Narco by Stephen Vaughn MD, Ph.D

I came across a story today, shocking and all too common.  Some individual in Texas has apparently been running a medical billing racket.  If it’s true, he hurt lots of people.

A task force investigating his guy announced Monday that “he was being indicted in a fraud case involving $240 million in claims that were in part based on “fraudulent statements” to be submitted to health care benefit programs, resulting in $50 million paid to the doctor.” (CNN)

This stuff is large-scale organized crime, not medicine. “The indictment also accuses this doctor of being a part of an extensive international money-laundering scheme, saying he laundered money through a money exchange house, known as a casa de cambio, and sent it to various accounts in financial institutions in Mexico.”

Follow the money.  It boggles my mind that a physician could bill out services that result in $50 million paid by an insurance company, Medicare or Medicaid. “The Department of Justice said Monday that the rheumatologist had given patients chemotherapy and toxic treatments they didn’t need, all to fund his “lavish” and “opulent lifestyle.””

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“The Department of Justice is seeking the forfeiture of his million-dollar personal jet, a Maserati that had ZQ — his initials — painted on its exterior and several of his luxurious properties.

This guy owned a fleet of luxury cars and purchased numerous expensive commercial and residential properties, including two penthouses in Puerto Vallarta, Mexico; a condo in Aspen, Colorado; and one in Punta Mita, Mexico. He also owned multiple homes and commercial buildings in Texas, court records show.”

This is big-league evil, the equivalent of a narcotics trafficking cartel.

What bothers me about the spin at the end of the article is hearing a Federal agency weigh in on the matter.  “This case is certainly not an isolated incident involving potential medical fraud. Health care fraud costs the country about $68 billion annually, according to estimates from the National Health Care Anti-Fraud Association, and that’s probably a conservative number. That’s about 3% of the $2.26 trillion the country spends on health care, according to the association.”

First – the National Health Care Anti-Fraud Associationisn’t doing its job.  They bill themselves as the leaders of the healthcare anti-fraud industry.  This phrase bothers me.  If we’re talking about this scope of money, it’s theft at the size of organized crime, gangs and cartels.  It’s not the small fry.  There just isn’t enough billing done by hospitals and other institutions to rival the $400 million a year that this guy is accused of.

Somehow, the healthcare payment system that we have today in America is rickety enough that an entire industry has to be constructed to minimize its being defrauded.  Where’s the FBI and local law enforcement?

Secondly, when you move a large volume of money around any industry, it attracts crooks.  We have a massive, centralized payment system that the crooks have learned how to loot like hijacking the stagecoach.  The people being robbed are the patient who are in need of services, as well as the honest healthcare providers who enjoy providing these services.

The best enforcement that the “healthcare industry” could have is not a “healthcare anti-fraud industry.”  Direct primary care is the micro-scale granular provision of services, and if the patient is not satisfied, the patient does not pay. End of story.

If we could only stop moving the money around in massive, ten-million-dollar chunks, signed off by bureaucrats who-knows-where, and have actual interpersonal transactions, a lot of the nonsense that went on in this woeful case would never have happened.

Don’t forget, if this guy is convicted and thrown in prison, there are still patients who were cruelly misdiagnosed and mistreated for unspeakable reasons.  Even if they received some remedy, I expect more than a few will be crippled for life. They deserve more from our healthcare system than “Whoops!  Sorry.”

And blaming doctors for this is the equivalent of blaming Mexican immigrants for MS-13 Most of the people who cross the border, illegally as well as the vast many who have come legally, are no threat.  Blaming them for the crimes of the real criminals does no benefit and is a lazy way of pretending to go after the problem. Target the criminals!  But that is hard work and scary.  The criminals have guns and attitudes.  The Mexican nationals are usually shy and frightened and can be pushed around.  They are much easier to bully.

And so are the doctors.  As much as the “anti-fraud industry” wants to appear like they’re tigers confronting massive racketeering and organized crime, most of them just intimidate the honest working doctor, reminding them that health care fraud is a felony under various states’ Health Care False Claims Act, punishable by up to four years in prison, a $50,000 fine and loss of health insurance. It’s also a federal criminal offense under the Health Insurance Portability and Accountability Act. (from BCBS Michigan website)

We know that.  We are not out to make money in healthcare to commit fraud.  We are here to take care of people.  Why target the average doctor to stand in for the rotten ones?

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Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  1 comment for “Narco by Stephen Vaughn MD, Ph.D

  1. Steve
    May 21, 2018 at 12:20 pm

    What amazes me is the level of fraud must reach many multiples of millions before anyone gets suspicious. We hear about complex computer algorithms being used to catch fraud, but cases like this show no one is really paying attention.

    In our own community, we’ve had practices or individual doctors engaged in outrageous fraud schemes over the years and nothing happens until many patients complain or a worker in the involved group makes a huge insider complaint.

    Even then, you hear stories about people complaining or reporting a doctor or group and the insurance company just yawns in boredom. Investigations tend to be astonishingly clumsy and late.

    Then, once the level of fraud is discovered, there is an effort by the investigating agencies to show they really are “on the lookout” for patients, but the reality is so many years of horrible stuff have gone by before anyone did anything.

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