Millions In Decade-Long Military Insurance Fraud

American military veterans living overseas have for years conspired with medical providers to defraud the U.S. Department of Defense’s health care program out of more than a $100 million while the government did little to stop it.

The outrageous scam operated in the Philippines over the past decade while the government dished out millions of dollars without bothering to fully investigate the suspicious claims. In fact, Pentagon officials waited five years from the day they received fraud allegations to the day they finally cut off payments. In the meantime, the corrupt parties continued getting tens of millions of taxpayer dollars.

The widespread scheme involved dozens of physicians, hospitals and clinics and 17 people have been convicted so far. Among them are at least 12 U.S. military retirees who defrauded their government. The health care providers essentially filed claims for medical services that were never delivered and inflated bills by as much as 2,000% to share kickbacks with the military retirees.

The fraud was so rampant that the number of claims filed in the Philippines increased nearly 2,000% between 1998 and 2003 even though the number of insured veterans remained the same. The government paid nearly $211 million for overseas medical care for military personnel in 2006 and nearly $62 million went to the Philippines alone. Officials say about $40 million of that was fraudulent.

The claims are processed through Tricare, the Defense Department’s worldwide healthcare program for active duty and retired service members and their families. The Pentagon-operated program insures 9.2 million people and claims that its mission is to enhance the Department of Defense and the nation’s security by providing health support.

A Pentagon audit issued earlier this year warns that lax controls keep the insurance program extremely vulnerable to fraud and that operations similar to the one in the Philippines are emerging in Latin America. Hopefully officials won’t take five years to launch investigations.