Judge takes notice in Medicare scandal.

Byline: John Dorschner

May 10--In four months last year, 21,000 seniors in Miami-Dade suddenly needed artificial legs or arms.

Medicare paid the bill: $122 million.

When federal prosecutors heard from seniors that they didn't need and hadn't received new limbs, they investigated and filed a civil suit against the 48 small businesses and the billing agency that had submitted the claims.

Medicare fraud cases are nothing new in South Florida, but in this case something unusual happened. A judge looked at the case and asked a question: Why had the government paid out so much for 21,000 sudden amputees in one location? "Common sense dictates this is an impossibility," U.S. District Judge Cecilia M. Altonaga wrote.

The company that paid the bills is Palmetto GBA, a South Carolina firm hired by the government to process Medicare claims. Since Medicare began in the 1960s, the government has contracted with private firms to pay the claims, on the theory that they could do it more efficiently than the bureaucrats.

Palmetto GBA, for Government Benefits Administrator, processes more than 110 million Medicare claims a year, which totaled almost $25 billion in 2004. In addition to paying claims, Palmetto acts as the government's watchdog nationwide to make certain that claims for durable medical equipment, such as artificial legs and power wheelchairs, are legitimate.