Linda Hennis was checking her Medicare filing in January when she noticed something strange: It said a company she’d never heard of had been paid about $12,000 to ship 2,000 urinary catheters.
But she never needed, or received, catheters.
Ms. Hennis, a retired nurse who lives in a Chicago suburb, noticed that the company selling the plastic tubes was called Pretty in Pink Boutique and was based in Texas. “There’s a mistake here,” Ms. Hennis recalls thinking.
They are among more than 450,000 Medicare beneficiaries billed for urinary catheters in 2023, up from about 50,000 in previous years, according to a new report by the National Association of Accountable Care Organizations, an advocacy group that represents hundreds of health care providers. care. systems across the country. The report used a federal database of Medicare claims available to researchers.
The huge increase in billing for catheters included $2 billion billed by seven high-volume vendors, according to this analysis, potentially accounting for nearly a fifth of all Medicare spending on medical supplies in 2023. Doctors, state insurance departments and groups health care about The country said a spike in claims for catheters that were never delivered indicated widespread Medicare fraud.
“We think it’s outrageous,” said Clif Gaus, executive director of the group that conducted the analysis.
Dara Corrigan, who directs the Center for Medicare Program Integrity, declined to say whether the agency was investigating the catheter charges. When the federal government suspects fraud, he said, it sometimes holds payments in escrow while it reviews claims. But he did not say whether that had happened for any of the probe payments.
“We do all of this behind the scenes to ensure the integrity of the investigation,” Ms. Corrigan said, speaking generally about the agency’s process. He described Medicare billing fraud as “one of those ever-present and ever-frustrating problems.”
Pretty in Pink Boutique, which billed Medicare at least $267 million for catheters between October 2022 and December 2023, could not be reached by phone.
Medicare billing fraud can have far-reaching consequences. Even if patients don’t pay the bills themselves, more spending by the state insurance program may increase the premiums enrollees pay in the future.
Catheters and other medical supplies are frequent targets of billing schemes. Last April, the federal government brought criminal prosecutions against 18 defendants who had submitted bills for non-existent coronavirus tests and other services related to the pandemic. And in 2019, the Justice Department said it had destroyed an international fraud ring involving over $1 billion in false billing for back and knee braces.
Medical supply companies are easy to form and have a relatively low bar for proving medical necessity. Companies “don’t need much to show why grandma needs a urinary catheter,” said Eva Gunasekera, who formerly headed health fraud investigations at the Justice Department.
Patients and doctors who have been reporting mysterious catheter claims to Medicare for months say they are frustrated by a lack of communication from the government about whether billions of dollars have been lost in an ongoing billing scam.
One of the advocacy team members, Dr. Bob Rauner, runs a large network of physicians in Nebraska. In an interview, he said his patients had collectively been billed nearly $2 million in 2023 for phantom catheters. (He tracks such costs because his organization receives bonus payments from Medicare when patients have good health outcomes with low total medical costs.)
“I just know it’s all a scam because our doctor didn’t order it and our patient never got it,” said Dr. Rauner, who filed a complaint with the federal health department’s Office of Inspector General in mid-December.
The vast majority of suspicious claims identified by the new analysis came from seven companies, many of which share executives, according to public documents and the advocacy group’s report. Only one of the businesses had a working phone number and did not return a request for comment. The other numbers were either disconnected, went to different businesses or, in one case, went to a previous owner.
Pretty in Pink Boutique is enrolled in Medicare to a home address in El Paso. His phone number goes to an auto body shop called West Texas Body and Paint, where an employee who answered a call from a reporter said the shop gets “calls all day, every day” from Medicare enrollees concerned about fraudulent bills.
Pamela Ludwig runs an unrelated business in Nashville also called Pretty in Pink Boutique. He has received so many probe complaints that add a page on her website explaining that her business was not part of any scam.
“I have people calling me, cursing, screaming,” Ms. Ludwig said. “They feel violated.”
She called in a complaint to Medicare in September, she said, but the barrage of calls hasn’t stopped. In November, her husband was informed by a New York banker who said several men had come to his office asking to set up an account for Pretty at Pink Boutique. “He asked if we had recently sold our business,” Ms. Ludwig said.
The issue was on the radar of the Oklahoma Department of Insurance in July when it was investigating fraudulent Medicare claims for Covid-19 test kits. Officials also noticed a surprisingly high number of requests for catheters.
“When we started asking seniors, they told us they had never used urinary catheters and didn’t know why the claims were there,” said Ray Walker, the assistant director of the Medicare division. Since then, he estimates at least 70 Medicare beneficiaries have filed complaints about catheter claims, one this week alone.
In Illinois, Travis Tramich said he reported four cases of possible catheter fraud to the federal health department’s inspector general after his team, the Illinois Highway Patrol, fielded more than a dozen calls from Medicare beneficiaries. The group is part of a national network that warns seniors about federal health insurance scams.
It’s not clear how the catheter companies got hold of so many people’s Medicare accounts, but Mr. Trumitch said some told him they had previously received calls asking for their Medicare ID number. Others said they had not received any calls but suspected their names were obtained through data breaches.
Suzanne Gustafson, 76, complained to Medicare last month after noticing a suspicious payment of about $4,000 made to a company in New York. She saw a similar charge on her husband’s account. And when she posted on Facebook, wanting to raise awareness, another friend reached out, saying she had been hit with a similar accusation.
Ms. Gustafson speculated that the company could have gotten its Medicare information from a data breach at a hospital he had attended in Louisville, Ky. This was not Ms. Gustafson’s first encounter with suspicious Medicare bills: Last year, she said, she was falsely billed for a coronavirus test she never ordered or received.
Ms Hennis said she did not know how her information reached Pretty in Pink Boutique. When she reported the improper billing to Medicare, she said, she was told someone had set up a second Medicare account in her name and billed the catheters to the new account.
“I hate the idea of somebody doing away with Medicare,” he said. “So many of us rely on it. It’s just morally wrong.”