Medicare Scammers Steal $60 Billion a Year. This Man Is Hunting Them | WIRED
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John Mininno combines analytics and gumshoe work to find potential whistle-blowers.JO?O CANZIANI
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John Mininno slaps two pieces of paper onto an overhead projector. “Look at this,” he says. “You see how one form is a photocopy of the other—with just the date changed? It’s exactly the same paper!” The printouts are mere insurance forms, but Mininno is genuinely pissed off about them. “They’re allowed to bill for that procedure again six months after they first provide it. That date is six months to the day!”
Not everyone can get this worked up about insurance forms. But to Mininno, these are a combination of smoking gun and a slap in the face. Together they clearly show that someone is ripping off Medicare. But perhaps what’s worse is that someone is being really lazy about it.
If Willie Sutton had to choose a criminal career today, he’d be ripping off Medicare too. As the bank robber supposedly said: That’s where the money is. The program spends more than $600 billion a year on health care for 54 million people, most of them seniors. It is a massive pool of underguarded funds ripe for skimming. By the government’s own accounting, fraudsters scammed $60 billion from Medicare in 2014, and the losses are growing. Since 2007 more than 2,300 health care providers have been charged with fleecing Medicare, and more than 1,800 defendants have been convicted of felony offenses, ranging from claiming phantom services to performing unnecessary surgeries.
Finding a whistle-blower requires a nose for mischief, a gift for persuasion, and the technical chops to identify patterns in thickets of diagnostic codes and billing data.
Scams are run so often, by so many people, that dedicated government investigators can’t keep up: In 2014 prosecutions initiated by the government led to a mere 31 settlements yielding $88 million in fines. Luckily, there is another defense against Medicare fraud: whistle-blower lawsuits. Under the federal government’s false claims statute, any insider can sue a company that’s providing fraudulent services, on the government’s behalf. If the whistle-blower lawyers are successful, the plaintiffs collect 15 to 30 percent of the settlement as a bounty. In 2014 there were 469 of these health care fraud settlements—many involving huge pharmaceutical corporations and hospital networks—resulting in $2.2 billion in fines.
The problem is that even with this financial incentive, whistle-blowers can be skittish about coming forward and often are ill-prepared to present solid evidence. “When a whistle-blower goes to the government by himself,” says Patrick Burns, an antifraud activist in Washington, DC, “the whistle-blower is disorganized. They’re hot, and they don’t stick to just the facts. He’s pissed off because he was fired, and when angry people call you up, you just assume, ‘Crazy loser, you’re a nut job.’”
Professional whistle-blower lawyers are much better at arguing a convincing case. But lawyers aren’t always the best investigators. Sometimes finding an insider requires a nose for mischief, a gift for persuasion, and the technical chops to identify nonobvious patterns in impenetrable thickets of diagnostic codes and billing data. Sometimes it takes a bounty hunter. Someone like John Mininno.
A broad-shouldered former college linebacker who speaks in the blue-collar brogue of central New Jersey, Mininno is an unlikely big-data entrepreneur. After working his way through law school, he spent 18 years representing victims of medical negligence. What he saw made him angry. “I had a wrongful death case, a woman who went into a nursing home for rehab on a hip fracture,” he says. While under the facility’s care, the woman suffered a host of injuries, from a fractured tibia and ankle to severe pressure sores. Mininno argued in court that her death was preventable, had anyone simply repositioned her from time to time. “They put her in a room, they billed her insurance, and they didn’t pay attention to her. It became clear to me that these were large corporations trying to monetize people’s insurance. It’s disgusting.”
Over the years, Mininno developed a reputation as a lawyer who knew how to find evidence of fraud in billing patterns, and in 2011 he was approached by a financier who needed help vetting some investments in health care companies. Were these companies really profitable, or were they padding their financials with fake Medicare billings? He asked Mininno to shine a light and see if any cockroaches scurried out of those company records.
Around this time, a mountain of information on health care providers was becoming publicly available. In response to a Freedom of Information Act verdict, the Centers for Medicare and Medicaid Services (CMS) released data on tens of thousands of medical practices. It was a detailed catalog of all the procedures those practices provide to seniors and what they’re paid to provide them. At the same time, various citizen journalists and data scientists were using Freedom of Information Act requests to get CMS data on physician referrals, which they assembled into a map of doctors who refer patients to each other—a network with 50 million connections—and the prescribing patterns of those doctors.
As a lawyer, Mininno looked at this trove and thought, “This is a massive business opportunity.” Whistle-blower law firms have to advertise, because they need informants to come out of the woodwork. Then they need to qualify those sources—do they have enough evidence? Then they have to figure out whether the scale of the fraud (and thus the likely payout) justifies the work they’ll have to plow into it, because they don’t get paid unless they win. This is time-consuming and expensive.
From his days as a lawyer and his work looking through company medical records, Mininno knew what kind of footprints to look for in the data: what the scams are and how those scams are coded up for reimbursement. Without this knowledge, algorithms will churn up thousands of false positives. For example, you can’t look at just medical practices that administer high volumes of pricey medications—there are doctors who legitimately administer extremely expensive injectable drugs, like chemotherapy, in their offices. There are clinics in areas where patients are sicker, and therefore more expensive to care for, than the general population. In other words, there are plenty of legitimate reasons for outliers to be outliers.
People skip doctor visits during heavy snowstorms, so insurance claims should drop in bad weather.
Fraudsters aren’t necessarily the biggest billers—it’s a bit of a myth that fraud lives at the end of a bell curve. But they do have some distinctive ways of doing business, if you know what to look for. Mininno realized he could build a business around using data to find certain patterns, identify likely informants (usually former employees), and turn them into false-claims plaintiffs. He didn’t have to wait for whistle-blowers to walk through his door—or advertise like the big whistle-blower law firms. He could use analytics to troll for sketchy providers and insiders, transforming that rare, long-odds game into a quantitative, target-rich discovery process with gumshoe work on the back end. Mininno pitched the idea to his Wall Street client, who became his angel investor. The National Healthcare Analysis Group was born.
If you’re hunting for a big-game trophy, the first thing you’ve got to do is eliminate the targets that have already been tagged—only the first plaintiff to file gets a payout. So Mininno designed a system for combing through SEC filings to eliminate health care organizations that were already being investigated.
To identify potential informants, his developers assembled a database of 70,000 health care workers and their employment histories, scraped and extracted from publicly available sources. The ideal informants are well-qualified nurses who worked for a suspicious clinic, but only for a few months, then immediately got another job. They were obviously good employees, but something they saw on the job likely made them leave. Mininno cold-calls them. “For the most part,” he says, “people are open and honest and want to tell their story.”
To wrangle Medicare billing data, he became the first paying customer of a Portland, Oregon, startup called Carevoyance, which had cross-linked dozens of databases to identify referral networks. If a practice has been investigated, it’s worth knowing who sends them patients, or vice versa.
To catch a crook, it helps to think like a crook. And crooks cut corners. Sometimes, they’re too cheap to resolve contradictions between their Medicare claims and what they tell state tax authorities. So when Mininno sees a practice where, according to Medicare records, nurses never miss a day’s work, he pulls unemployment claims. Because when aides are laid off, they file for unemployment. But their bosses, who’ve been billing for the services of these never-absent, superproductive health workers, try to duck unemployment claims by asserting they were fired for not showing up for work. The billing data, which shows indefatigable employees, and the employers’ claim that these same nurses were absent and unproductive can’t both be right. Such a practice is a likely candidate for investigation. There are ways, Mininno says, to “poke holes in the perfect paperwork and the perfect data.”
But data, algorithms, and geeks weren’t enough. To get his venture going, Mininno needed his first insider, one willing to put their lips on the whistle and blow. Then he had a lucky break. A source from his days working for that Wall Street investor called and said: “There’s a gentleman who’s been sharing some stories with me. You might want to talk with him.”
Mininno walked through the double glass doors of a Midwestern diner. He was meeting Alex, the nurse his source had hooked him up with. The guy was built like a refrigerator. He hadn’t shaved in days, and he was hungry for pancakes.
“You must be John,” he said. Mininno nodded. They followed the hostess back to a table where they sipped coffee and made small talk. As Alex demolished an extratall stack of blueberry pancakes with powdered sugar, Mininno described his company’s mission: Nail the bad guys and compensate people who step forward with the evidence to make that happen.
A weight seemed to lift from the informant’s mind. He’d been working at a home health clinic that sent nurses to help people after they’d been released from the hospital, and the clinic was essentially stealing money from the government, he said. He knew what he’d seen was wrong. But he hadn’t known there was anything he could do to stop it. And now Mininno was offering a share of the settlement if he could help prove the company had engaged in fraud.
“I’m in,” Alex said. (Some names and identifying details in this story have been changed.) Over the next three hours, he laid out the machinations of a Medicare profit mill: Nurses were instructed to skip patient assessments and provide services whether seniors needed them or not. Patients who needed more visits didn’t get them, because repeat visits lowered profitability. The practice plied retirees with free trips to casinos and paid doctors kickbacks for referrals.
“Dirtbags,” Mininno thought. “This is incredible. But I need the nuts and bolts.” Was there anyone else with access to records that could prove this? “The IT guy,” Alex replied. “He lives in Atlantic City. He runs all the computers.”
A few weeks later, Mininno shuffled into a casino. He stood in the doorway as poker players stared at their cards. He had no idea which one to look for. Then, from the table closest to the door, a sharp set of eyes in a sharp-featured face looked straight at him. It was his guy, a computer programmer named Oscar. He was conspicuously alert, intelligent, the kind of guy who thinks a hundred miles a minute and doesn’t need much sleep. At night, he played poker. By day, he ran the IT infrastructure for Alex’s erstwhile employer, which had mushroomed into a multimillion-dollar operation.
Over steaks, Mininno gave his pitch some torque. “Listen,” he said, “if I’m here talking to you about your employer—if our little company can find this—it’s only a matter of time before someone goes to the authorities.” There were two options: Help the investigation before the company was busted and collect a slice of the settlement, or be interrogated later as the head geek of a fraudulent organization.
“I need some time to think about this,” the programmer said.
“Take all the time you need.”
A month later Mininno got a data file from Oscar. The numbers showed systematic gaming of Medicare reimbursement rules. One part of the scheme allegedly worked like this: Medicare pays a provider based on the number of visits to a patient’s house in a 60-day period. If the provider makes up to nine visits, it gets reimbursed $2,200. For 10 visits or more, the provider gets an additional $2,200, because the case is assumed to be more severe and complex. A chart of visits per patient in 2007 showed that five times as many patients were getting 10 visits than were getting nine visits. When Medicare changed its rules in 2008 to set payment thresholds at six, 14, and 20 visits, the frequency distribution shifted dramatically to maximize revenue at the new thresholds. Jacking up the number of visits just to get over those thresholds is fraud, because the only legal basis for Medicare reimbursement is medical necessity—not profit maximization.
Meanwhile, Mininno was using the employment database to find nurses who could confirm they’d been instructed to visit each patient once a week, regardless of whether the patient needed those visits (or required more frequent visits). Ultimately, Mininno worked with a law firm, which filed a false-claims lawsuit against the company in the spring of 2012. The Department of Justice reviews such cases and triages through them, looking for cases with merit. After two years of bureaucratic review, a Department of Justice task force pulled a warrant for a raid in 2014, and the case is now grinding through the settlement process. Since 2012, Mininno and the lawyers he works with have filed around 40 lawsuits, which means more raids, prosecutions, and settlements are likely in the coming months and years.
Back at his office in a rented Victorian in New Jersey, Mininno is talking about snow days. His practice is expanding (he’s currently searching for a data scientist with a public health background), and he’s looking into potential new cases. His staff also includes a part-time private investigator, and he has software developers and statisticians on contract. One of the latter, Brandon Cosley, has written a query for Medicare claims during weather emergencies.
Related Stories
On snow days, people usually reschedule nonemergency appointments. They stay in bed instead of driving to the doctor. Emergency rooms will see an uptick in visits because of car accidents and cardiac events triggered by snow shoveling, while regular doctors’ offices will see a drop. But providers filing for phantom services make the same number of claims in the middle of Snowpocalypse as they do the day before and the week after. They bill as if the day was totally normal, even if it was not a normal day at all. If there’s a hallmark of fraud, it’s a lack of variability—the missing randomness of people and their bodies and behaviors. Fraud is algorithmic and invariable because it’s optimizing revenue, not meeting human needs.
This is the kind of thinking—a sense for where billing patterns don’t match the practice of medicine—that can differentiate legitimate providers from billing mills that are ripping off Medicare and, by extension, taxpayers. It’s a marriage of convenience between the government and the bounty hunters, explains Patrick O’Connell, who headed up the Texas Medicaid fraud division from 1999 to 2007, before becoming a whistle-blower attorney. “The government has a tendency to not like whistle-blowers who are just in it for the money. They prefer someone pure,” he says. But in reality the government can’t afford pure. It doesn’t have enough lawyers to take on the teams of $1,000-an-hour attorneys that big health care operations tend to hire. These lawsuits, he says, are “the greatest outsourcing program in American history.”
A gigantic government operation is always going to be an appetizing target for skimmers, rule benders, and straight-up crooks. Data science is part of the answer. Lawyers are still necessary. But to extract the dirt from the data, you need to understand how human beings might be tempted to manipulate the truth—and where they fail to cover their tracks. There is no app for that.
J. C. Herz () is the author of .
This article appears in the March 2016 issue.
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All of us at WIRED appreciate your support!【完工】Artest creates a title frenzy in Houston
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Artest creates a title frenzy in Houston
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By Marc Stein<()
Updated: October 10,
Bill Baptist/NBAE/Getty Images
What does Ron Artest know about long playoff runs? In nine trips to the postseason he has advanced past the first round only once. Well, for T-Mac and Yao Ming, that is more than they can say.
HOUSTON -- As he lifts off the first No. 96 jersey in NBA history, smiling uncontrollably at his corner locker after playing his first game for the ,
insists that he's really like a lot of you conservatives out there.
OK, OK. Let's clarify a little.
Giddy as he is about the chance to show off his numerical creativity in Houston and inspired by all the grandiose talk his arrival has generated, Artest insists that he's just like any of you who've been thinking that the Rockets shouldn't be hyped up too much just because of the new guy.
Don't those hype-machine operators know that Ron-Ron has had his own problems getting past the first round of the playoffs?
"That's true," Artest says. "That's very true. I think the same thing sometimes. I come here and I get this big welcome, 500 fans or something [at an August pep rally to greet Artest's arrival], and I'm like, wow, I haven't even won anything yet.''
You can look it up: Artest has advanced out of the first round just once in his first nine seasons, which is one time more than either
can claim. That sort of math makes it a bold leap to describe him as the Rockets' missing piece to snap in alongside Yao and T-Mac, especially since Artest hasn't exactly made a regular bid for a spot on the NBA's All-Reliable Team.
Rockets Camp
If everyone stays healthy can Houston work its deep 11-man rotation? Marc Stein makes five observations from Rockets camp.
Yet you also had to know that trying to temper expectations in Houston would be futile, for Artest or anyone else, after the Rockets followed up a 22-game winning streak amid all of last season's injuries by swinging the trade of the summer in late July. You might recall that in each of the previous three offseasons -- when the newcomers ranged from
-- Houston was widely hailed as the West's proactive, rising force. A full-on frenzy, then, was the only conceivable outcome with a move of this magnitude.
''It's exciting," said guard , Houston's other chief offseason import. "It's amazing how many people sit on pins and needles when you bring up his name, but I think people who understand this game know exactly what kind of talent you're talking about.
"For the basketball people, they understand that this kind of [team] adding that kind of talent is something that could really be explosive. We'll see how it plays out."
We haven't been able to see too much yet of McGrady, who is still recovering from offseason knee and shoulder surgeries and is unsure how many exhibition games he'll be able to play after missing the first two. And veteran glue guy
-- who could move to the bench to make room for Artest or retain his spot in the starting lineup if Artest becomes Houston's sixth man -- is expected to miss the entire month of October thanks to a slow-recovering foot injury. With Rockets coach Rick Adelman also working Yao back in slowly after a stress fracture that sidelined his 7-foot-6 center for last season's final 27 games as well as the playoffs, Artest doesn't have to do any fitting in right now.
More than anything, I'm here to be a complement. I'm not here to be the face. I ain't here to be the No. 1 name.
-- Ron Artest
The skeptic might describe that as a dangerous start for the Rockets, giving Artest so much off-the-bat prominence and then asking him to scale back when the games start counting or perhaps even move to the bench. But the Rockets aren't nearly that skittish, for all their attempts to speak modestly about what the Artest acquisition can do for them, because the risk is inarguably minimal no matter what you think of Houston's big-picture chances.
Artest, who turns 29 next month, is in the final year of his contract and obviously needs a successful season for his future. He's reuniting with his self-proclaimed favorite coach after a half-season of success under Adelman in Sacramento in 2006 and hooking up with two franchise players who hold Artest's respect, making it easier for the Rockets to establish the pecking order most top teams have. Determined to provide a support system for Artest and anyone else in the locker room who needs it, Houston recently hired former NBA guard Shawn Respert -- who gained a reputation as a player mentor while serving as director of basketball operations in the D-League -- as its new director of player programs.
If this gamble backfires and Artest's presence causes too much tension? Houston will have surrendered only rookie
and another future first-round pick that figures to fall outside the lottery. The belief is that Artest can be the X factor to help the Rockets finally win a playoff series for the first time since 1997.
And if the dice roll does pay off? For a minimal cost, Houston general manager Daryl Morey -- nowadays regularly described as a whiz kid thanks to his acquisitions of Artest and Scola after being prematurely derided as an inexperienced numbers guy from the "Moneyball" school -- has furnished the heretofore soft Rockets with an enforcer who can play three positions as well as a broad-shouldered scorer to step in if Yao or T-Mac gets hurt.
So we wonder: Isn't there more to fear here in the health histories of Houston's two cornerstone players?
"I'm an evidence guy," Morey said. "And a look at the evidence [over Artest's career] says that there's some risk there. But I think we've mitigated any risk as well as we can."
It sounds as though Adelman has even less hesitation. Summoned to a meeting earlier this week with Rockets owner Les Alexander and Morey, Adelman was asked to assess Houston's odds of legit contention. He promptly told Alexander that he likes the Rockets' title chances as much as any other team's.
"He seems really at ease playing with these guys," Adelman said of Artest.
Bill Baptist/NBAE/Getty Images
Is Ron-Ron really going to be able to deal with a sixth-man role?
Added Barry, who's hardly prone to hyperbole after four seasons with ever-humble San Antonio: "A lot of people say when things are going great, Ron is going great, and when things are going bad, then you have to watch out. We'll see if any of that crops up at any point this season, but … just physically he's such a presence. Even our own guys, walking in and seeing Ron for the first time in a jersey … this is a guy that should have a helmet on and shoulder pads out here, but then he's moving his feet and has the lateral quickness to be able to guard
full court. Even in [the] slight bit of scrimmaging and up and down play we've done, he's just been unstoppable. He really is a guy you can't match up against."
He's also a guy trying hard not to say anything that gets him in trouble, knowing that folks are just waiting for the first big blowup.
Any seasoned Artest-watcher knows that, by the time you finish reading this sentence, something new and inflammatory from Artest's mouth might be dribbling into circulation. His go-to move remains the 180-degree spin … and he doesn't even deny it.
"That's one of my biggest problems," Artest says. "People always know what's on my mind. I always tell people how I'm feeling."
But he's been consistent with the restraint so far, rejecting every chance to do what he usually does and loudly guarantee a title run. (Throughout his final season as a King, many of Artest's e-mails ended with the sign-off: "2008 NBA Champions.")
If you're looking for Artest's wildest Houston act to date, it's probably his choice of jersey number, which he justifies by explaining that the 9 and the 6 are the digits that look most like a lower-case Q and lower-case B -- qb -- so he can pay tribute to his Queensbridge roots in Queens, New York.
"Some people want to hear bad things," Artest said. "If it's good, it's not a story.
"You can tell everybody I've been having a ball. More than anything, I'm here to be a complement. I'm not here to be the face. I ain't here to be the No. 1 name. I'm not here for none of that. I'm here to complement and I'm here because everybody's expectations [are] high.
"We have expectations here. You don't have to say what those expectations are all the time, but in the back of our minds, everybody knows what the expectations are. You gotta walk the walk. I can say [championship] all I want and I could keep saying it until I can't say it no more, but we gotta walk the walk."
Pressed for what he considers reasonable expectations for his new team, Artest added: "We need to get Tracy back and then you can ask that question." The only guarantee I heard from Artest during my brief visit in town, prompted by his early string of 3-pointers (6-for-10) in exhibition play: "I will not let teams double Yao and Tracy."
Said McGrady: "It's definitely the best team I've ever been a part of. We have a lot of stuff here. … [But] myself and Yao, even without the additions that we've [made], we've had some great runs in the regular season, but it's not even about that no more. It's about the second part of the season. And that's the playoffs, seeing what we do when we get there."
Marc Stein is the senior NBA writer . To e-mail him, .
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