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June 15, 2008

Medicare fraud tops $60 billion per year

The Washington Post reports that Medicare's internal auditing systems are designed to detect unorthodox medical treatment and over billing. Out and out fraud? Not so much. The Post's experts estimate that criminals bilk the system out of more than $60 billion per year. A single Florida woman bilked the system out of $105 million, working from home on her laptop.

It's an interesting story on an important issue--but one thing is missing: Which firms hold contracts to maintain the internal accountability systems in Medicare? It's a safe bet that these functions were privatized long ago. Let's have some accountability from the firms that provide IT to the government. Which companies are preventing waste, fraud and abuse, and which ones are part of the problem?


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A billion here. A billion there. Pretty soon your talking real money. I am surprised, though, at the amount. Of course, I assumed the feds were on top of the situation with sophisticated software and technology. Apparently, not as diligent as I thought

I read the Washington Post article which I quote here:

“From her Mediterranean-style townhouse, a high school dropout named Rita Campos Ramirez orchestrated what prosecutors call the largest health-care fraud by one person. Over nearly four years, she electronically submitted more than 140,000 Medicare claims for unnecessary equipment and services. She used the proceeds to finance big-ticket purchases, including two condominiums and a Mercedes-Benz.

Did you know that the first successful effort to set up computerized and administrative procedures to catch Medicare/Medicaid fraud was in New York State in the late 1970s and early 1980s? In fact it was designed to catch people like Rita Campos Ramirez. The head of the task force was Charles [Chuck] Hines, now the Brooklyn, NY District Attorney. I know this because my father was his chief administrative officer.

They caught and prosecuted a lot of crooks. By crooks I mean pharmacists, doctors, chiropractors, clinics, etc. In fact, a good number of people in my old neighborhood were indicted: my mother's chiropractor, our family pharmacists, and others. My mother's friend went to her chiropractor and the crook listed all of her children as patients and had everyone showing up for multiple visits every week – that is, only on the books. They rarely set foot in the place.

The program was so successful that it became the model for the feds and for the rest of the country. The program was adopted all over the country. I remember the savings were counted into the hundreds of millions. And that was just NY State. It propelled Chuck Hines into the limelight and he hasn't stopped winning elections.

So that's why I found it hard to believe at first, though I don't doubt it. I'm glad you focused on this and I hope you follow the story.

Now for a political plug. One of the reasons I'm supporting Ralph Nader is because of his platform for having a SINGLE PAYER for health insurance. We already have a great model of efficient administration – Surprise! It's the Social Security Administration.

It's also worth pointing out that the current system is vastly inefficient. Not only does it not prevent fraud, but it places huge demands on the practitioners, who can make innocent mistakes which result in them facing potential accusations of fraud, or more interesting, not getting paid because they have used the wrong diagnosis code. Half the discussion in one of my professional forums is about how to code services so they will be reimbursed, and how many of these things come back at 50 or 40 cents on the dollar. Psychologists get peeved when they make less than their mechanics do, and when administrative clerks have instructions not to assist them in filling out forms or identifying the proper codes for procedures.

It almost rises to the level of a rebuttable presumption that any inefficiency in Bush administration's contract supervision will lead to a Republican ally getting paid. The K Street project, Abramoff, the Regent University no-name law grads getting put into upper-level positions at Justice, the Faith Based Initiative payola, it's all of a piece in my book. We know the usual suspects; we have seen this movie before.

This weekend on BookTV, broadcast on C-SPAN2, the book, The Teapot Dome Scandal, and author Laton McCartney were featured. See below. The points I got out of it were: 1. You only need a handful of major players to perpetrate an enormous crime of fraud, stealing, bribery, etc. 2. The main players are ruthless, greedy sociopaths with no boundaries or conscience who will even stoop to murder and intimidation. 3. McCartney can't match anything else in our history to this except present day Oil company influence in government, regulation and legislation. Well, duh!

The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried to Steal the Country

About the Program: Laton McCartney explores the Teapot Dome Scandal in which President Warren Harding's administration was indicted for taking multiple bribes from the oil industry in exchange for preferential treatment. This event was hosted by Tattered Cover bookstore in Denver.

About the Author: Laton McCartney is the author of several books, including "Friends in High Places: The Bechtel Story-The Most Secret Corporation and How it Engineered the World."

Norman, thanks for the book tip. I'll add it to my "beach reading."

Though medical billing coding doesn't much affect me and my fellow nurses at the patient's bedside, it all hovers over us like a litigious shadow.

If the patient is a GI bleeder and we're watching his hemoglobin and hematocrit levels, it's probably "fraud" if we draw and the lab processes a complete blood count instead.

This was helpful to me when shopping for Medicare Supplement insurance.

Let's put the number into a bit of historical perspective:

"Medicare actually lost about seven cents of every dollar spent to fraud, waste and mistakes in 1998, government auditors said earlier this month.

"That amounts to more than $12 billion -- but it's only about half of what was lost by the government's health insurance program for the elderly and disabled just two years ago."

So, a fivefold increase in less than a decade. I suspect that the fish is, as usual, rotting from the head.

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