Fraud and Florida's multimillion-dollar wheelchair

(Corrects name of Harvard University's John F. Kennedy School of Government in paragraph 21)

By Tom Brown

MIAMI, Oct 22 (Reuters) - One Miami-area medical equipment supplier managed to bill the U.S. government so often for a wheelchair it ended up costing $5 million.

Last year south Florida accounted for 80 percent of the drugs billed across the entire United States for Medicare beneficiaries with HIV/AIDS, even though the region only had about one in 10 of eligible HIV/AIDS patients.

Fraud against Medicare, the federal health insurer for America's 43 million elderly and disabled, has become so prevalent that it may rival the illegal drug trade as a crime of choice in a state long renowned for cocaine cartels, political shenanigans and swampland real estate scams.

In one case, said Alex Acosta, the U.S. attorney for the Southern District of Florida, a company had billed Medicare for millions of dollars worth of specially formulated asthma medication prepared at what the owner claimed to be his own local pharmacy.

"The person wasn't a pharmacist, he was an air conditioner repairman. When we raided the so-called pharmacy where he mixed all these aerosols it was nothing more than a broom closet where all we found was a can of tar," Acosta told Reuters.

Fraud targeting health-care programs for seniors is not unique to south Florida, where many elderly Americans have retired to end their days in the sunshine.

But the authorities say it's become a huge and growing industry here.

"If you're a criminal and your sole goal is to make money, health-care fraud looks increasingly attractive," said Acosta.

"You can make several million dollars from health-care fraud and the penalties are much less severe than they are for narcotics trafficking," he added.

The Department of Health and Human Services, which oversees hundreds of billions of dollars in annual Medicare spending, reported last month that south Florida seemed to be playing an unusually large role in the provision of infusion drug therapy -- medicines delivered intravenously outside a hospital or nursing home -- to Medicare beneficiaries diagnosed with HIV or AIDS.

'A SMALL DENT'

In the second half of last year just three counties -- Miami-Dade, Broward and Palm Beach -- accounted for half the total infusion drug therapy charges nationwide, and nearly 80 percent of the amount of drugs, billed across the entire United States for HIV/AIDS patients on Medicare, the report said.

It said the disparity was even greater before, most notably in the first half of 2005.

At the same time, only about 10 percent of national Medicare beneficiaries with HIV/AIDS lived in the three south Florida counties between July and December 2006.

There was no clinical explanation for the high level of billing in south Florida, according to the report.

In some cases, it said claims submitted by south Florida Medicare providers billing for HIV/AIDS services in the last half of 2006 totaled more than $1 million for each patient.

Local prosecutors have decided to go after the crooks.

Acosta said there was a dedicated team of about 60 people set up to combat Medicare fraud in south Florida, including about two-dozen FBI agents.

He added that his office was prosecuting about one in four health-care fraud cases nationally but complained that more resources were needed for prevention and enforcement.

His own budget for the fight totals less than $1 million per year, Acosta said.

"We could triple the number of cases prosecuted, yet again, but that's only going to make a small dent," he said.

Malcolm Sparrow, a fraud expert at Harvard University's John F. Kennedy School of Government, said Florida had long been identified as "a hotbed of criminal entrepreneurship."

Medicare fraud in the state, as elsewhere in the U.S. health-care system, is pervasive, he said, but the U.S. government needed to invest more time and money to discover its real extent.

"The rule with any white-collar crime is the well perpetrated cases are not detected. The ones we catch are the stupid, foolish and outrageous," said Sparrow.