License to Steal: How Fraud Bleeds America's Health Care System

License to Steal: How Fraud Bleeds America's Health Care System

License to Steal: How Fraud Bleeds America's Health Care System

License to Steal: How Fraud Bleeds America's Health Care System


Fraud and abuse bleeds more than 100 billion dollars each year out of the U.S. health system. This detailed examination shows the problem is worse than almost anyone knows, mostly invisible, and still far from controlled. Sparrow reveals that current control systems fail by presenting fraud perpetrators with a safe, easy-to-hit target: fully automated check-printing systems, which only require thieves to bill "correctly", regardless of whether or not any medical service is provided. This target attracts an extraordinary range of criminal entrepreneurs, from low-life hoods who sign on as Medicare or Medicaid providers equipped with nothing more than beepers and mailboxes, to drug trafficking organizations, organized crime syndicates, even major hospital chains. Sparrow's research examines the much-misunderstood effects of managed care on the problem, the government's recent attempts to grapple with fraud, and the campaign by various provider associations to undermine those efforts.


In 1992, a New York deputy attorney general and special prosecutor for Medicaid fraud control, Edward J. Kuriansky, testified to Congress regarding what he described as

A feeding frenzy on the Medicaid Program, a period of unprecedented white-collar wilding in which wave after wave of multimillion-dollar fraud has swept through nursing homes and hospitals, to clinics and pharmacies, podiatry and durable medical equipment, radiology and labs, and more recently, home health care. Each surge has brought its own special brand of profiteer in search of the next great loophole in the Medicaid system.1

The feeding frenzy continues. As targets for fraud, major health care programs are just too attractive. Stealing a million dollars or more is remarkably easy, and carries with it little chance of getting caught. You don't even need to know much about health care. It seems no previous qualifications are required.

The general public, and most members of the medical profession, may not be aware of the extraordinary range of characters queuing up to defraud the system, nor of the unlimited creativity of men and women determined to steal from the health care complex.

The following compilation of stories--just a small sample of what goes on, and focusing mostly on folk who stole a million dollars or more--is designed to illustrate the myriad types of assault that the health system suffers, and to show the complete lack of concern perpetrators have for the damage they do to patients' health and to the health care system.

As you read these stories, please bear in mind that all these scams have been detected, and it is tempting to take comfort in that. These are the scams we know about--and we know about them mostly because the perpetrators were brazen, stupid, or excessively greedy. Mostly the less sophisticated ones get caught. Many of the cases that do come to light result from . . .

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