NCPA - National Center for Policy Analysis

Defrauding Medicare And Medicaid With Ease

November 3, 1995

One estimate states that fraud and abuse cost Medicare and Medicaid about $33 billion each year. Worse, it's ridiculously easy to cheat the federal government and taxpayers out of millions of Medicare and Medicaid dollars, according to three convicted felons appearing yesterday before a Senate panel.

  • One witness described how she acquired $7 million by charging $5 to $7 for gauze surgical dressings that cost a penny each.
  • A former nightclub owner revealed that he made millions after he obtained a Medicare license - without a background check - and proceeded to open a crooked home health agency, charging Medicare $86 for each home visit while paying a nurse $16 to $22.
  • An ex-physician told how he sold prescriptions to junkies in a Los Angeles Medicaid mill.
  • Another shakedown practice consisted of submitting bills - $300,000 worth in one case - for treatment of dead patients.

Anti-fraud language in the Senate Medicare and Medicaid legislation would make health care fraud a crime, increase fines and make it easier to kick fraudulent providers out of the system.

Source: Nancy E. Roman and other dispatches, "Medicare Scam Veterans Tell Panel How Easy It Was to Cheat," Washington Times, November 3, 1995.


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