Hospitals Across The Nation Are Sending Medicare Fraudulent Charges

CBS- Robert McCaslin is a man of few words … but many scruples.

"Just the way I'm wired, I guess," he said. "It's just that simple."

Which is why he lost sleep over major taxpayer fraud he unearthed while working in billing at the Houston Hospital District, CBS News investigative correspondent Sharyl Attkisson reports.

"It's an attack on the whole system," he said. "Everybody that pays taxes it involved in this."

McCaslin caught the hospital billing Medicare for accident victims, even if the patient had private insurance that was supposed to pay. The hospital also billed Medicare for prisoners, even though by law, they're not covered.

When McCaslin alerted his bosses, he was surprised to discover they were in on it.

"In one of the meetings with the manager, they said 'that's just the way they did it here.' That was their procedure," he said.

It's not just a problem in Houston. Across the nation, hospitals are sending Medicare improper and fraudulent charges. It's costing taxpayers big time: nearly $11 billion a year.

The government started a pilot program and sent private auditors to comb through hospital bills in three states (California, Florida and New York), looking for Medicare rip-offs.

In one year, they were able to make hospitals pay back an astounding $247.4 million. That's in just three states.

The audits are supposed to expand to all 50 states in March.