Sellers of wheelchairs, drugs and other medical supplies collected as much as $93 million in fraudulent claims based on prescriptions from doctors who were dead, some for 10 years or more, a congressional investigation has found.

Dead doctors getting rich from a very generous, but stupid Medicare system! Aren’t you proud to be an American?

The U.S. Medicare system is this weeks winner of The Lang Report’s “Golden Fleece Award.”

The bipartisan report by the Senate Homeland Security investigations subcommittee reviewed millions of reimbursement claims for medical equipment and supplies from 2000 through 2007. It found that Medicare paid out between $60.3 million to $92.8 million to medical suppliers even though they involved claims in which the prescribing doctor listed had been dead for at least 12 months.

In Florida, more than $2 million alone was paid to medical suppliers from 2002 to 2007 for equipment such as oxygen machines, prosthetics and diabetic equipment that claimed to have prescriptions from 114 deceased doctors.

In all, about 7 percent of all deceased doctors and 27 percent of dead doctors in Florida still had active Medicare ID codes that could be used improperly to seek reimbursement.

Medicare fraud is a billion-dollar-a-year problem in South Florida. A 2007 federal report found that one-third of the companies that billed Medicare were not even open at the time. Prosecutors have arrested the owners of 150 firms for fraud, some topping $100 million each.

“We discovered that some medical equipment suppliers have scammed the Medicare system — and the American taxpayers — out of massive amounts of money,” Sen. Norm Coleman (Minn.), the panel’s top Republican, said in a statement. “Using the ID numbers of dead doctors, these scam artists have treated Medicare like an ATM machine, drawing money out of the government’s account with little fear of getting caught.”

The report is part of the committee’s ongoing investigations into waste, fraud and abuse in the fast-growing federal health program, which serves more than 43 million elderly and disabled Americans. Medicare pays annually more than $400 billion in benefits and is a fixture on the Government Accountability Office’s “high-risk” list of troubled programs.

Last year, the government established a Medicare Fraud Strike Force to crack down on a problem that officials estimate costs taxpayers tens of billions of dollars annually. The program’s durable medical equipment component, in particular, has been a frequent target of companies seeking to bilk the government. The subcommittee has scheduled a hearing on the problem today. When the system works properly, a physician writes a prescription for home medical equipment for a Medicare beneficiary. He takes the order to a supplier, who sells or rents the equipment to him. The supplier, in turn, submits a claim for payment to a Medicare contractor for processing. The claim includes a number issued by Medicare that identifies the prescribing physician.

Senate investigators obtained from the American Medical Association a computer file of physicians who had died between 1992 and 2002. They selected 1,500 at random and asked Medicare officials to turn over medical-equipment claims filed with those doctors’ Medicare ID numbers between 2000 and 2007.

During that time, the review said, ID numbers for 734 deceased doctors were used to file 21,458 claims that totaled $3.4 million. Investigators counted the claims only if the equipment was bought more than a year after the doctor’s death.

Extrapolating from the sample, investigators estimate that 384,730 to 572,238 such fraudulent claims were submitted during that period, and Medicare paid an estimated $60 million to $92 million. There are still active ID numbers in Medicare’s system for as many as 2,895 dead physicians, investigators said.

They examined separate data for Florida, home to many retirees and a perennial leader in Medicare fraud. They found that more than a quarter of deceased Medicare doctors there still have active ID numbers in Medicare’s system.

The ID for one doctor, who died in 1999, appeared on 83 claims submitted by Professional Gluco Services Inc., a Miami company, between November 2005 and September 2006. A federal grand jury indicted two of the company’s owners last year on charges of defrauding the government of $1.3 million for equipment that had never been ordered or delivered. Both men pleaded guilty.

Medicare officials had promised to do a better job screening claims after the 2001 inspector general’s report found that the agency had paid $91 million for medical supply claims with invalid or inactive physician ID numbers in 1999.

Medicare officials said several new steps should help, including a plan to match monthly Social Security Administration data about U.S. deaths against a revamped Medicare provider-identification system. They also pointed to new accreditation requirements for suppliers under a new program, opposed by the industry, that sets some equipment prices through competitive bidding.

“Fraud and abuse in the context of Medicare-covered durable medical equipment has been a focal point of ours in recent years,” said CMS spokesman Jeff Nelligan. “Before this program, anyone could become a supplier, but now they must be fully accredited based on strict financial and quality standards.”