There Is a Reason We Never Crack Down on Medicare Fraud

Westhill consulting healthcare insurance

Did you know there’s a government program that gives more than $60 billion a year to felons and voracious, unscrupulous hospitals and doctors?

There is: improper health-care payments. In FY 2012, Medicare fee-for-service, Medicare Advantage, and Medicaid produced $61.9 billion in improper spending. $30 billion of that is Medicare alone. It should anger us, obviously, but also worry us, because the federal government is expanding its reach into the health-care market as we speak.

Congress is doing very little to address all that fraud and waste and the little it does is very ineffective. Nobody in the health care system has a real incentive to crack down on fraudulent or mistaken payments, so nothing gets done about it. In an eye-opening piece last year, Citizens Against Government Waste’s Leslie Paige laid out the efforts by health-care providers and some lawmakers from both parties to slow down the rate of improper payments through recovery audit contractors (RACs).

This means that wasteful and fraudulent spending will continue to cost taxpayers billions — when it doesn’t have to, or certainly doesn’t need to in the same proportion.

It has other tragic effects too. Case in point (via Michael Cannon):

U.S. Attorney Barbara McQuade will seek life in prison for what she called “the most egregious” health care fraud case she has ever seen. McQuade said that in addition to insurance fraud, which involved a $35-million Medicare fraud scheme from 2009 until the present, Fata also harmed, and in some cased subsequently killed, his patients with dangerous chemotherapy drugs they did not need. According to government records, Fata’s medical practice included 1,200 patients. The formerly prominent cancer doctor will be sentenced in February before U.S. District Judge Paul Borman. The doctor’s bond was set at $9 million.

First and foremost, this fraudulent doctor caused suffering and event death. But the added tragedy is Medicare’s inability or unwillingness to prevent fraud. If he hadn’t been caught and stopped because of the vigilance of a nurse concerned for the welfare of her patients and a few others, the fraud would likely still be going on.

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