Medicaid Fraud Scheme Exposes Bigger Picture


Gwendolyn Wu
Staff Writer

The shoe is on the other foot now for the 23 people named as defendants in a court case involving a $6.9 million Medicaid scam. The defendants allegedly bribed patients with free footwear to undergo unneeded medical tests, which were then billed to the government.

Members of the scam, which included nine doctors, actively recruited people from homeless shelters, soup kitchens, and welfare offices to come in for unnecessary medical tests and supplies. Patients had to agree to having their feet examined and showing a valid Medicaid card in order to receive low-quality sneakers or boots. Then, physicians would diagnose the people with fake illnesses and give them unnecessary medical supplies, billing Medicaid for the processes. In an example of fraudulent charges, a chart from news blog Bensonhurst Bean showed that Medicaid would be billed for unnecessary office visits ($61.80), scans ($165.47), and custom orthotics ($331.47).

The scheme garnered nearly $7 million from Oct. 1, 2012 to Sept. 30, 2014, but it is currently unknown how long the enterprise has been around. The investigation began in July 2012, when a woman filed a report with the Brooklyn District Attorney’s Action Center, claiming that she had been approached by and visited a doctor, only to be told that she had to take a knee brace she didn’t need in order for her to receive a pair of sneakers.

Eric Vainer, 43, and his mother Polina, 66, were allegedly the heads of the scam. Vainer owned five of the clinics that procured fraudulent charges to Medicaid, and owned the warehouse producing the extra medical supplies. 

According to a press release from Brooklyn District Attorney Kenneth Thompson’s office, some of the defendants have already been arraigned on some of the 199-count indictment, and will return to court on May 19. If convicted, they could face up to 25 years in prison. 

“These defendants allegedly exploited the most vulnerable members of our society and raked in millions of dollars by doing so,” Thompson stated in the press release. “The many poor people who were allegedly targeted at homeless shelters, welfare offices and soup kitchens and referred to as ‘guinea pigs’ by the defendants were exploited for hours, if not days, just because they needed a pair of shoes. That so many doctors allegedly participated in this elaborate scheme to defraud a health care system designed to help the poor is truly disgraceful.”

How susceptible low-income individuals are to becoming participants of this scam, shows a larger problem with the homeless system in New York. Not only is it worrying to see the lengths people will go to in order to obtain seemingly basic necessities, but the public perception of what these “guinea pigs” mean to society trigger questions about how this can be avoided in the future.

“Homelessness seems to have become a rather lucrative business in New York City for the unscrupulous,” said Arnold Cohen, president and CEO of the Partnership for the Homeless in an email to The Guardian. “A change in approach is long overdue, where we focus on housing and not shelter, and strengthen community-based supports that offers quality care for those in need.”

Additionally, the vastness of this fraud scheme leaves many wondering how they can trust their physicians. If these medical professionals felt the need to draw more money from the people who pay them, perhaps they aren’t being paid enough. This was the defense of one of the defendants, who claimed he only made $10 an hour as a clinic manager to the New York Daily News. This seems shocking, considering public discourse that pegs the medical field as full of lucrative job opportunities, but if it is indeed the case that they really aren’t paid enough for what they feel like their job entitles them to, it could be worthwhile to examine why.

Gwendolyn Wu is a third year double majoring in history and sociology, and is the 2016-2017 Executive Content Editor of The Bottom Line. She grew up in the San Fernando Valley and attended Cleveland High School, and is interested in pursuing journalism as a career. When not poring over history books, she's watching Cutthroat Kitchen and mentoring first year students.