We have seen many Medicare fraud scams - phony providers who commit identitytheft and bill for services never performed, surgeons performing unnecessary procedures, providers overbilling and “patient recruiters” paying homeless people to seek treatment they don’t need. Another scheme is phantom office visits.

In February, a New Jersey physician, Albert Ades MD, was indicted for Medicare fraud after prosecutors say he billed for phantom office visits; visits that never happened.

According to the indictment, between 2005 and June of last year, Dr. Ades billed Medicare, Medicaid and private insurance plans for office visits even though he never saw the patients on those dates.

Prosecutors claim that Ades instructed employees to alter patient charts to make it appear the patient was in the office. Ades was caught after an insurance company audited his records. A patient alerted the company after noticing that a prescription refill phone call was billed as an office visit. Prosecutors say that instead of admitting the mistake, Ades began destroying and altering records.

Ultimately, four employees cooperated with the FBI. One worker purportedly recorded a conversation in which Ades was confronted about his illegal activities. When asked about charging for office visits even though he never saw the patient, Ades said, “I wrote something — the fact that I wrote something, documented something – somebody’s paying me for that.”

Ades is charged with one count of health care fraud and 35 counts of making false statements. Healthcare fraud is punishable by up to 10 years in prison. If the fraud causes someone to suffer an injury or die, the punishments can be much higher. The false statement charges carry a maximum prison term of 5 years per violation. In total, Dr. Ades faces up to 185 years if convicted of all charges. He also faces the probable loss of his medical license. An indictment is a finding of probable cause and not a finding of guilt. Ades is presumed innocent until proven guilty. 

In another recent case, a New Jersey pediatrician pleaded guilty to billing for more than 1000 procedures that were never performed.

While any physician can occasionally make a billing mistake, billing for over 1000 procedures that were never performed or billing telephonic prescription refills as phantom office visits is a crime.

Medicare fraud remains a big problem in the United States. The FBI estimates that Medicare fraud costs taxpayers between $17 billion and $57 billion each year. Many cases are brought to light by whistleblowers; concerned physicians, billing clerks and other healthcare professionals that come forward to report fraud. When the fraud involves a taxpayer supported healthcare program such as Medicare or Medicaid, whistleblowers are entitled to an award. Under the federal False Claims Act, whistleblowers can receive up to 30% of whatever the government collects but only if a lawsuit is first filed in federal court. Last year the federal government paid $635 million to whistleblowers.

Many states have similar laws covering Medicaid fraud.