Scam Artists Use Dead Doctors' IDs to Abuse Medicare

July 8, 2008— -- From a small Florida office, Nelson Martin and Aurelio Benavides' plan to trick the government into giving them millions of dollars was fairly straightforward. Posing as major suppliers of medical equipment, part of their plan enabled them to use Medicare identification numbers from doctors who were dead to file false claims and bill Medicare.

According to court documents, the pair submitted $14.3 million in false claims for reimbursement. As a result, Medicare paid them about $1.3 million.

A new report finds those scams happen far too often.

It reveals that people have successfully used dead doctors' IDs for years to defraud the government through the federal program that provides health insurance to elderly and disabled Americans.

The report, to be released Tuesday night by an investigative subcommittee of the Senate Homeland Security and Governmental Affairs panel and obtained exclusively by ABC News, reveals how common those practices are.

The system is supposed to work by allowing doctors to order medical equipment like wheelchairs, prosthetics or orthotics from supply companies, who then request reimbursements. But the report estimates that Medicare paid for around half a million claims containing identification numbers of more than 16,500 dead doctors between 2000 and 2007.

By pretending that a prescribing doctor had signed off on the claim, the report estimates that the cost of those abuses added up to "well over $76.6 million, and it is possible that that number actually exceeds $92 million."

In more than 50,000 of those claims, the report found the doctors had been dead a decade or more.

"These numbers are so huge, that in the final analysis you're looking at perhaps a hundred million dollars' worth of fraud from claims provided by dead physicians using their identification number, even though they had been long laid to rest," Senator Norm Coleman, R-Minn., told ABC News on Tuesday in an exclusive interview.