Investigation Reveals Billions Lost in Medicare Fraud

Government report concludes money sent to unchecked addresses and PO boxes.
2:02 | 07/22/15

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Transcript for Investigation Reveals Billions Lost in Medicare Fraud
We turn to your money tonight and an explosive government report revealing a number that's astounding and it's all your money. $60 billion in taxpayer dollars, medicaid payments sent out to addresses never checked. Jim Avila on the hunt for your money. Reporter: Our hunt defined how medicare is losing billions of dollars brought us here, Chicago's south side, and this odd location for a doctor's office. You run the mailbox place? Yes, we do. Reporter: Right next door to a porn shop, a mailbox store where medicare has sent nearly $600,000 in payments. It's listed as suite 308 which is just a mailbox. Nobody is practicing medicine in here? No. Reporter: The law says payment should be sent only to a location where someone is practicing medicine. Still your money flowed in. How much? $592,000. At least got a bigger box. Reporter: Today in a government report first obtained by ABC news, federal investigators charging medicare is not checking where it's sending your money, making it too easy for thieves to steal a record $60 billion, an estimated 23,000 fake or bad addresses like the address for this hamburger stand outside Dallas and this vacant lot west of Denver. We need to fix this problem and can fix this problem. Reporter: We went to capitol hill to ask the man in charge why they aren't using a simple computer program investigators told them about two years ago that can tell the difference between a doctor's office and a vacant lot. He says it's in the works. You haven't been sending checks to fake addresses? I think where we have, we have eliminated them from the program. Reporter: But federal investigators say until all the fake addresses are off the rolls, it's a risk to your money. David, medicare says it wants to move carefully against the fake addresses as to not penaltyize innocent doctors who accidently broke the rules. Investigators say the solution is long overdo. Jim Avila tracking taxpayer

This transcript has been automatically generated and may not be 100% accurate.

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