NCPA - National Center for Policy Analysis


May 17, 2010

Health care fraud bilks taxpayers and the government out of $65 billion a year.  And no wonder.  Lots of money makes a ripe target.  And a combination of private and public payers makes for a convoluted system that's easy to game, despite plenty of people looking to combat crime, says National Public Radio (NPR).

But even as federal officials tout the recovery of $2.5 billion in Medicare overpayments last year, they are also looking at parts of the new health law designed to make criminals think twice about padding Medicare bills or just flat-out charging for care never provided, says NPR.

  • The law provides $300 million over the next 10 years for stricter enforcement of health fraud.
  • It allows the Department of Health and Human Services greater latitude to investigate companies -- using fingerprinting, site visits and even criminal background checks -- before they start billing Medicare or Medicaid.
  • Last fiscal year, officials opened more than 1,000 new health care fraud investigations.

The changes come as schemes to defraud the system get bolder, says NPR:

  • In Texas, a husband-wife doctor team recently pleaded guilty and forfeited $44 million in assets for billing Medicare for millions in narcotics and procedures they never provided for patients.
  • A ring in Detroit paid Medicare beneficiaries a few hundred dollars each in exchange for their Medicare information and used it to bill Medicare for $14.5 million in services they never rendered.
  • But in Miami, a man recently pleaded guilty to using eight fraudulent clinics to file false claims and con the Medicare system out of $61 million he used to buy jewelry, watches and race horses; his two Lamborghinis, a Ferrari, two Bentleys, and at least eight Mercedes Benzes cost about $3 million.

Such a widespread problem -- storefront clinics pop up like a whack-a-mole game -- seems impossible to combat.  National Health Care Anti-Fraud Association Executive Director Lou Saccoccio says, "It's just inevitable that unless you're very, very aggressive about going after fraud you're going to lose a lot of money."  But he thinks there are some solutions:

  • Use government strike forces to keep the pressure on criminals.
  • Delay Medicare payments to providers when fraud is suspected.
  • Scrutinize claims more closely before paying them.

Source: Andrew Villegas, "How Fighting Health Fraud Is Like Playing Whack-A-Mole," National Public Radio, May 13, 2010.

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