Tantamount to Corruption

I’ve blogged previously about how Medicare avoids administrative costs by permitting waste and fraud.  Now it appears that Medicare avoids public scrutiny about fraud by covering it up.  Today’s New York Times reports:

Medicare’s top officials said in 2006 that they had reduced the number of fraudulent and improper claims paid by the agency, keeping billions of dollars out of the hands of people trying to game the system.

But according to a confidential draft of a federal inspector general’s report, those claims of success, which earned Medicare wide praise from lawmakers, were misleading.

In calculating the agency’s rate of improper payments, Medicare officials told outside auditors to ignore government policies that would have accurately measured fraud, according to the report. For example, auditors were told not to compare invoices from salespeople against doctors’ records, as required by law, to make sure that medical equipment went to actual patients.

As a result, Medicare did not detect that more than one-third of spending for wheelchairs, oxygen supplies and other medical equipment in its 2006 fiscal year was improper, according to the report. Based on data in other Medicare reports, that would be about $2.8 billion in improper spending.

That same year, Medicare officials told Congress that they had succeeded in driving down the cost of fraud in medical equipment to $700 million.

Some lawmakers and Congressional staff members say the irregularities that the inspector general found were tantamount to corruption and raise broader questions about the credibility of other Medicare figures.

The article discussed the extent of Medicare fraud:

Equipment sellers have submitted counterfeit documents, forged doctors’ signatures and filed claims on behalf of patients who were dead or had never been seen by the prescribing physician, according to many reports by government oversight agencies.

For example, a Florida businessman was sentenced last year to 37 months in prison for submitting more than $5.5 million of fake claims to Medicare. The businessman operated for months, despite giving the agency an address that was actually a utility closet…

Medicare reported to Congress that, for the fiscal year of 2006, AdvanceMed’s investigations had found that only 7.5 percent of claims paid by Medicare were not supported by appropriate documentation. But the inspector general’s review indicated that the actual error rate was closer to 31.5 percent.

For instance, according to the report, the Office of Inspector General examined a claim for an electric wheelchair that AdvanceMed had said was appropriate. The inspector general’s investigation revealed that the physician who was listed as having prescribed the wheelchair had no knowledge of the prescription.

The person who received the wheelchair said that he had never met with the physician, that he did not need a wheelchair and that he had never used it, according to the report. His wife had also received a wheelchair that she had not asked for and never used.

Equipment sellers can pocket more than $2,500 every time they send a powered wheelchair to a patient and bill Medicare.

Don’t worry, though, because your congresscritters are on the job:

On July 1, Medicare instituted a new competitive bidding system that officials said would reduce both fraud and costs for medical equipment.

On July 15, however, Congress suspended the program, after equipment manufacturers and sellers began an aggressive lobbying campaign.

A leading congressional watchdog was outraged:

“This is outrageous,” said Senator Charles E. Grassley of Iowa, the top-ranking Republican on the Senate Finance Committee, who has repeatedly credited the Centers for Medicare and Medicaid Services with reducing improper expenditures. “If heads don’t roll, you can’t change the culture of this organization,” he added.

To clarify, Grassley was of course referring to the culture of Medicare, not Congress.

Another congressional watchdog had seen it all before:

“This report doesn’t surprise me,” said Representative Pete Stark, Democrat of California and a senior member of the Ways and Means Committee. He has pushed to cut improper Medicare spending. “To look better to the public, you cook the books,” he said. “This agency is incompetent.”

Of course, Pete Stark’s solution for Medicare’s incompetence is to force you to enroll:

There is a road map laid out for us…Medicare. Medicare has lower administrative costs than any private plan on the market…Medicare has shown us the power of simplicity; we need only expand its promise to the rest of our population.

Medifraud for all!

Dear Leo

Leo Casey, an award-winning teacher and a rep for the United Federation of Teachers, wrote a blog post today lamenting what he sees as cherry picking of studies by school choice advocates. Entirely apart from the validity of that claim, it bespeaks a desire on Mr. Casey’s part to look at the broadest possible array of relevant evidence. Good for him. I agree so strongly with his sentiment that I spent the last several months putting together the most comprehensive worldwide review of the evidence on public vs. private school outcomes to date, to be released in a few weeks (“Markets vs. Monopolies in Education: A Global Review of the Evidence”). It collects and tabulates 115 statistical findings drawn from 55 separate studies conducted in over 20 nations.

Most of these findings favor private provision of education over government provision. But, of course, private schools differ quite a bit in levels of regulation and sources of funding from one nation to another. To address that complication, I included a tabulation that specifically compares the most market-like private school systems (minimal regulation and at least some parent funding) with typical monopoly government school systems. The results of this more meaningful breakdown of the evidence differ noticeably from the vague public vs. private comparison. I’ll wait to mention just how they differ until the study’s official release in early September.

When the study is released, I hope that Mr. Casey will have a look at it, and share his thoughts on its findings. While it is possible that I have missed a few studies here and there, it will be difficult to make the argument that I have cherry picked the studies to favor private schooling, since I include all the studies mentioned by Mr. Casey in his post.

Drinking Age

Yesterday, over a hundred college presidents called for a reexamination of the current minimum drinking age and suggested it should be lowered. This is great news and could serve as an opportunity to begin an intelligent national dialogue on improving alcohol policies.

Unfortunately, the neoprohibitionists at Mothers Against Drunk Driving (MADD) and elsewhere have already sprung into action in an attempt to squelch any reform-minded opinions. MADD National President Laura Dean-Mooney said in a press release that any discussion of the minimum drinking age “must honor the science behind the 21 law which unequivocally shows that the 21 law has reduced drunk driving and underage and binge drinking.”

Of course, MADD’s preferred “science” ignores a very interesting working paper published by the National Bureau of Economic Research that shreds the oft-cited correlation between adoption of the Federal Uniform Drinking Age Act (FUDAA), which forced all states to have a minimum drinking age of 21, and a reduction in alcohol-related traffic fatalities.

How could this study’s findings differ so greatly from the research that MADD touts?

The paper, penned by Jeffery A. Miron and Elina Tetelbaum, points out that prior research consistently errs by including states that were unaffected by the law – the 12 states that had adopted a minimum drinking age of 21 long before FUDAA was passed and forced states to do so. Those states – for reasons unrelated to the federal law – experienced a dramatic decrease in alcohol-related traffic fatalities in the 80s and their inclusion in previous studies led many researchers to falsely conclude that the FUDAA was the key factor in the national trend.

That trend, however, began well before the FUDAA was passed in 1984. As the study notes: “[T]he decline began in the year 1969, the year in which several landmark improvements were made in the accident avoidance and crash protection features of passenger cars.” The study also recognizes that medical advances probably deserve a great deal of credit for the reduction.

While drunk driving statistics tend to attract the most attention in discussions of the minimum drinking age, the core purpose of such laws is to prevent minors from accessing alcohol. To this end, these laws have been an abject failure on college campuses. Even high school students seem to have little problem obtaining alcohol. A survey by the University of Michigan reveals that 8th and 10th graders find it easier to get alcohol than cigarettes.

Still, anti-drinking advocates cling to the notion that the minimum drinking age is effective and that state governments are unable to make sound decisions for their residents.

Would Someone Puh-leaze Answer This Question?

About a month ago, I piggybacked on an Eduwonk post asking the critical question that lovers of national academic standards refuse to answer: Why would federal standards — especially with stakes attached — be any less politicized than those established by states or districts? To clarify this a bit, let me rephrase the question: Why would the teachers unions, public-school administrators associations, and education bureaucrats – with their huge presences in and around DC, their outsized political power compared to parents, and their overwhelming interest in low standards and high funding – have any less sway over the feds than they have over other levels of government?

Sadly, no national standards standard bearers have answered these questions, and the leaders of the charge keep on making undefended proclamations. Look no further than today’s Flypaper post by Michael Petrilli. At the same time he rightly calls out the Washington Post for failing to understand that “what’s sorely lacking in Washington isn’t ambition, but hubris,” he asserts that the feds “could… provide greater transparency about how schools are performing—yes, through…national standards and tests.”

To quote Charlie Brown as Lucy pulls the football away: “AAUGH!!!”

Could someone PLEASE answer the question: Why would the feds be any less susceptible to standards-dumbing/avoiding/destroying than any other level of government? Indeed, given Washington’s abysmal track record on education, why should any rational person conclude that the feds wouldn’t be more susceptible to special-interest domination? And while we’re at it, could someone explain why standards from any level of government wouldn’t be more influenced by teachers unions and the like than standards delivered by parent-controlled education dollars for which schools would have to compete?

For national-standards stalwarts it’s easier to just not address political reality. But please, humor me (and Eduwonk): Explain how Washington suddenly got so high above pernicious political powers that federal standards wouldn’t be dragged into the same-old, smothering, education mud.

Energy Dust-Up in LA

This week, the Los Angeles Times has invited me to participate in a daily on-line debate (a regular feature they sponsor called “Dust-Up”) with V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies.  Monday, we debated off-shore drilling.  Today, we debated the T. Boone Pickens’ energy plan.  Tomorrow, we’ll debate nuclear energy.  Thursday, the issue is the future of the automobile.  Friday, the topic is what America’s energy economy will and/or should look like in a generation.  While our exchanges won’t be in the newspaper’s print edition, I’ll take the on-line exposure.

So far, I don’t think John has laid a glove on me.  In the off-shore drilling discussion, John has a hard time differentiating between electricity markets and transportation markets.  To say that we should rely on wind, solar, or whatever – and not oil – is to say that we should rely on batteries to run our automotive fleet.  Well, that would be great, but until some pretty big-time breakthroughs occur in battery technology, that’s not going to happen.  Regarding T. Boone Pickens’ energy agenda, I’m still waiting for a concrete argument about why markets “fail” to produce all the investment dollars that this supposedly worthy industry needs.

Tomorrow’s debate will likely produce few sparks.  I’m against nuclear energy subsidies and don’t think the industry would survive without them.  Thursday and Friday, however, will be more interesting.  I don’t have the faintest idea what sort of personal automobiles will be on the market in, say, 2030, and even less idea what the energy economy of the next generation will look like.  I suspect, however, that John thinks it’s all rather obvious where energy markets and technologies are heading and that he has the perfect master plan to most efficiently accelerate all the big-time changes that history has in store for us.

Saying “I don’t know” to questions like these is never that good of an idea if you want to dazzle people with your wisdom and insight.  On the other hand, it’s hard to marshall the argument that “the oil age is over and the age of genetically modified gerbils on treadmills is coming” (or whatever) and then say that the government needs to do something to get us there.  Well, if its so inevitable, then why must government act at all?  We’ll find out if John can manage to resolve that tension in what will likely be his argument.

Even Public School Teachers Support Education Tax Credits!

Neal McCluskey has some serious and valid complaints about the way the recent Education Next/Harvard PEPG survey asks about support for No Child Left Behind. But the survey also has some good questions about school choice and some great news about education tax credits.

I noted last year that their 2007 survey found 53 percent of current and former public school employees support education tax credits and only 25 percent oppose them.

This year, they report that a plurality, 46 percent of public school teachers, support education tax credits and just 41 percent oppose them. As for the general public, 54 percent support tax credits and only 28 percent oppose them.

More public school teachers support education tax credits than oppose them. That’s an amazing little fun-fact.

Pick a category – rich, poor, old, young, white, black, Hispanic, Democrat, Republican, or even public school employees – they all support education tax credits. And credits stand to save states billions of dollars.

Now that’s a winning issue for any politician.