Roughly 10% of total Medicare spending can be blamed on fraud.
Michael Cannon from The Cato Institute reported on this at Townhall:

Medicare and Medicaid are rife with fraud. We’re talking 10 percent or more of total spending, which is two orders of magnitude more than what credit card companies tolerate.

In a recent article, I explained a couple of ways such fraud occurs:

For providers, Medicare is like an ATM: So long as they punch in the right numbers, out comes the cash. To get an idea of the potential for fraud, imagine 1.2 million providers punching 1,000 codes each into their own personal ATMs. Now imagine trying to monitor all those ATMs.

For example, if a medical-equipment supplier punches in a code for a power wheelchair, how can the government be sure the company didn’t actually provide a manual wheelchair and pocket the difference? About $400 million of the…fines paid by Columbia/HCA hospitals were for a similar practice, known as “upcoding.”…

Yet federal and state anti-fraud efforts remain uniformly lame. Medicare does almost nothing to detect or fight fraud until the fraudulent payments are already out the door, a strategy experts deride as “pay and chase.” Even then, Medicare reviews fewer than 5 percent of all claims filed.

Cannon posted this video on the subject of Medicare-Medicaid fraud recently. Fixing the problem won’t be easy:

 

 

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  1. government waste is democrat gravy. the democrats will never take effective measures to control waste.

  2. AMAZING!!!!!!!!!!!!! The things he should do; he doesn’t. The things he shouldn’t do; he does. Down is up and up is down with this administration. WAKE UP AMERICA before it is too late.

  3. This is why government programs never work. There is no incentive to do good.

    A business is constantly going over expenditures to detect “stuff we don’t need”. Profits are more about controlling expenses than anything else. It doesn’t do much good to double your gross profit and then turn around and blow it all on junk you don’t need. In government you just ask for a bigger budget.

  4. Jim, I would be extremely surprised if fraud accounts for a mere 10% of the amount we spend on Medicaid and Medicare. I personally know of four different, truly egregious cases of outright fraud, only one of which was ever prosecuted to my knowledge.

    Perhaps the worst occurred in a small town in Massachusetts in the mid-late 1980′s, though I am sure it had gone on for years before I discovered it. This little town had been utterly devastated when all of the factories closed and moved south in the late 70′s. Over half of all the schoolchildren in town received free school lunch, which of course means they were also on Medicaid.

    One of my neighbors was a young woman not yet 21 years old who had just had her third child. As we were talking one day I asked her why she wasn’t on birth control pills. She told me that Medicaid didn’t pay for birth control pills. Well, yes they did. Yes, they still do. So, I proved it to her. We called the Medicaid approval line in Boston and got it straight from the horse’s mouth. Absolutely Medicaid pays for birth control- much cheaper than paying for a baby after all! When I asked the young woman who had told her that Medicaid didn’t pay for birth control, she assured me that the only pharmacist in town (actually the only pharmacist in 10 miles or so, no public transportation) told her that. She only took birth control pills when she could squeeze the $26 a month out of her budget, which wasn’t often. (Funny, the price hasn’t changed a bit in all these years!)

    I’m not from Missouri, but I am one of those “show me” kind of people, so we walked up to the pharmacist, where I had the young woman ask to have her birth control prescription filled and then present her Medicaid card instead of cash. Lo and behold, that pharmacist did indeed stand right there and tell her in no uncertain terms that Medicaid didn’t pay for birth control and if she wanted her pills she was going to have to fork over $26. As it turned out, this “pharmacist” had himself a great con going with his captive audience: he collected every month for hundreds of prescriptions for birth control from Medicaid and then he made those who actually got their prescriptions filled pony up $26 to boot.

    Obviously, I no longer had any questions about just why 7 or 8 local high school students were pregnant that summer or why girls not yet 21 might already have 3 children.

    The thing is, if Medicaid had just ONCE sent out a quarterly or semi-annual statement to their clients outlining the services Medicaid had been billed for and asking if they had actually received them this could have been nipped in the bud.

  5. Wait wasn’t this how they were supposed to make up all the money that was to pay for ObamaSCare……well throw that turd out the window……..just another “fail” on Onumb-nutz resume of life………

  6. Up coding is a real practice and serious transgressors can be fined and loose their license.
    BUT the implementation of sentence gets appealed to the state judiciary where it can take 4-5 years to resolve.
    Punishment is the way toward compliance. If neither the state nor fed is interested ripoffs continue

  7. wasn’t one of the ways the myth was going to pay for obamacare eliminating medicare fraud. the myth can talk out of both sides of his mouth and nobody in american tass will say a word. i guess if want to destroy the country why eliminate fraud.

  8. Cloward Piven, anyone?

  9. If the government offered rewards for information regarding waste, fraud, and mismanagement we’d see such waste decline. But the government doesn’t care. You can bet the politicians make a fortune out of this.

  10. Every decision that the commies make is political calculus.
    For 3 years, they have been overwhelming the system with all the executive orders, bad policy, and dictates that the courts and congress can’t possibly keep up. That is why the figurehead (SCOAMF) wants the “bill passed now” and “we don’t have time to wait”. Any fraud, waste, or abuse is of no consequence to them- ignore it and the MSM dutifully won’t report it. The New Media is doing a great job trying to keep up with all this sh*t, but I wonder if it is enough.

    I hear crickets from the GOP- I am beginning to wonder if they are in it too. If they think that for a second that the public will go along with just having “their guys” run all these ridiculous programs and agencies without scaling their scope back or cutting their budgets, they are sadly mistaken. But what to expect from the party of stupid?

  11. I can state with confidence that the topic of Medicare fraud is one that physicians need to start addressing due to the fact that the federal government has a task force specifically created to hunt down physicians that bill incorrectly. I have attended seminars given by other attorneys that have defended physicians after being “busted” for unintentionally upcoding.

    These federal task forces are a significant income generator for the federal government. Why? Because when a Medicare auditor comes to a medical practice and finds billing problems (that they always can), the auditor will threaten the physician with significant criminal penalties. In an effort to get out of the criminal penalties, physicians agree very quickly to pay sizable (several hundred thousand dollars per doctor) civil penalties in order to have the auditor not push the criminal case.

    It’s actually much worse than it sounds.
    _________________________

    The employee starts doing the math and figures out that the bigger the fine the better. Then after fully cooperating with the federal agent, the fine ends up being $1,000,000. The physician does not have $1 million and has no insurance, and therefore has to cash in his/her brokerage account or 401k plan to pay the fine (which is not tax deductible). The employee is black balled in town, but doesn’t really care because she ended up with a reward of $170,000.

    If the above scenario doesn’t scare you, nothing will.

    With all the potential problems of Medicare fraud, where does that leave physicians? Unfortunately like an ostrich with their heads in the sand or with the “It’s not going to happen to me” syndrome.

    http://www.physiciansnews.com/finance/705.html

    read more @ site.

  12. Isn’t the whole point of the Medical Community takeover to bleed the taxpayers? Why stop FRAUD, since this is the Bottom Line!

    Vladimir Lenin: “Socialized Medicine is the Keystone to the Arch of the Socialist State.”

    http://im1.shutterfly.com/media/47a1cf00b3127ccefeff2f69492400000030O02CbMmTVu0aA9vPgg/cC/f%3D0/ps%3D50/r%3D0/rx%3D550/ry%3D400/

  13. In Pennsylvania, at least, they starting auditing 2010 claims in 2011 and often mixed them up on the same page with 2011 charges. For the first time I stopped checking claims since they were impossible to organize easily. To top it off, most were in the deductibility stage of the year when people pay attention to charges.. Oh, yes, I owe my provider $8.09 for 2010. It isn’t worth the time to change it: their office average, 3 hours for each audited claim.

  14. Greetings and Salutations…
    yea, fraud has always been a problem, and will be as long as there are greedy people out there, or as long as the health care system in America is a “for profit” enterprise. For you folks that have been heaping abuse on Pres. Obama’s administration for it… please read #6, Granny’s post. Then, remember that Ronald Reagan was president throughout the 80s, so this sort of thing happened under his, Republican, watch. Fraud is not limited to one party…it is universal.
    For all you folks that read these stories and post using such antiquated terms as “commies” – Get with reality! This is not the 70s. The Cold War is LONG over, and America is not the powerhouse it was during that period. If all of us that insist on doing nothing but hurling insults at the government continue doing this, America WILL become a third-world nation. And, if you think things suck here now, wait until THAT happens!
    pleasant dreams
    dave mundt

  15. Ho YO Silver ! Big government rides again. The Lone Marxist is taking us over the cliff, and does not care one bit. There is no claim mamagement process in Obamacare. As more of this becomes evident – the solution will be to hire more people without finding out the root cause as to why this is an ATM to fraudsters.

    Welcome to the UK, where 60 years later healthcare administration is the third largest employer in the entire UK.

    Had enough of these creeps?

  16. It has to be ten years ago now (at least) that I was cleaning out boxes of old magazines. There was a an old Readers Digest that I came across that was at least twenty years old then. One of its headline stories was how bad Medicaid fraud had become. Now thirty years after the article was penned nothing, nothing, nothing has changed. Politicians come and politicians go, whole armies of bureaucrats grow old in their careers and retire, but government waste and fraud continue apace. Who says there is no such thing as perpetual motion?

  17. Thanks for the concrete example of how fraud can play out. I suspect there are a lot people who find nebulous charges that “fraud is rampant” very unconvincing. It makes us sound like we’re just reactionaries. The wheel chair example was a powerful tool…and it’s one I’ll be using in future conversations.



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