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Medicare Scams - How To Make A Killing

Updated on January 30, 2015

Ever wonder why Medicare is going Broke? Let me break it down for you.

My parents both use catheters on a daily basis. Let’s take a look at just my dad’s costs. Dad caths twice a day so he gets 60 catheters per month. He also uses Betadine Swabsticks as part of the process.

The company he gets them from operates out of a small, poorly lit warehouse in the warehouse district of South West San Antonio. The Doctor faxes the Medicare information to the company once a year which consists of diagnosis, how many catheters are needed per day and why.

The company, South Texas Medical, bills Medicare and the insurance company, Tri-care, $564.48.

The package arrives once a month with a packing slip from another company, McKesson Gulf South Medical Supply. The insert lists their item numbers along with unit weights for the catheters and the Betadine swabs. No unit prices are mentioned.

Later, dad receives a Summary of the Claims Processed from Tricare showing that South Texas Medical was paid for A4352 MEDICAL AND SURGIC.

Tricare paid $83.88 and the government Medicare office paid $328.81 for a total of $412.69.

Checking on line I see I can purchase the catheters anywhere from 59 cents each to as high as 4 dollars. The swabsticks vary from $40.99 to $199 per case. A case contains 200 swabsticks.

Being a frugal shopper, I purchase the swabsticks at $40.99 and the case of catheters for $351.00. Shipping is free. My cost is $391.99. RETAIL.

I set up a company called MonkE’s Medical Supplies and ask dad’s Doctor to send the information to me. I bill Tricare 565.48 but they only pay 412.69. I make a profit of $21.

Not a problem, because I ship dad 60 each of the Betadine swabs and catheters leaving me with 240 catheters and 120 swabsticks. I’ll still be able to get paid for two more shipments at 412.69 before needing to order more Betadine swabsticks, and I’ll have 120 catheters left. So I’ll buy one more case of swabsticks to go with the next two shipments of catheters.

I’m paying 20.5 cents for swabs and 75 cents for catheters, or roughly 96 cents each for the pair. We’ll call this a unit. I’m getting paid 8.86 per unit. Shipping costs are minimal and I am operating out of my garage so overhead is low.

In ten months I spend 3919.90 plus shipping and get paid 4126.90 for a profit of 207 bucks. I spend that for shipping and break even. However, I have 2400 catheters and 1200 swabsticks in stock. So the next 10 months I’ll make $412.69 per month (minus shipping and costs). I’ll still have 1800 catheters and 600 swabsticks.

Of course, I’m a real entrepreneur so I talk to dad’s friends and the doctor and drum up enough business to pay someone else to do all the work for me while I’m sitting on the beach drinking Mai Tais and socking away a lot of cash for my retirement.

I get a wholesale licensing agreement with the manufacturers and bulk mail deal with the carrier service, and my costs are reduced to 30 cents per unit. I’m still getting 8.86 per unit and living it up in the Bahamas. Thank you Medicare!

Next week, I’ll tell you how I added multiple businesses and products using my relatives and how we all buy from each other marking up the product so that we look reasonable in our profit margins and don’t piss off any government officials. Of course the holding company gets all the profits and distributes it amongst my family members with all the benefits and security of a corporation.

Next: How to make a Killing Out of the Living, or, How to Make A Living Out of Killing - With Pharmaceuticals.

BTW, Mom and Dad paid part A Medicare out of their paychecks for over 60 years, and pay 188 each ($376) every month since they turned 65 for part B, so don't feel bad for the government.

BTW, I talked to the Medicare office and told them what was happening. I was told that Medicare leaves the decision of where the patient gets their supplies to the patient. All Medicare cares about is if the supplier is on their approved list. Getting approved is a very easy process for the supplier.


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