Medicare Fraud Rampant, Federal Investigators Find Devising Plan for Reform Is Difficult for Congress

By Elizabeth Shogren 1995, Los Angeles Times | St Louis Post-Dispatch (MO), October 1, 1995 | Go to article overview

Medicare Fraud Rampant, Federal Investigators Find Devising Plan for Reform Is Difficult for Congress


Elizabeth Shogren 1995, Los Angeles Times, St Louis Post-Dispatch (MO)


A NURSING HOME operator in northern California bilks Medicare out of nearly $4 million.

And he might have got away with it if he hadn't submitted forged invoices from bogus firms listing their addresses as New Hamshire - without a "p" - and Lubbock, Miss., instead of Lubbock, Texas.

Older people in southern Florida are duped into giving their Social Security numbers to door-to-door solicitors who say older people are eligible for free milk. The conspirators use the numbers to defraud Medicare out of $14 million.

A home health care service with operations in 22 states bills Medicare for $85,000. Investigators later learn the money was used to send gourmet popcorn to doctors to encourage them to employ the company's services.

According to the General Accounting Office, schemes like these added 10 percent - or roughly $17 billion - to the cost of Medicare last year. That's more than the federal government's total bill for providing cash welfare help to poor families with children.

As members of Congress wrestle with competing plans for overhauling the massive system that provides health care to the elderly and disabled, they face an uncomfortable reality: Perhaps no other government program is as rife with fraud as Medicare. But the virtual impossibility of rooting it out means that reformers must cut benefits deeper and squeeze providers harder to achieve the kind of savings they want.

Republicans and Democrats alike claim that significant savings can be achieved by ridding Medicare of waste, fraud and abuse, and they are competing with each other to prove their prowess as fraud-busters. But nonpartisan government accountants say the proposed reform plans would do little more than scratch the surface of Medicare fraud.

The Congressional Budget Office, for example, estimates that the House GOP reform blueprint would recover only $2 billion of the more than $120 billion likely to be stolen from Medicare over the next seven years.

Some officials are warning that reform legislation could actually make matters worse. The inspector general of the Department of Health and Human Services contends that the House GOP plan "would cripple the efforts of law enforcement agencies" to control Medicare abuse and prosecute doctors and other medical professionals who take kickbacks by placing an "unsurmountable burden of proof on the government."

In fact, one section of the House reform package is titled "limiting the imposition of anti-kickback penalties."

Gerald Stern, special counsel for health care fraud at the Justice Department, said the House plan would seriously undermine the current multiagency efforts to investigate and prosecute fraud, which have won the government hundreds of millions of dollars in recent settlements.

Congressional Democrats are using the issue to attack their Republican colleagues. At a congressional hearing last week, Sen. Tom Harkin, D-Iowa, said the Republican plan "could be more appropriately called the Scam Artists Protection Act. …

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