Feds Crapping Away Health $ and Increasing Deficit

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GAO (Government Accountability Office) will release a report today on the failings of the fraud and abuse system for Medicaid or Medicare. The study was requested by Massachusetts Senator Scott Brown (R) and Delaware Senator Thomas Carper (D).

money next to toilet

From the AP story this morning:

The federal government’s systems for analyzing Medicare and Medicaid data for possible fraud are inadequate and underused, making it more difficult to detect the billions of dollars in fraudulent claims paid out each year, according to a report released Tuesday.

The Government Accountability Office report said the systems don’t even include Medicaid data. Furthermore, 639 analysts were supposed to have been trained to use the system — yet only 41 have been so far, it said.

The Centers for Medicare and Medicaid Services — which administer the taxpayer-funded health care programs for the elderly, poor and disabled — lacks plans to finish the systems projected to save $21 billion. The technology is crucial to making a dent in the $60 billion to $90 billion in fraudulent claims paid out each year.

GAO has released numerous reports on this issue, and has identified Medicare fraud for the last 22 years as one of the federal programs  (and now Medicaid) most at risk for fraud.

Locally, Professor Malcolm Sparrow of the Harvard Kennedy School wrote a fascinating book on the topic in 2000, and proposed some innovative solutions modeled after the credit card industry, titled License To Steal: How Fraud Bleeds America’s Health Care System.

More recently, Michael Cannon of the CATO Institute had a great piece in the National Review, highlighting some recent cases of fraud/abuse and discussing the reasons why the incentives won’t change until the federal government fundamentally reforms the programs.

Consider some of the fraud schemes discovered in recent years. In Brooklyn, a dentist billed taxpayers for nearly 1,000 procedures in a single day. A Houston doctor with a criminal record took her Medicare billings from zero to $11.6 million in one year; federal agents shut down her clinic but did not charge her with a crime. A high-school dropout, armed with only a laptop computer, submitted more than 140,000 bogus Medicare claims, collecting $105 million. A health plan settled a Medicaid-fraud case in Florida for $138 million. The giant hospital chain Columbia/HCA paid $1.7 billion in fines and pled guilty to more than a dozen felonies related to bribing doctors to help it tap Medicare funds and exaggerating the amount of care delivered to Medicare patients…. And a study of ten states uncovered $27 million in Medicare payments to dead patients.

Fraud and abuse detection in the Medicaid and Medicare programs is one of the few issues today that brings together Republicans and Democrats and could save tens of billions every year. It is sad that the federal government is proving to be completely incompetent on this front, and has added trillions over the years to the national debt, making the deficit talks that much harder this week.