By taking the fraud and abuse problem seriously this administration might be able to save 10 percent or even 20 percent from Medicare and Medicaid budgets. But to do that, one would have to spend 1 percent or maybe 2 percent (as opposed to the prevailing 0.1 percent) in order to check that the other 98 percent or 99 percent of the funds were well spent. But please realize what a massive departure that would be from the status quo. This would mean increasing the budgets for control operations by a factor of 10 or 20. Not by 10 percent or 20 percent, but by a factor of 10 or 20. [emphasis added]
That’s not going to happen, as I explain here and in this video:
The federal government, four states, and a whistleblower have extracted a $154 million settlement from Par Pharmaceuticals for fraudulently inflating the prices it charges Medicaid, according to the Associated Press.
With Medicare and Medicaid losing roughly $100 billion each year to fraud and other improper payments, however, the fact that a paltry $154 million settlement is news can only mean that federal and state governments are not even trying to combat fraud in any serious way. As I explain in this video, that’s because politicians have almost zero incentive to do so — which makes massive amounts of fraud an inherent part of these programs:
Under ObamaCare, Medicare and Medicaid fraud will only get worse.
The Washington Post’s editorial board issued a challenge to the president and his Republican opponents: “show us your plans” for deficit reduction. In fact, the Post says it would be “delighted” to receive plans from its readers. However, the Post isn’t interested in “meaningless promises” to cut “waste, fraud, and abuse” — it wants specifics:
Here’s what we’re not looking for: pablum about eliminating unnecessary spending without identifying where. Gauzy rhetoric about making hard choices without making them. Meaningless promises about eliminating waste, fraud and abuse. Broad assertions about where to find the money — “Medicare savings,” “tax reform” — without specifics. Arbitrary spending caps without accompanying details about how those limits are to be met. If you believe, for example, that federal spending should be kept to a specific share of the economy — 18 percent? 20 percent? — show the plausible path to getting there.
Amen. Chris Edwards and I have been beating the drum for Republican policymakers in particular to get specific about what they would cut. Chris recently noted that with the exception of Sen. Tom Coburn (R‑OK), Sen. Rand Paul (R‑KY), and perhaps a few others, Republicans aren’t putting much effort into identifying programs to terminate. And I have noted that “It’s more common to hear Republicans blubber on about ‘reducing waste, fraud, and abuse’ in government programs and ‘saving’ the pillars of the welfare state (Social Security and Medicare) for ‘future generations.’”
As for deficit reduction ideas from Washington Post readers, we have a balanced budget plan on our Downsizing the Federal Government website. In fact, not only do we have a plan, we have over three dozen essays on numerous government agencies that provide details on what programs to cut and why.
From today’s Los Angeles Times:
On Tuesday, a jury found [south Los Angeles pastor Christopher] Iruke, his wife and an employee who worked for the couple guilty of healthcare fraud and conspiracy to commit fraud…
Authorities said Iruke and associates often supplied power wheelchairs to Medicare patients perfectly capable of walking on their own —including one who did jumping jacks to show agents he never needed one. Also among the patients Iruke and his associates filed reimbursement claims for were two people who were deceased, according to court papers…
After purchasing the wheelchairs at about $900 wholesale and paying for the prescriptions, he pocketed the remainder of about $6,000 in taxpayer money he received as Medicare reimbursements, according to court documents. The pastor operated four medical equipment supply companies between May 2002 and September 2009 as part of the scheme, according to authorities.
In all, Iruke’s companies filed for $14.2 million in claims and received about $6.6 million in reimbursements.
The money funded a lavish lifestyle, including several luxury cars, international travel, and about half a million dollars of remodeling on his Baldwin Hills home, prosecutors contended in trial…
The case was brought as part of a federal strike force on Medicare fraud, which has resulted in charges against more than 1,000 people across the country who billed the program $2.3 billion, according to a Department of Justice press release.
Apologies for the long excerpt, but this stuff is fascinating for several reasons. The ease with which these folks defrauded Medicare. The vast gulf between the market price for a wheelchair ($900) and what Medicare pays ($6,000) — which practically begs people to defraud the program. The fact that DOJ pats itself on the back for nabbing the perpetrators of $2.3 billion of fraudulent billings even though that represents a much smaller number of fraudulent payments, which in turn account for a teeny‐tiny share of the official estimate that Medicare loses $48 billion to fraud and other improper payments per year, which itself understates the extent of fraud in the program.
As I explain in this article and the below video, the extent of Medicare and Medicaid fraud is truly mind‐blowing.
ObamaCare will bring even more fraud. And efforts to combat Medicare, Medicaid, and ObamaCare fraud will always be inadequate until Congress reforms or scraps these entitlement programs.
Available here. Something about Medicaid employees coaching faux Russians on how to hide income and assets so as to enroll their father in Medicaid.
I’m not sure how much of what Project Veritas has found counts as fraud. But I’m pretty sure it’s chump change compared to this stuff:
It is interesting, and consistent with the thesis of this video and my National Review article, that Project Veritas’s Medicaid‐fraud videos haven’t garnered nearly as much attention as their other “stings.”
Today, the Government Accountability Office will release a new report on fraud in Medicare and Medicaid. By my count, it is the 159th report the GAO has issued on fraud in these programs since 1986. According to the Associated Press:
The federal government’s systems for analyzing Medicare and Medicaid data for possible fraud are inadequate and underused, making it more difficult to detect the billions of dollars in fraudulent claims paid out each year, according to a report released Tuesday.
The Government Accountability Office report said the systems don’t even include Medicaid data. Furthermore, 639 analysts were supposed to have been trained to use the system — yet only 41 have been so far, it said.
The Centers for Medicare and Medicaid Services — which administer the taxpayer‐funded health care programs for the elderly, poor and disabled — lacks plans to finish the systems projected to save $21 billion. The technology is crucial to making a dent in the $60 billion to $90 billion in fraudulent claims paid out each year.
In this article for National Review, I explain that there are reasons why those tools are, and will remain, “inadequate and underused.”
Over at Downsizing the Federal Government, we focused on the following issues this week:
- Block‐granting Medicaid would be a good short‐term reform to get the program’s ballooning spending under control.
- Policymakers who are concerned with bureaucratic duplication and waste should focus their efforts on limiting the government’s capacity to spend.
- Federal spending would still increase in fiscal 2011 if Republicans get the $61 billion in funding cuts they’re seeking.
- The solution to a lot of the problems caused by farm subsidies lies not in changing the direction of the programs, but in abolishing them.
- “Other mandatory” programs are often forgotten in the debate over how to rein in our extraordinary deficits and mounting debt. That needs to change.