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July 2017

Greed and Fraud vs. Medicare: How a Few Changes Could Help the Government Fraud Fight

Washington Watch


Warning: This story may raise your blood pressure. For sure, it raises troubling questions about the U.S. government's ability to manage a medical bureaucracy.


Medicare, the government insurance program that provides health care to 55 million elderly and disabled Americans, continues to provide a steady income stream for criminals who are regularly finding innovative ways to steal a good sized chunk of the half-trillion dollars that are paid out annually by the program.


This comes despite strong efforts by health investigators and Justice Department prosecutors to crack down on fraud against Medicare. Some efforts to change things are brewing on Capitol Hill as well as a big recent move by Medicare.


The numbers are staggering since health care is a tempting target for crooks. Medicaid, the federal-state program for low-income adults, children, elderly adults and people with disabilities, spends $545.1 billion a year. Medicare spends $646.2 billion, both using 2015 numbers, the latest available. Total health spending in America is a massive $3.2 trillion, or $17.8 of the Gross National Product.


No one knows for sure how much of that is embezzled. But the best estimate came out in 2012, when Donald Berwick, a former head of the Centers for Medicare and Medicaid Services (CMS), and Andrew Hackbarth of the RAND Corporation, calculated that fraud – and the extra rules and inspections required to fight it – added as much as $98 billion, or roughly 10%, to annual Medicare and Medicaid spending and up to $272 billion across the entire health system.


The Government Accountability Office (GAO) estimated that in 2014, $60 billion of American taxpayer money, or more than 10 percent of Medicare's total budget, was lost to fraud, waste, abuse and improper payments.


All You Need Is Greed – And a Few Facts


In most cases, what is needed to defraud someone are the names and IDs of legitimate Medicare patients, including people's names, Social Security numbers, addresses and dates of birth so scammers can bill Medicare for services that never occurred.


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Kneedy People!


As soon as Mary Ellen made plans for our last vacation, I made an appointment with the orthopedist. My left knee was killing me and I didn't want to be a drag on our daily activities. My knee problem goes back to an old football injury in college – I was drunk and fell out of the stands during Homecoming.


When I arrived at my appointment, I asked why my former doctor had unexpectedly retired. The receptionist said he wanted to devote more time to running triathlons and skiing, which is really nice for him but for the patients who were scheduled for knee surgery, this is kind of rubbing it in.


My new doctor said he needed to take a few pictures of my knee. I told him that wouldn’t be necessary and showed him some great shots of myself in Bermuda shorts on my iPhone from our recent New Orleans trip. But X-rays were still required. They clearly showed the reason for my discomfort and surgery would be my only option for relief.


"Dick," said Dr. Estes, "I understand you and your wife are going on vacation. Not too strenuous, I hope, considering your knee."


"She wants to go to Canada and go hiking."


"Sounds a bit rocky to me.”


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