Tag: medicaid fraud

‘Why Indiana Shouldn’t Fall for Obamacare’s Medicaid Expansion’

My latest oped, in the Indy Star:

Meanwhile, many [Medicaid] enrollees can’t even find a doctor. One-third of primary care physicians won’t take new Medicaid patients. Only 20 percent of dentists accept Medicaid. In 2007, 12-year-old Deamonte Driver died — yes, died — because his mother couldn’t find one of those dentists.

For more on why states should reject ObamaCare’s Medicaid expansion, read my latest Cato white paper, “50 Vetoes: How States Can Stop the Obama Health Law.”

Fidel Castro, Medicare Beneficiary?

There’s no proof yet, but it looks an awful lot like Medicare might be subsidizing the Castro brothers.

I, for one,  was not surprised to read that Medicare payments for non-existent medical services are ending up in Cuban (read: government-controlled) banks. Nor that “accused scammers are escaping in droves to Cuba and other Latin American countries to avoid prosecution — with more than 150 fugitives now wanted for stealing hundreds of millions of dollars from the U.S. healthcare program, according to the FBI and court records.”

In fact, I have been wondering for some time when we would see evidence that foreign governments have been stealing from Medicare. The official (read: conservative) estimates are that Medicare and Medicaid lose $70 billion each year to fraud and improper payments, a result of having almost zero meaningful controls in place. That’s practically an open invitation to steal from American taxpayers. Kleptocratic governments—and other organized-crime rings—would be insane not to wet their beaks.

In this National Review article, I explain how easily it could happen:

Last year, the feds indicted 44 members of an Armenian crime syndicate for operating a sprawling Medicare-fraud scheme. The syndicate had set up 118 phony clinics and billed Medicare for $35 million. They transferred at least some of their booty overseas. Who knows what LBJ’s Great Society is funding?

I also explain how these vast amounts of fraud aren’t going to stop without fundamental Medicare and Medicaid reform. Give the National Review article a read, and tell me if you share my suspicion that Medicare is bankrolling other governments.

J.P. Morgan and Yahoo: Market Successes

Investment giant J.P. Morgan made a bad trade that cost its owners $2 billion. The responsible parties are losing their jobs. Yahoo’s CEO evidently misled people about his qualifications. As a result, he lost his job.

If you want to know why these are market successes, consider: Medicare and Medicaid lose at least 35 times as much per year to fraud and other improper payments, and Medicare wastes even more on medical care that does nothing to make patients healthier or happier. This happens year after year after year.

Now ask yourself: when was the last time someone got fired over those losses? And yet the politicians’ first reaction to the J.P. Morgan trade was greater oversight by the political system, which tolerates much greater losses than the market system that is currently disciplining J.P. Morgan.

Here’s hoping the Yahoo incident inspires some politician to crack down on people who embellish their resumes.

Medicare Fraud Posse Cackles as If They Laid an Asteroid

What the media blare:

Levinson Snags $515 Million in Health Care Fraud

More than 100 Charged in Massive Medicare Fraud Busts in 7 Cities in Scams Totaling $452 Mil

What I hear:

Drip … … … . drip … … … … .

Why? As the latter article notes, “authorities have targeted fraud that’s believed to cost the government between $60 billion and $90 billion each year.” So add up those two figures, which include frauds that occurred in multiple years, and you get somewhere between 1.1 percent and 1.6 percent of the amount that Medicare and Medicaid enable criminals to steal from taxpayers in a single year.

Neither article makes it clear how paltry these anti-fraud efforts are. But at least the former article asks:

So what is it about the government’s health care programs that make them such inviting targets for white collar criminals?

I answer that question here, and in this video:

As Predicted, Obama Administration Backs Off Medicare Anti-Fraud Efforts

Medicare and Medicaid are rife with fraud. We’re talking 10 percent or more of total spending, which is two orders of magnitude more than what credit card companies tolerate.

In a recent article, I explained a couple of ways such fraud occurs:

For providers, Medicare is like an ATM: So long as they punch in the right numbers, out comes the cash. To get an idea of the potential for fraud, imagine 1.2 million providers punching 1,000 codes each into their own personal ATMs. Now imagine trying to monitor all those ATMs.

For example, if a medical-equipment supplier punches in a code for a power wheelchair, how can the government be sure the company didn’t actually provide a manual wheelchair and pocket the difference? About $400 million of the…fines paid by Columbia/HCA hospitals were for a similar practice, known as “upcoding.”…

Yet federal and state anti-fraud efforts remain uniformly lame. Medicare does almost nothing to detect or fight fraud until the fraudulent payments are already out the door, a strategy experts deride as “pay and chase.” Even then, Medicare reviews fewer than 5 percent of all claims filed.

I also explained why fraud is so rampant:

Efforts to prevent fraud typically fail because they impose costs on legitimate beneficiaries and providers, who, as voters and campaign donors respectively, have immense sway over politicians. At a recent congressional hearing, the Department of Health and Human Services’ deputy inspector general, Gerald T. Roy, recommended that Congress beef up efforts to prevent illegitimate providers and suppliers from enrolling in Medicare. But even if Congress took Roy’s advice, it would rescind the new requirements in a heartbeat when legitimate doctors — who are already threatening to leave Medicare over its low payment rates — threatened to bolt because of the additional administrative costs (paperwork, site visits, etc.)…

How could it be any other way? Anti-fraud efforts will always be inadequate when politicians spend other people’s money…[People] care less about health-care fraud, and have a lower tolerance for anti-fraud measures, than they would if they paid the fraud-laden premiums themselves.

In a word, government is stupid.

As if to prove the point, the Obama administration—despite its rhetoric about getting tough on fraud—is behaving pretty much as I predicted. In mid-November, the administration announced two anti-fraud efforts, one to prevent fraudulent claims for power wheelchairs and scooters, and another to eliminate “pay and chase” for some Medicare claims in some states. Not two months later, under “heavy provider opposition,” Medicare has delayed these demonstrations “until further notice.”

If you’re interested to see how this all turns out, follow @CMS.gov on Twitter and keep an eye out for #pmd_demonstration (the wheelchairs and scooters demonstration project; there’s no hashtag for the project to curb “pay and chase”).  HT: Peter Suderman.

RomneyCare: Making a Fool of Every Republican It Touches Since 2006

New Jersey Gov. Chris Christie’s (R) hearts former Massachusetts Gov. Mitt Romney (R), so much that Christie says it is ”completely intellectually dishonest” to compare RomneyCare to ObamaCare.  Why?  Because Romney didn’t raise taxes, and President Obama did.  Oh.

Avik  (pronounced O-vik) Roy explains how Christie gets RomneyCare so very, very wrong:

There isn’t a single person, left or right, who follows health policy seriously who disagrees with the assertion that Romneycare was the model for Obamacare. And Massachusetts has had to raise taxes, after Romney left office, to pay for the law’s significant cost overruns.

Here are some examples, left and right. But Roy o-mits a few important points.

  1. Mitt Romney increased taxes the moment he signed RomneyCare.  RomneyCare increased net government spending.  That in itself is an increase in the tax burden.  All that remains to be determined is who will pay for that added spending and when they will pay it.  The fact that the incidence of that added tax burden fell after Romney left office does not mean that’s when the added tax burden was created.
  2. Mitt Romney has raised taxes on as many people as Barack Obama has.  Half of RomneyCare’s new spending was financed by the federal government through the Medicaid program, which is financed through federal taxes, which fall on taxpayers in all 50 states.  That means that when Romney financed half of RomneyCare’s new spending by pulling down more federal Medicaid dollars, he increased taxes on residents of all 50 states.
  3. RomneyCare was born of, and expanded, a corrupt scheme by Massachusetts politicians to tax residents of all 50 states.  What motivated Romney to enact RomneyCare, as former Romney/Obama adviser Jonathan Gruber explains here, was the widespread desire (within Massachusetts) to hang on to $385 million of federal Medicaid money that Massachusetts had secured using one of Medicaid’s notorious and fraudulent “provider tax” scams.  In other words, the whole purpose of RomneyCare was to enable Massachusetts to hold on to $385 million that it received by defrauding and taxing residents of other states.  And of course, Romney/RomneyCare caused the tax burden that Massachusetts effectively imposes on non-Massachusetts residents to grow.

Christie is so laughably wrong about RomneyCare that one cannot help but smile that his remarks came during the same news cycle as this:

Newly obtained White House records… show that senior White House officials had a dozen meetings in 2009 with three health-care advisers and experts who helped shape the health care reform law signed by Romney in 2006…One of those meetings, on July 20, 2009, was in the Oval Office and presided over by President Barack Obama, the records show.

“The White House wanted to lean a lot on what we’d done in Massachusetts,” said Jon Gruber, an MIT economist who advised the Romney administration on health care and who attended five meetings at the Obama White House in 2009, including the meeting with the president. “They really wanted to know how we can take that same approach we used in Massachusetts and turn that into a national model”…

Romney said the people involved in the White House meetings were “consultants,” not “aides”…

[Gruber said,] “If Mitt Romney had not stood up for this reform in Massachusetts … I don’t think it would have happened nationally. So I think he really is the guy with whom it all starts.”

All of which is pretty much what my colleague/boss David Boaz and I have been saying since April 2010 in this well-worn Cato video: