How 'Pretty in Pink' helps explain an alleged $2 billion Medicare fraud
But the Molly Ringwald movie is off the hook.
We scooped on Friday that the FBI and other agencies are investigating an apparent ring of companies in what’s alleged to be one of the largest cases of Medicare fraud in history.
More in The Washington Post from me, Lauren Weber and Dan Keating.
Seven companies have submitted hundreds of thousands of bills to Medicare — using real patient data — asking the government to reimburse them roughly $2 billion for intermittent urinary catheters, according to an analysis that a group of health-care experts shared with The Post.
(If you’re a person who’s never contemplated the term “intermittent urinary catheter,” these are low-cost devices that people use to help drain their bladders if they’re incontinent. A patient can go through dozens of these devices each week.)
But as Lauren, DK and I wrote at The Post, there’s no evidence that any of these patients wanted these catheters. There’s no evidence that any patient received them.
And the companies themselves are highly unusual, after they emerged to become major players in the niche field of intermittent urinary catheters almost overnight. They share some links, such as a matching address and staff in several cases.
In total, the companies billed Medicare for more than $2 billion in catheter claims, using data linked to more than 400,000 patients, according to an analysis by the National Association of Accountable Care Organizations, a group that represents hundreds of medical practices and hospitals.
Several NAACOS members walked me through how they detected the spike in urinary catheter bills — which began with a trickle in late 2022 and became a flood of bills in 2023 — and why they’re so worried.1 The group had brought this to federal officials’ attention last year.
I also spoke with Aledade, a network of independent primary care providers, which conducted a similar analysis that backed up what NAACOS found.
It’s an eye-popping amount of alleged fraud; for context, the FBI a few years ago crowed that a $1 billion Medicare fraud bust was among its largest in history.
And while the FBI and other agencies said they could neither confirm nor deny that they were probing the catheter bills, six people — three officials with knowledge, and three people who said they’d been contacted by the FBI — told us about the federal investigation. We also tracked down people who had been involved with the companies before the billing spike began, and others who had been ensnared in the apparent scheme.
You’ll see that story here online — for free!2 — and on the front page of Saturday’s print Washington Post.
I thought it might be interesting to talk about the journalism process here, having received a few DMs and texts from folks asking how the piece came together.
First, we got the story thanks to a tip from NAACOS, which decided to share their analysis with several news organizations after feeling rebuffed by federal officials.
As a reporter, there’s a different calculus when you know competitors have the same tip as you — it forces you to wrestle with trade-offs. Can you write the first story? If not, can you still write the best story? If you can’t do that, is it even worth writing a story?
(You’ll have to be the judge of whether our efforts were well-spent.)
Second, when pursuing an investigative story like this one — and especially when racing other outlets3 — we tried to strategize upfront about how to maximize our time and our team.
A good investigative story is like assembling a puzzle, and a true pleasure of working at The Post is that so many colleagues know how to find and put together different pieces. Lauren Weber is a digger who inhales public records and exhales names, dates and other leads. Dan Keating is an expert at interpreting data sets, spotting trends and crafting graphics. (In theory, I do something too.)
In addition to the stuff that we each individually focused on, the three of us spent all week trading ideas, checking each other’s analysis and backstopping the reporting. We’d already worked together on a big investigative piece last year, focused on the politics of life expectancy, and that familiarity definitely helped.
And third, perhaps most subjective, is the art of writing a story like this one.
It’s no secret that terms like “urinary catheters” and “Medicare claims” can scare off many readers, even from what we thought was a big scoop.
So we tried to think hard about what might draw folks into a technical story about Medicare fraud, and that’s why we landed on this lede — a look at some unexpected, inadvertent victims who were trying to understand what had happened, too.
The first angry calls to the Pretty in Pink Boutique began last August, confusing staff at the Franklin, Tenn., provider of wigs, mastectomy bras and other accessories for cancer patients. Medicare recipients from around the country claimed that a company called Pretty in Pink had charged their health insurance companies thousands of dollars for urinary catheters that they never ordered or received.
Flooded by dozens of complaints, the boutique launched a webpage in September to explain that its leaders were dumbfounded, too.
“We have reported the calls we are receiving to Medicare, and we have been working with callers to try to figure out exactly who is filing these claims,” Pretty in Pink’s website reads, asserting that another company by the same name was submitting the claims, and offering instructions on how to report the fraud to federal officials and insurance companies. “FRAUDULENT CLAIMS ARE BAD FOR ALL OF US, AND WE ARE ON YOUR SIDE.”
Of course, the Pretty in Pink cancer boutique in Tennessee is just one small corner of a tale about seven other companies billing Medicare for $2 billion.
So Lauren tracked down a more central figure — the former owner of the other Pretty in Pink — who had a fascinating story to tell, too.
Erika Tavarez said she has had a front-row seat to the allegedly fraudulent activity: She used to own the Pretty in Pink company that has since been linked to fraud allegations.
The durable medical equipment company specialized in prostheses for breast cancer survivors and operated from El Paso. Tavarez said she sold it last summer for $50,000.
Then, she said, people began sending her angry emails that called her a fraud, and FBI agents arrived to ask her questions about urinary catheters — a product that she said she’d never offered to patients, but that her former company was now billing to Medicare.
“It’s been really stressful and sad,” Tavarez said, adding that she has learned the fraudulent claims began while she was negotiating to sell her business. “People think it’s me.”
Just to underscore that: Tavarez said she sold her company last year for $50,000.
It’s since been linked to more than $260 million of catheter bills, per NAACOS.
More to come on this.
Accountable care organizations are responsible for a dedicated group of patients, and they operate under federal incentives designed to reward them for delivering high-cost, high-quality health care.
But if the government judges that an ACO’s patients spent too much money — like the apparent spike in catheter bills, even if no patients actually wanted or used them — the ACO itself could be on the hook for penalties. ACO leaders told me they feared that the catheter bill spike could lead to penalties of $1 million or more for some organizations.
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