Testimony of:  
Brian Martens 
Assistant Special Agent in Charge 
Office of Inspector General 
U.S. Department of Health and Human Services 
 
 
 
Hearing: 
Preventing Medicare Fraud: How Can We Best Protect Seniors 
and Taxpayers? 
 
Senate Special Committee on Aging 
 
March 26, 2014 
Dirksen 562 
2:15 PM 
 
 
 
 
 
 
 
 
 
 
  Testimony of: 
Brian Martens 
Assistant Special Agent in Charge 
Office of Inspector General 
U.S. Department of Health and Human Services 
 
 
 
Good morning, Chairman Nelson, Ranking Member Collins, and distinguished Members of the 
Committee.  I am Brian Martens, an Assistant Special Agent in Charge based in the Miami 
Region with the U.S. Department of Health and Human Services (HHS) Office of Inspector 
General (OIG).  I appreciate this opportunity to describe the work of our Special Agents in South 
Florida to fight Medicare fraud and protect seniors. 
 
We are having a positive impact in Florida and across the country.  As reflected in the most 
recent Health Care Fraud and Abuse Control Program (HCFAC) Report,1 OIG efforts, together 
with those of our law enforcement partners, have led to a record setting return on investment of 
over $8 to $1.  Through coordinated enforcement efforts across the country, including those of 
the Medicare Fraud Strike Force teams, criminal prosecutions and monetary recoveries have 
increased while we have seen a measurable decrease in payments for certain medical services 
targeted by fraud schemes.  One such example is the drop we have seen in Community Mental 
Health Center (CMHC) Medicare payments.  Following targeted enforcement activities, 
nationwide Medicare CMHC payments fell from an annual $273 million to $31 million over a 4-
year period.  Florida is an area where CMHCs were geographically concentrated.  Despite our 
measurable successes in combatting fraud, South Florida continues to be a hot spot of health care 
fraud and Miami is considered ground zero.   
 
In Florida, we are seeing fraud schemes quickly evolve.  As enforcement efforts target certain 
schemes, new permutations of those schemes arise.  Not only are fraud schemes mutating, they 
are migrating  geographically and even between parts of the Medicare program.  We are seeing 
an evolution of beneficiaries roles in health care fraud  including unknowing victims and 
                                                           
1 Report produced annually by the Department of Health and Human Services and the Department of Justice, 
available at http://oig.hhs.gov/reports-and-publications/hcfac/index.asp.   
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Preventing Medicare Fraud: How Can We Best Protect Seniors and Taxpayers?    
March 26, 2014 
  complicit participants.  We also continue to see organized criminal networks operating in a 
systematic approach to steal money from Medicare.  The criminals committing these crimes are 
often dangerous and we regularly encounter stockpiles of weapons when we execute arrests and 
enforcement operations.  These criminals are taking advantage of those most vulnerable in our 
society  the elderly and the disabled.   
 
Medicare fraud is not a typical white collar financial crime.  And it is not a victimless crime  it 
can affect patients, their families, the health care system and all taxpayers.  And its not just 
about the money  when fraud is committed, Medicare beneficiaries can suffer physical harm.  
 
Take for example the case of an HIV-positive beneficiary who lived in a socio-economically 
depressed area in South Florida.  He lived in a boarded up mobile home and was being paid cash 
by a professional patient recruiter to go to a specific clinic for his HIV treatment.  Only instead 
of getting the expensive HIV drug treatment he needed and paid for by Medicare, he willingly 
accepted a vitamin mixture in exchange for cash.  During our investigation, a medical doctor in 
the community complained that the patients in that clinic were using the cash kickbacks to 
purchase drugs and alcohol, yet those habits only made the HIV-positive patients sicker.   
 
Thankfully, the majority of our cases dont involve direct physical harm to patients.  However, 
Medicare fraud can create hardships for beneficiaries in many ways:   
  Medicare fraud can distort a patients medical history when false records are created to 
support false claims.  If a patients identification number is stolen and used for false 
claims, that patient may be denied necessary equipment or care because Medicares 
records indicate that patient already received those services.  For instance, if a patient 
needs a wheelchair, but a fraudulent claim has already been submitted for one, what is the 
patient to do?  
  If a Medicare beneficiary number is compromised, there is currently no way for the 
patient to get a new number, which leaves the patient vulnerable to identity theft.  We had 
a recent case in Tampa in which stolen Medicare numbers and personally identifiable 
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Preventing Medicare Fraud: How Can We Best Protect Seniors and Taxpayers?    
March 26, 2014 
  information were used to file tax returns and the criminals received fraudulent tax 
refunds.   
 
Beneficiaries are vulnerable and can be adversely affected by Medicare fraud.  But it is important 
that I tell you today about another role that beneficiaries play in Medicare fraud, particularly in 
Florida.   
 
Medicare fraud needs at least two elements to succeed:  1) health care providers who bill 
Medicare; and 2) patients, or beneficiaries, on whose behalf Medicare is billed.  Beneficiary 
roles can be categorized into three types:   
1.  Unknowing victims  for example, victims of medical identity theft.   
2.  Unwitting beneficiaries  for example, beneficiaries who have received some type of 
medical service or product but were not aware that it was medically unnecessary or 
was billed improperly to Medicare.  Some of these beneficiaries suffer physical harm 
from the medical service.   
3.  Complicit participants  for example, beneficiaries who use their Medicare numbers 
for personal financial gain.  This can take the form of beneficiaries selling their 
Medicare number to be used in fraud schemes, or receiving payments to obtain 
unnecessary or inappropriate medical treatment solely for the purpose of defrauding 
Medicare.  Beneficiaries can make around $1,500 in cash per month plus other 
benefits for participating in such schemes.  Unfortunately, we see complicit 
beneficiary participants involved in a lot of our Medicare fraud cases in South 
Florida.   
 
Fraud schemes can be both viral and migratory.  For example, we first saw the HIV fraud 
scheme in Miami.  Through aggressive targeted prosecution and increased enforcement efforts in 
Miami, we saw the decrease of those services billed under Medicare Part B in Miami and saw the 
fraud scheme surface in Detroit, Michigan.  In Detroit, the schemes were even organized by 
some of the relatives and co-conspirators of the Miami perpetrators. 
 
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Preventing Medicare Fraud: How Can We Best Protect Seniors and Taxpayers?    
March 26, 2014 
  Now, the HIV scheme is again resurfacing in Miami; however, it is now being billed under 
Medicares managed care program, Part C, perhaps in part because of fraud prevention measures 
implemented in Medicare Part B.   
 
Medicare Part D, specifically pharmacy fraud, is an area where we are seeing the largest increase 
in our South Florida case work.  Prescription drug fraud is a complex crime that can involve 
many co-conspirators  drug distributors and traffickers, health care professionals, patient 
recruiters, drug-seeking patients, and pharmacies may all play a role.  Criminal enterprises are 
also becoming an increasing presence in prescription drug fraud. 
 
It is important to note that OIG prescription drug fraud cases are not limited to investigating 
schemes involving only controlled substances.  Our work is increasing in matters involving high-
cost, noncontrolled, name brand prescription drugs such as respiratory, anti-psychotic, and 
HIV/AIDS medications. 
 
Another area in which the schemes continue to evolve is home health services.  Although we 
have seen a decrease in home health payments, the area remains rife with fraud and is one of our 
top priorities.  Home health schemes were initially characterized by billing Medicare for 
expensive long term skilled nursing visits to administer insulin injections to diabetics.  However, 
the scheme has changed and now involves billing for physical therapy and occupational therapy.   
 
To combat these and other schemes, we strategically leverage partnerships with other law 
enforcement agencies, CMS, and the private sector.  For example, in Maine where we have only 
four agents, our partnerships are extremely important.  Our agents in Maine have successfully 
worked Medicare cases involving prescription drugs, medical identity theft, and home health 
fraud as we see in Florida; however, Medicaid fraud comprises the majority of our work in 
Maine.     
 
Health care providers and beneficiaries can serve as the front line of defense by refusing to 
participate in these schemes and reporting suspected fraud.   
 
4  Senate Special Committee on Aging 
Preventing Medicare Fraud: How Can We Best Protect Seniors and Taxpayers?    
March 26, 2014 
  I began my testimony by telling you about some of the outstanding results of our Medicare fraud 
enforcement efforts.  However, it is important to note that OIGs mission is challenged by 
declining resources at a time when prescription drug fraud and other schemes are on the rise.  
Our Part D investigative caseload has almost quadrupled over the past 5 years, while at the same 
time, Strike Force teams are not operating at full strength due to funding shortfalls and hiring 
freezes.  The additional funding in OIGs 2015 budget request would, among other things, 
support additional boots on the ground in Florida and in other high health care fraud areas across 
the country.  We appreciate this Committees support.  
 
Thank you for the opportunity to testify.  I would be happy to answer any questions. 
5  Senate Special Committee on Aging 
Preventing Medicare Fraud: How Can We Best Protect Seniors and Taxpayers?    
March 26, 2014