ABC News Runs McAllen Medicare Fraud Sting

The healthy 82-year-old grandmother of an ABC News producer goes undercover and reveals Medicare fraud in McAllen, "the town Medicare dollars built." 
Mon March 5, 2012 8:09 pm
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In June 2009, the New Yorker ’s Atul Gawande penned his  famous story  about health care, “The Cost Conundrum,” in which he reported that McAllen was “one of the most expensive health-care markets in the country,” and that when it came to Medicare specifically, costs were almost twice the national average, with the federally funded program for senior citizens paying for five times as many home-nurse visits.

“The primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine,” Gawande concluded, which is why an ABC report that aired on Friday caught his eye. He tweeted: 

The story, by producer Megan Chuchmach and investigative reporter Brian Ross, set up Doris Ace, Chuchmach’s 82-year-old grandmother, as a new resident of the city Ross claims is “called the town Medicare dollars built.”

Ace, a relatively healthy woman who is shown playing golf and line dancing, meets with Medicare “recruiters” and visits the office of a local doctor who files paperwork saying Ace needs “assistance for all activities” and that she suffers from diabetes (which she does not).

Over the course of one month, nearly $1,800 worth of Medicare billings for home nurse visits and other treatment were filed on Ace’s behalf before ABC stopped its investigation (the network plans to reimburse the government that money):

“That’s fraud,” Tim Menke, senior adviser for investigations in the Inspector General’s office at the Department of Health and Human Services told the network.

Dr. Padmini Bhadriraju of McAllen, the doctor Ace visited, is shown on camera refusing to comment. Her lawyer, John Rivas, wrote in a letter to ABC News that “it would be irresponsible journalism to air a story on Medicare/Medicaid fraud using this referral as an example when there is clearly no evidence of fraud.”

The ABC story comes on the heels of what the federal government has  called “the largest alleged home health fraud scheme ever committed,” as Jason Trahan of the Dallas Morning News reported last week. In that case, Rockwall doctor Jacques Roy and six associates have been accused of racking up $375 milllion worth of allegedly false billings, with some “patients” recruited from homeless shelters. 

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