With its ever growing involvement in the nation’s health care system, heath care fraud investigations have become a growing priority for the federal government. Using sophisticated computer data analysis, and working in conjunction with multi-agency task forces and private insurance providers, federal investigators can identify and target atypical billing spikes for closer investigation.


Federal health care fraud prosecutions can range from relatively small amounts in the hundreds of thousands to large, complex cases involving hundreds of millions. The FBI has announced that, through its Medicare Fraud Task Force, it will continue to dedicate a significant amount of “expert resources” to health care fraud investigations.


Common Medicare fraud schemes are:

• Hospice care centers overbilling for patient stays and medical care.
• Rehabilitation centers systematically inflating rehabilitation bills.
• Durable medical equipment fraud.
• Nursing home overbilling of staff time and patient care.
• Assisted living center fraud.
• Medical coding fraud: alteration of medical codes for different procedures and diagnosis.
• Ambulance service fraud: billing for rides not authorized by Medicare.


This is an example of a real case of health care fraud. It is based on the case of Y. Sosa and A. Leon—both of whom were convicted on one count of conspiracy to commit health care fraud; eight counts of health care fraud; one count of conspiracy to pay healthcare kickbacks; and three counts of paying kickbacks in connection with a health care program. The offenses allegedly occurred in the Western District of Florida in 2011 and the two men were convicted in 2012. Sosa was sentenced to 102 month in the federal penitentiary.


In 2002, Leon incorporated Discovery Therapy, Inc. Nine years later he opened a J.P. Morgan Chase bank account for the company. He then hired DNA Billing to prepare Medicare claims for Discovery. That same year (2011) Discovery applied for, and eventually became, an authorized provider of Medicare Part C services through Blue Cross Blue Shield (BCBS) which administers the Medicare Part program.


Once it became a licensed Medicare Part C provider, Discovery listed itself as a “convenient care center.” Such clinics are designed to deal with minor illnesses, injections, and physical therapy. Leon arranged with BCBS that all Medicare payments would be directly deposited into its J.P. Morgan Chase account.


Shortly after he began submitting Medicare payment claims to BSBS, Leon put Sosa’s name on the J.P. Morgan Chase account because Sosa had invested $10,000 in Discovery, which entitled him to a partnership in the company.


The Morgan Chase account had substantial assets. Sosa and Leon each withdrew $119,000 from the account. $30,000 of Sosa’s withdrawals were checks written to a company he created but never opened—Y&R Medical Center Group. The remaining $89,000 was distributed directly to Sosa.


Over a three-month period during the summer of 2011, Discovery had 12 Medicare Part C patients who were ostensibly given pharmaceutical injections and infusions. The fraud commenced with these patients who did not receive any injections or infusions. Discovery hired Migel Milian Martinez to recruit patients to seek medical services at the clinic. Martinez targeted individuals who were either HIV-positive or suffering from AIDS. These patients would receive vitamin shots or protein injections as treatment while Discovery submitted to Medicare claims that they had received dosages of expensive drugs, typically octreotide depot. It would later be established that not only did these patients not receive this drug, Discovery had never even purchased octreotide depot.


Discovery compensated the patients with $450 to $500 a week in cash payments. For example, Discovery submitted 12 ostreotide depot claims for one patient, Edward Caldero. The clinic actually claimed three injections of the drug on two separate days in July 2011. Caldero never received a single ostreotide depot. What he did receive were Vitamin C or Vitamin B-12 injections. In sum, Discovery billed Medicare $143,450.65 for Caldero’s “treatment” and received $90,701.20 from BCBS for that purported treatment.


Martinez received $43,000 over a three-month period for recruiting Caldero and other patients for Discovery. Sosa admitted that he knew Martinez and that he was paid to bring patients to the clinic. Sosa, however, said that money was for transporting patients to the clinic, not for recruiting them.


BCBS became suspicious in August 2011 that something was amiss when its auditing system detected that Discovery had submitted claims for patients receiving octreotide depot on consecutive days. The drug has a long-acting effect, taking as long as a month to be absorbed in large muscles. BSBS’s own policy did not permit a patient to receive the drug more than once over a four-week period. BCBS immediately moved to halt processing Discovery’s Medicare claims. By then, however, discovery had already billed BCBS for $1,244,088.13 in claims for its 12 patients. An ensuing audit, and search, of Discovery’s premises revealed enough evidence for the Government to seek, and secure, a 15-count indictment against Leon and Sosa.


On February 2, 2015, the Eleventh Circuit Court of Appeals upheld Sosa’s conviction.


While the decision to indict was mundane, the Government’s response to the fraud scheme demonstrates just how serious the Government takes fraud in the nation’s health care system.