US military health insurance fraud continues in Philippines, say retirees

Moncada - The clinic where Dr. Alberto Marzan allegedly played his role in a US$100 million (¤64.12 million) swindle of the U.S. military's health insurance program sits abandoned, along with the adjacent family home.

But a legacy remains, with a U.S. Navy retiree saying scams are still rife even after a federal judge ordered a Philippines company to pay back the money it skimmed.

Health Visions Corp., which pleaded guilty to mail fraud, was ordered to liquidate all assets within 10 months and give the proceeds to the U.S. government. Federal prosecutors say the company bilked the military's Tricare program out of US$99.9 million (¤63 million) from 1998-2004. The program insures 9.2 million active and retired U.S. servicemen and dependents worldwide.

The company routinely inflated claims by more than 230 percent, operated a phony insurance program, and billed for medical services never delivered, court records showed, as the Pentagon moved slowly to uncover the scheme.

Assistant U.S. Attorney Peter Jarosz described Health Visions as the biggest violator yet in a long-running investigation into Tricare fraud in the Philippines.

Marzan, one of the longest-wanted fugitives in the probe, recruited dozens of military retirees to falsely claim they and their relatives were confined at his clinic and received expensive medical services, U.S. prosecutors say.

He made fraudulent claims of US$1.5 million (¤1 million) to the program and was paid more than US$1 million (¤640,000), prosecutors add. In return, he typically paid kickbacks to the retirees.
A U.S. federal grand jury returned a 35-count indictment against Marzan in 1999, but he has apparently remained free in the Philippines after vanishing from Moncada.

Neighbors, village leaders, police and former co-workers in the Moncada town hall, where he used to sit as councilor, say the doctor's family slipped out of town more than three years ago and remains underground.

Claro de Castro, head of the National Bureau of Investigation's Interpol division, said his office has arrest warrants for a doctor and a beneficiary. But he refused to identify them or say if the wanted doctor was Marzan because agents are still working on the case.

Jerry Minor, a Navy retiree and administrator of Lifeline Medical Center _ a Tricare-accredited clinic in western Olongapo city near the former U.S.-run Subic Naval Base _ said many accredited doctors and clinics in the city continue to overprice their services.

Retirees are usually lured into the scheme because the clinics do not charge them the required 25 percent share of the cost, instead sending the whole bill to Tricare, Minor said.

One clinic blacklisted by Tricare for fraudulent claims simply changed its name and is back in business, he told The Associated Press in an interview Friday.

Minor said a retiree's wife who was convinced by a clinic four years ago to sign a stack of blank claim forms _ one is filled out every time a beneficiary goes to a clinic _ was shocked to find out last December that several women were collecting on claims using her details.

«It was like signing a blank check,» he added.
He said he tried to find out for himself about the overpricing by going to a doctor, who told him he would be charged 850 pesos (US$20; ¤12.82) for a 15-minute consultation. The price was higher than the 500 peso (US$12; ¤7.7) fee per consultation under Tricare regulations.

Minor said when he brought up his share of the cost, the doctor told him, «Don't worry about it, you pay nothing. Tricare does.

He said he has reported the anomalies to Tricare officials but the scams continue.

Vicky Gross, a retiree's widow who used to work for Health Visions, said many doctors and clinics don't charge beneficiaries their share of costs but she did not know what they were charging to Tricare.

Austin Camacho, a spokesman for the Pentagon's Tricare Management Activity, said the program has implemented new controls to combat fraud in the Philippines in recent years. Among other things, the program looks for patterns of aberrant practices and reviews claims that appear excessive.

In 2001-07, the program refused to pay US$288 million (¤185 million) in

fraudulent or excessive claims from the country, he said.

Still, he said it is hard to catch all fraud overseas and Tricare does not exclude providers «without sufficient evidence.

«This can be difficult in an environment where law enforcement resources are limited, providers are not always cooperative and are not subject to the U.S. government's subpoena power,» he said.

Rufino Bayao Jr., a Navy retiree who served a 1.5-year U.S. prison term and three years of probation for taking part in the scam with Marzan, advises retirees not to fall for the bait.

«If they are caught, they will also suffer,» he told AP in his home in northern Tayug town. «It's not worth it.

Aside from the prison term, Buyao is having more than a third of his US$800 (¤513) monthly pension deducted to pay for US$132,390 (¤84,887) in restitution that a U.S. court ordered him to pay.

He says he got only 200,000 pesos (US$4,760; ¤3,052) from Marzan for signing false claims, with much of the money going for drinking binges. Associated Press writer Ryan J. Foley in Madison, Wisconsin, contributed to this report.