Swimming In A Sea Of Medicare Fraud

(The post title relates to a quote from Dem U.S. House member Jim Cooper of Tennessee below.)

This Parade Magazine article tells us…

A whopping $70 billion out of the estimated $400 billion budgeted for Medicare in 2008 may disappear this year due to fraud and mismanagement. The taxpayer-funded system to cover health care for Americans aged 65 or older is projected to lose that amount, which is equivalent to $233 for every American.

“Defrauding Medicare is easy and safe,” says (Harvard University’s Malcolm) Sparrow (who studies Medicare fraud). “The spending is huge. The spending on controls is minimal. Bills are paid and processed by computers, and no human sees them.” In a recently reported case, one firm billed Medicare $170 million for fake HIV drug infusions. Dozens of companies charged a total of $142 million for unnecessary medical supplies, such as prosthetic limbs. Because of repeat invoicing, $5 million was spent on a single wheelchair.

And what does Bushco say in response?

“We process 1.2 billion claims each year,” says Kimberly Brandt of the Centers for Medicare and Medicaid Services. “We can’t look at all of them.”

Maybe, but you can ensure better controls on the companies that process claims as Sparrow says, can’t you (as opposed to going after Medicare subscribers).

Here’s a link to testimony by Brandt’s boss Mike Leavitt, head of Health and Human Services, to Congress last July in which he asked for more money to fight fraud, and as the story tells us…

Committee member Jim Cooper (D-Tenn.) said, "One group you've left completely off the hook" in efforts to address fraud is the private companies that process Medicare claims. A requirement that such companies increase efforts to detect fraud and inform HHS officials when fraud occurs could save Medicare billions of dollars, Cooper said, adding, "Today you're talking about small fish, minnows."

As opposed to “sharks” like PRG-Schultz International who, as noted here…

...will end up (receiving) millions of dollars in commissions…even though the firm’s wholesale rejections of Medicare claims from California rehabilitation hospitals are being reversed on appeal.

The rulings by administrative-law judges for the Office of Medicare Hearings and Appeals will restore money withdrawn from California hospitals, some of which trimmed services to Medicare patients as a result of the reviews.

But PRG-Schultz International, which is paid up to 25 to 30 cents for each dollar of Medicare spending it identifies as wrongly paid, can keep its bounty as long as its findings are sustained through the first two levels of administrative review.

…

One case involved a 77-year-old woman admitted to the rehabilitation unit at Glendale Adventist Medical Hospital in 2002 after knee-replacement surgery. She had heart problems and lived alone.

When transferred to the rehabilitation unit, she could not stand without help, antibiotics were being given to her intravenously and she was in extreme pain. After eight days in the undergoing therapy, she returned home.

Even though Medicare had paid the claim in November 2002, PRG-Schultz sent a letter in June 2006 saying it was reopening the case “due to a recent review and discovery of potential overpayment.”

Nice...

I don’t see this situation improving any time soon, unfortunately, despite the fact that this takes you to information on S 2845, the Medicare Fraud Reduction Act of 2008.

The problem I have with the bill, aside from the fact that it was introduced by Repug Mel Martinez of Florida about a week ago (makes sense given that state’s elderly population; I know PA is second or third in the nation in that category, but FLA is number one) is that it doesn’t appear to contain the needed cost controls for companies processing claims. It appears that funding would be left to the states for anti-fraud enforcement and some streamlining for subscriber bill payment.

Were I in Congress (a scary thought, I’ll admit), I’d get this into a subcommittee and beef it up a bit so it could address the costliest issue here (regulation of claims processors and altering this payment structure whereby they’re compensated the same whether they honor or deny claims).

And I would say this is an issue for the next president as well; based on this, I’m sure Captain Clueless will continue to ignore it on porpoise…

(Get it, the whole “sea” thing – never mind…).