The Miami area is one of the most expensive places in the nation for treating Medicare patients and one of the reasons is that it is plagued by Medicare fraud, says the CEO of Miami’s largest nonpublic health provider.

Brian Keeley is the president and CEO of Baptist Health South Florida, a nonprofit with five hospitals totaling 1,590 beds and numerous outpatient centers, which employs nearly 12,500 people.

Medicare costs in Miami are $16,351—almost double the national average.

Couple those costs with $2.5 billion in annual Medicare fraud in South Florida, according to the Centers for Medicaid and Medicare Services, and it’s easier to see the root of the problem.

All too frequently, clinics are set up without any legitimate operations and start billing Medicare for services never performed. Since 2007, a federal strike force has obtained indictments against parties that billed Medicare more than $600 million in South Florida.

“If I was head of AHCA (Florida’s Agency for Health Care Administration) I would survey all the vendors,” Keeley said. “Most fraud and abuse occurs in these mom-and-pop companies. I’d visit every one and see if they have a legitimate business.”

Another factor contributing to the costs is a shortage of primary-care physicians. Their reimbursement is so low that many choose to practice elsewhere or move into a specialization. With the scarcity of primary-care physicians, many patients choose to visit specialists, who often opt for the most expensive treatments.

“The costs are driven by physicians,” Keeley said. “Everything that occurs in a hospital is ordered by a physician. Since there are more specialists, they order more tests and procedures.”

This problem won’t be solved until Medicare and private insurance starts paying primary-care physicians better, he said.

Physicians in South Florida also order nonessential tests because they’re afraid of malpractice lawsuits, Keeley said. So-called defensive medicine is especially common because South Florida has a high rate of malpractice lawsuit. The American Tort Reform Association labels it the No. 2 “judicial hellhole” in the country.

To help ease that burden, Keeley supports stronger tort-reform laws in Florida and across the nation.