in billing activity and reported it to the agency's anti-fraud contractor, Safeguard Services.

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