Medicaid and Medicare Fraud Describe Health News

Medicaid and Medicare Fraud

Describe health news story combating health care fraud Medicare Medicaid• Examine evaluate corporate structure governance, culture, focus social responsibility • Recommends

Medicare and Medicaid fraud: An overview

Medicare and Medicaid fraud: An overview

While there is still little consensus regarding the best ways to go about enacting healthcare reform, one issue that unites both Democrats and Republicans is the need to eliminate Medicaid and Medicare waste, fraud and abuse. According to a 2009 CBS News report: "One tiny pharmacy in a Hialeah [Florida] strip mall went from billing Medicare $13,000 in May to billing nearly a million dollars a month later," and regulators took no notice (Rosen & Bach 2009:1). It has been estimated by the Federal Bureau of Investigation (FBI) the fraudulent billings to public and private health care programs are 3 -- 10% of total health spending, $75 -- $250 billion per year on average, and that is only the fraud that is currently known (Morris 2009: 1351). Although federal authorities have tried to grow more vigilant, health care fraud is becoming increasingly difficult to detect. Approximately $60 billion of the total costs of healthcare fraud have been linked to Medicaid and Medicare, at direct cost to taxpayers (Taitsman 2011). "Since 1990, the Government Accountability Office (GAO) has designated Medicare as a high-risk federal program because its vast size and complexity make it vulnerable to fraud, waste, and abuse" (Iglehart 2010).

This fraud is perpetrated not only by unscrupulous patients and criminals, but also by physicians. One manufacturer of a prostate-cancer drug, for example, told urologists that they could bill Medicare for the free samples "though federal law prohibits physicians both from billing for free samples…Several urologists ended up paying tens of thousands of dollars in penalties for participating in the manufacturer's plan" (Taitsman 2011). Undeterred by fines, professional sanctions, or even civil or criminal legal system, physicians every year are found guilty of "accepting kickbacks, upcoding bills, or making improper self-referrals" (Taitsman 2011). When physicians are found guilty of such crimes, patients suffer. Many doctors are already reluctant to take patients under the government-provided public insurance plans of Medicaid and Medicare, particularly Medicaid, given that its reimbursement rates tend to be quite low, compared with private insurance and even Medicare. Yet "more than 5000 physicians are currently excluded from participation in the federal health care programs because of these types of violations and cannot treat any of the approximately 100 million Medicare and Medicaid beneficiaries" (Taitsman 2011). Some doctors may even engage in fraudulent activities because they believe they are 'owed' more for their Medicare and Medicaid services, due to lower rates of reimbursement.

While some physicians engage in fraud out of greed, others do so out of ignorance. There is little education for physicians in the administrative aspects of negotiating the often complex aspects of government insurance programs. Only 44% of deans and 2/3rds of administrators at medical schools and medical residency programs "reported that their institutions provide at least some training on fraud and abuse for students, residents, or fellows" (Taitsman 2011). There is also little consistency regarding the quality of education within programs regarding Medicaid and Medicare law. The Office of Inspector General (OIG) of the Department of Health and Human Services has created a document for new physicians entitled "A roadmap for new physicians: Avoiding Medicare and Medicaid fraud and abuse," summarizing the major acts of legislation with which they should be familiar, such as False Claims Act, the Anti-Kickback Statute, and the Stark Law (Taitsman 2011).

It is not only doctors who are unwittingly or knowingly complicit in fraud. City of Angels Medical Center in Los Angeles, California actually "recruited homeless people off the street to fill their empty beds, offering them cash and drugs plus clean sheets and three square meals a day, while billing Medicare tens of millions of dollars for their stay" (Taitsman 2011). The recently passed Affordable Care Act (ACA) attempts to enable a more "rigorous crackdown on illegal activities that plague Medicare, Medicaid, and private insurers" (Iglehart 2010). Some of the most dangerous aspects of fraud are those which involve professional criminals and organized criminal networks according to the FBI (Iglehart 2010). Not all criminals involved in Medicare and Medicaid fraud are criminal 'masterminds,' however. Said one petty criminal, who ran a dummy medical supply company ostensibly providing reimbursable, expensive equipment to Medicare patients: "You're wakin' up every day makin' $20,000, $30,000, $40,000…you're like 'Wow I just won the lottery" (Rosen & Bach 2009:2). His offices served no patients, but merely submitted false claim forms to Medicare.

Greater oversight is clearly needed of these unwieldy government programs. Regarding Medicare, the solution would seem to be additional federal oversight of the program. Medicare is a complex program, given that seniors are often covered by multiple insurance systems, in addition to Medicare, such as an original private insurer. Recent changes in prescription drug laws have rendered the program even more complex in nature. "According to the FBI, all you have to do to get into this business is rent a cheap storefront office, find or create a front man to get an occupational license, bribe a doctor or forge a prescription pad, and obtain the names and ID numbers of legitimate Medicare patients you can bill the phony charges" (Rosen & Bach 2009:2). When Medicare sends someone to investigate the suspect claims, it is often very easy for thieves to simply shut down shop and move to a new office. One elderly woman who saw suspect explanations of benefits, for devices and treatments she never ordered contacted Medicare, but she reported there was no follow-up. "I continued to report and I kept saying, 'Can't you flag my account? You know, I'm not getting any equipment or supplies. Nothing,'" for six years, she told CBS News (Rosen & Bach 2009:3).