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Medicare Fraud

Posted Feb 19 2009 5:29pm

category_bug_journal2.gif Yesterday, the San Diego Union Tribune reported that three people have been charged with Medicare fraud and identity theft to the tune of $1.3 million. The accused are a husband and wife who run a physical rehabilitation center and their accomplice, an 80-year-old woman who

“…helped recruit seniors to sign blank medical forms and turn over their Medicare beneficiary ID numbers in exchange for $100 payments…”

Early last year, after being astonished at the number of news stories about Medicare fraud that randomly popped into my inbox from various news alerts, I began keeping a running list of URLs to those stories. My so-called “research” was casual, completely unscientific. I just saved them when I happened to notice and undoubtedly missed many.

Keep that in mind as you read this dollar amount of Medicare fraud from those 2008 stories I saved: $3.83 billion.

Apparently, that number is a small drop in the bucket, as I discovered on Monday looking into Medicare fraud around the web more seriously than I had last year.

South Florida is said to be the nation’s epicenter of this fraud which has been described as “rampant.” During the past few years, R. Alexander Acosta, who is the area’s U.S. Attorney, made prosecuting Medicare fraud a priority.

”In one operation, agents set out to survey and inspect every medical equipment company listed as having taken Medicare money in Miami-Dade, Broward and Palm Beach counties - 1,581 places in all.

"’I wanted really, really tough criteria," [Acosta] said sarcastically. "One: Are they there? Two: Are they open? Three: Do they have a telephone?

"’Guess how many failed: 491,’ he said. ‘One out of three. They didn't exist.’"
- Palm Beach Post, 31 January 2009

Acosta says his office detected $1.5 billion in Medicare fraud in the past three years, but estimates the real number is closer to $8 or $10 billion. That’s just in one small corner of one state.

Estimates of annual dollar loss to Medicare fraud are hard to come by. One report, dated 1997, from the National Center for Policy Analysis then estimated $33 billion per year. Whatever the number today, and it is undoubtedly much larger and the majority of fraud goes undiscovered.

The medical device business is one of the biggest targets for fraud, but Medicare fraud takes many forms: false claims, phony prescriptions, inflated billing, billing for nonexistent services and much more. The saddest part to learn is that physicians themselves have been convicted.

However, tracking down and prosecuting miscreants pays off in a big way. In a July 2007 study [pdf], Jack Meyer, president of the Economic and Social Research Institute, reported that

”…for every dollar spent to investigate and prosecute health care fraud in civil cases, the federal government receives $15 dollars back in return.”

The oldest of the baby boomers will become eligible for Medicare in 2011, just two years from now, and Medicare is estimated to remain solvent only until 2018. Healthcare is a priority for President Obama and proposals for changes will be forthcoming, including Medicare. Whatever they are, it is obvious that fighting fraud will go a long way toward having the funds needed to reform healthcare. As Mr. Meyer noted in his report:

”With an aging population and sharply rising Medicare spending (even before the baby boomer demographic wave has hit the shore), we cannot afford a major drain on the Medicare program from fraud. Every dollar that is siphoned off from the program’s funding sources by fraudulent billing practices makes the painful choices we face in assuring Medicare’s solvency even harder.

“If fraud is not curtailed, it will be paid for by those enrolled in the program in the form of future benefit cuts and by working-age people in the form of higher taxes. Fraud will also be paid for by honest physicians, hospitals, and other healthcare providers whose rates will be further cut to help control the cost of the program. Each of these parties - seniors, taxpaying workers, and health care providers - has a financial stake in curtailing health care fraud.”

The job of enforcement is clearly up to federal authorities, but you and I can do our part too.

  1. Give out your Medicare ID number only to medical professionals who need it to bill for services delivered, and to Medicare itself

  2. Report a lost or stolen card immediately

  3. Check Medicare statements for double billing

  4. Check Medicare statements for services not provided and equipment not delivered

  5. Check Medicare statements for higher cost services and products than what was provided

There are more tips for detecting Medicare fraud here. Instructions for reporting Medicare fraud are here.

[ At The Elder Storytelling Place today, Norm Jenson has a brief, little tale entitled, Nap Time. ]

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