Eleven armed FBI agents crept around a stone-and-glass house here just before dawn. An AR-15 rifle and four other guns were registered to the man in the house. “FBI warrant,” the agents called out, and a man in a T-shirt and shorts emerged. It was no drug lord. The target was a doctor who moonlighted as a movie producer with an Alec Baldwin comedy to his credit. The Justice Department charged the Southern California doctor, Robert A. Glazer, with writing prescriptions and certifications resulting in $33 million of fraudulent Medicare claims. The raid in May capped a year-long investigation by the Medicare Fraud Strike Force, a joint effort by the Justice Department and Department of Health and Human Services.
The story in the Wall Street Journal says that many strike-force investigations, including the Glazer case, start with an agent behind a computer screen, eyeing page after page of Medicare claims data, looking for unusual billing patterns. The Glazer case comes as the strike force increasingly targets physicians. “You need a doctor in all the schemes,” said David A. O’Neil, a deputy assistant attorney general for the criminal division who supervises strike-force prosecutions. He said the team charged 36 doctors with health-care fraud in the 2013 fiscal year, compared with just three in 2007, when many cases dug into fraud involving durable medical equipment such as wheelchairs.
The strike force’s Los Angeles team includes about 20 investigators and prosecutors working out of multiple offices, including a shiny tower in the suburbs near a strip mall dotted with family restaurants and chain stores. Last fiscal year, the strike force’s nine offices charged 350 people with health-care fraud, up from 122 charged when the strike force had just two offices. One agent described dealing with the voluminous number of potential cases as “Whac-A-Mole.”
Dr. Glazer attracted attention from authorities long before this year’s charges. In 1994, he was indicted with six others for an alleged referral scheme between 1986 and 1993. He was accused of paying $73,454 to a marketer during one 3½-year stretch to send him patients, according to California Superior Court documents obtained through a public-records request. Court documents indicate that the case was dismissed after a judge ruled that the prosecution’s witness testimony was inadmissible. Dr. Glazer was never excluded from billing Medicare, but patient complaints over billing prompted CMS several years ago to place him on “prepayment review,” according to people familiar with the situation. That meant any claims made to Medicare were manually reviewed by CMS contractors, a measure intended to prevent improper billing. Dr. Glazer was removed from the review list around 2009, these people said, although it isn’t clear whether CMS decided to take him off or if he appealed to an administrative judge. CMS said it doesn’t comment on administrative actions against individual providers. It is difficult to permanently ban a provider from Medicare. A criminal conviction or a loss of a state medical license can provide grounds to take a provider out of the system, and CMS can revoke billing privileges for reasons such as failing to comply with Medicare rules. Since 2011, CMS has revoked about 20,000 providers. But a provider can eventually appeal or reapply to return to the program.
The strike force began investigating him after sorting through years of his payment claims in the Medicare database, according to people familiar with the investigation. Such database searches look for “the sort of medically impossible or medically unlikely scenario,” said Supervisory Special Agent Robin McIlroy, who oversees the FBI’s part of the strike force. Between 2006 and 2014, Dr. Glazer’s family practice billed Medicare about $2 million, according to an affidavit by FBI Special Agent Janine Li, who was part of the investigation team. Between 2006 and 2014, Dr. Glazer’s family practice billed Medicare about $2 million, according to an affidavit by FBI Special Agent Janine Li, who was part of the investigation team.
When agents cross-referenced his Medicare provider number with other parts of the database – including claims data for home-health agencies, hospice and durable medical equipment – large billing numbers stood out, according to a person familiar with the investigation. “Once you start crunching the data, you start to see everything,” said Mr. Ferry, the special agent-in-charge. In the same eight-year time period, Dr. Glazer’s referrals to home health-care companies resulted in billings to Medicare for $16.5 million, and referrals to medical-equipment companies resulted in billings of about $5.4 million, the FBI’s Ms. Li said in her affidavit. Hospice services added up to about $10 million, according to a person familiar with the case.
Outliers popped up in the data. Using Dr. Glazer’s prescriptions, Medicare paid $2.5 million to one home-health agency down the hall from his office, while a local hospice was the recipient of nearly all his referrals, according to the person familiar with the case. Generally referrals are more spread out between multiple providers, said a person familiar with health-care fraud. The volume of motorized-wheelchair prescriptions in the data stunned the agents—an average of 134 a year, compared with a typical doctor working with elderly people who prescribed as few as one or two, according to the affidavit.
As the investigation progressed, agents in unmarked cars drove to Dr. Glazer’s clinic in Hollywood and watched. Located in a strip mall, along with a Salvadoran fast-food restaurant, a check cashier and a medical-supply company, the office received many elderly patients who spoke English as a second language, said the people familiar with the investigation. The agents interviewed patients drawn from the data, and a common allegation emerged: Dr. Glazer was billing Medicare for patient services sometimes never rendered and farming out patients to other providers, according to the indictment.