Make Diagnosing Fraud Medicare's Top Priority

By Criner, Lawrence | Insight on the News, August 4, 1997 | Go to article overview
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Make Diagnosing Fraud Medicare's Top Priority


Criner, Lawrence, Insight on the News


As Congress takes up the perennial task of trying to find an answer to the Medicare dilemma, keep in mind that Medicare has been bled dry through fraud, in many instances by the health-care providers themselves. It will take much more than Band-Aid solutions to stop the hemorrhaging.

Rather than score political points by talking about medical savings accounts, extending the age limit for retirement and "caring for the needy," policy makers should take up the long overdue job of rooting out criminal fraud in the health-care system.

At a press event on June 5, 1996, Treasury Secretary Robert Rubin declared that the Medicare Trust Fund would run out of money in 2001, not in 2002 as previously predicted. This year's annual report affirmed Rubin's bleak forecast.

Consider a few figures. In fiscal 1994, federal spending for the Medicare program totaled $160 billion, or approximately $440 million per day. The Congressional Budget Office estimates that Medicare spending will exceed $380 billion by 2003--more than $1 billion per day. Is anyone surprised that Medicare costs are increasing at a pace that cannot be sustained? The question is how to preserve the system for today's 37 million recipients, and for the 78 million baby boomers who will start to retire in a few years.

One place to begin is fraud control. Department of Health and Human Services Inspector General June Gibbs Brown has said, "Fraud and abuse permeate all aspects of Medicare." She says up to $17 billion, or 10 percent of Medicare's budget, is lost each year through false and inflated claims. In truth, no one really has a clue how much is pilfered.

For one thing, the Medicare con game largely is unseen. Few patients ever see what is submitted to Medicare. And if they do, they might not understand the bill. Medicare pays more than 800 million claims annually The actual business of Medicare reimbursement is handled by more than 70 different contractors who are paid for processing claims. There is little incentive to seek out fraud: The more claims the contractors process, the more they are paid. Reportedly, physicians, supply companies and diagnostic labs have a risk of about three in 1,000 of having Medicare audit their billing practices in any given year.

The scope of the problem is so enormous that Anthony DeWitt, a lawyer on the front line in the battle against Medicare fraud, calls it our "silent public-health menace. Left unchecked it will wreak havoc on the health-care system." Dewitt is not alone in his view.

We have heard about the infamous $600 toilet seats charged to the Pentagon. That is petty, compared to what is filched from the American taxpayers through Medicare.

To Ben Carroll of Kissimee, Fla., Medicare must have seemed like an automated-teller machine from heaven. According to a report in the Kansas City Star on March 11, 1997, he operated MLC Geriatric Health, supplying "female urinary-collection devices" to nursing homes throughout Kansas and Florida. As it turns out, these devices actually were nothing more than 35-cent "adult diapers." Thanks to careless review and accounting procedures, he charged the federal government $8.

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