Wednesday, August 06, 2014

Are They on Crack?

The folks in DC push Medicare as if it is the greatest thing since sliced bread. Medicare is put forth as a cost efficient alternative to traditional health insurance. 

(They used to hold up the VA as a shining example, too, but that light is currently hidden under a basket. But that's another story)

To hear politicians talk, especially President AWOL, Medicare is a great system but DC spends too much money on it and they need to strip $700 billion from it to fund Obamacare. Their promise is they will reduce funding but not services to the elderly.

Instead they will eliminate waste, fraud and abuse.

That song has been playing so long it lands on deaf ears. If you Google "Medicare fraud" you come up with 5,920,000 results in .61 seconds.

That's a lot of fraud.

Some of the reports date back to 2009 and that's just on the first 5 pages.

So if Congress and the White House have known about Medicare fraud for so long, why haven't they done anything about it?

Perhaps it is because Medicare fraud is more profitable than cocaine, at least in South Florida.

If you want to find Medicare fraud, the first place you should look is South Florida, where 60 Minutes and correspondent Steve Kroft were told it has pushed aside cocaine as the major criminal enterprise. 
It's a quiet crime - there are no sirens or gunfire. The only victims are the American taxpayers, and they don't even know they are being ripped off.
CBS News

In some ways Medicare fraud is a "victim-less crime".

Most people who have Medicare never bother to check their account, or review the Summary Notices (like private insurance EOB). They don't track their claims or report suspicious activity ........ usually because they don't know their Medicare claim number is being used by others.

But Medicare knows.

All claims against original Medicare (vs. Medicare Advantage) flow through the Medicare payment system (handled by third party administrators) who have two responsibilities.

Is the Medicare number valid?

Is the claim coded properly?

If the numbers match (diagnosis and treatment) and the Member number is valid, the claim is approved and paid.

It doesn't matter if Mary has filled enough painkillers to kill a horse in the last month, and the month before that, and the month before that.

If the numbers match, the claim is paid.

Medicare fraud is estimated to be a $60 BILLION dollar industry.

It is so profitable that in South Florida Medicare fraud generates more revenue than cocaine sales.
"Is the Medicare fraud business bigger than the drug business in Miami now?" Kroft asked.

"I think it's way bigger," Ogrosky said. 

"They've figured out that rather than stealing $100,000 or $200,000, they can steal $100 million. We have seen cases in the last six, eight months that involve a couple of guys that if they weren't stealing from Medicare might be stealing your car," Ogrosky explained.

Sounds like there are a bunch of Walter White's out there breaking bad for Medicare.

Some of the Medicare thieves are making $20,000 - $40,000 a day.  Even Heisenberg would think that is big.

According to the FBI, all you have to do to get into this business is rent a cheap storefront office, find or create a front man to get an occupational license, bribe a doctor or forge a prescription pad, and obtain the names and ID numbers of legitimate Medicare patients you can bill the phony charges to. 

"There's a whole industry of people out there that do nothing but provide patients," Waterman told Kroft.

Asked what he means by "provide patients," Waterman said, "I'm just talking about lists of patients, people's names, Social Security numbers, addresses, and date of birth. With those four things, you can bill for a patient."

Real people (although you don't have to be alive, just real at one point). In 2011 Medicare paid $23 million in benefits for patients that were dead.

Real data.

Fake treatment.

If you have all that you can scam Medicare and the taxpayer.
Once the crooked companies get hold of the patient lists, usually stolen from doctors' offices or hospitals, they begin running up all sorts of outlandish charges and submit them to Medicare for payment, knowing full well that the agency is required by law to pay the claims within 15 to 30 days, and that it has only enough auditors to check a tiny fraction of the charges to see if they are legitimate.

Medicare doesn't investigate claims before paying them so they rely on their beneficiaries to catch discrepancies. But so few people actually track their claims.

76 year old Clara Mahoney is an exception.

When she looked at her bills and noticed Medicare was billed for a wheelchair, air mattress and urine bag she knew something wasn't right.

Mahoney, who says she hasn't been sick in 30 years, began calling Medicare to tell them that someone was ripping them off. But the only responses she received were letters saying that someone was looking into it. The bogus charges are still turning up on her statements. 
"And I continued to report and I kept saying, 'Can't you flag my account? You know, I'm not getting any equipment or supplies. Nothing,'" she told Kroft. 
They have been "looking" into Mahoney's issue for six years.

How much money did the taxpayers lose because Medicare failed to follow up on a simple request and investigate fraud?

This is not an isolated case.

Federal Judge Ed Davis' Medicare number was billed for two prosthetic arms.

That would have been fine except for one thing.

Judge Davis still has original equipment.

Many of these fraudulent claims are head shakers. Makes you wonder if anybody in DC is accountable for the money they take in.

The basis for this blogpost comes from a CBS report that originally ran in 2009.

What is DC doing to combat waste, fraud and abuse?

In 1977 President Jimmy Carter signed the Medicare Anti-Fraud and Abuse amendments to the Medicare law.

But don't feel bad.

President Johnson declared a war on poverty in 1964 and you see how well that worked.

Do you get the feeling that everyone in DC is incompetent and that this is not a new phenomena?

Mario Puzo had it right.

The lawyer with a briefcase can steal more money than a man with a gun.

And the Medicare thieves know this.

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