Nationalized Healthcare—Fraud will occur


I had a brain freeze Thursday. I wrote the post for Friday morning Thursday afternoon and then forgot to save it. When I looked for it Friday morning to post, it was gone. This post will be the last one on healthcare, if the House has indeed recessed, until they return or soon before they return. I will post Saturday’s post Saturday night, hopefully. Thank you.

“‘Healthcare Reform’: Of course, what is about to be considered in the House is NOT reform. It is a proposal for the federal government to TAKE CONTROL of healthcare in this nation—either immediately or ultimately.”

Because of the length of tonight’s post, I made only one short comment. There is a link to a petition at the end. I have checked none of the links except for the petition link. The following is from the Center for Health Transformation:

“According to a recent Centers for Medicare and Medicaid Services (CMS) report, public healthcare spending in CY 2007 reached $1.06 trillion—this is inclusive of Medicare, Medicaid, and SCHIP funding (SCHIP funding is, I believe, the program that covers children not covered by Medicaid—my addition). CMS predicts that this number will more than double by 2018—with total public healthcare spending expected to be at $2.23 trillion.

These government programs are rife with fraud, waste, and abuse, often from the hands of dishonest providers and patients who use various schemes to cost taxpayers money.

Though difficult to pinpoint an exact dollar amount associated with this waste, there is a longstanding estimate that 10% of all healthcare dollars come from fraud and abuse, based on a 2009 Government Accountability Office (GAO) report. Applying this percentage to the $1.06 trillion figure, fraud and abuse accounts for upwards of $100 billion. Inclusive of waste, in addition to fraud and abuse, we at the Center for Health Transformation believe that this number could easily go above $120 billion per year. Detailed below is how we arrived at those staggering numbers.

July 2008 Senate Republican Conference report estimated improper Medicare spending could be costing taxpayers $60 billion a year.

January 2009 GAO report found that, during 2007, CMS issued over $32.7 billion in improper payments.

November 2008 CMS report showed improper payments for the following programs: Medicare fee-for-service—$10.4 billion in FY 2008; Medicare Advantage in FY 2006—$6.8 billion; Medicaid—$32.7 billion in FY 2007; and SCHIP—$1.2 billion in FY 2007.

July 2005 New York Times article estimated that questionable Medicaid claims approached $18 billion per year—and that is in the state of New York alone. Although waste is more egregious in this state than the average, multiplying only a fraction of the $18 billion by all 50 states leads to an incredible number.

July 2008 GAO report estimated that almost $1 billion in annual Medicare payments for durable medical equipment is improper. GAO highlighted this by setting up 2 sham companies. A March 2007 DHHS report found that 31% of DME suppliers in South Florida did not maintain a physical facility or were not open and staffed during unannounced site visits. A further 14% were open and staffed, but didn’t meet at least one of three additional requirements: having posted hours of operation, a visible sign, or a listed telephone number. This means that only 55% of DME suppliers in South Florida were compliant.

September 2008 Senate Permanent Subcommittee on Investigations report found that, in Medicare claims data from 1995 through 2006, there was over $4.8 billion in payments made on durable medical equipment with diagnosis codes that were invalid, blank, or unprocessable—almost $440 million per year.

September 2008 Senate Permanent Subcommittee on Investigations report found that, of bill submitted by medical suppliers from 2001 through 2006, over $1 billion were questionable claims. For example, there were hundreds of thousands of claims for diabetes-related glucose test strips for patients who were diagnosed with the bubonic plague, leprosy, and cholera. This study also found walkers being issued for patients whose diagnosis codes included sinus congestion, paraplegia, and shoulder injuries.

July 2008 Senate Permanent Subcommittee on Investigations report reviewed claims from 2000-2007 and found significant payments for medical services ordered by deceased doctors—up to $92 million, an average of over $13 million per year.

August 2008 Miami Herald investigation found that, in Southern Florida, dozens of clinics and doctors billed Medicare for more than $1.1 million in false claims for obsolete HIV-infusion therapy for a single Miami-Dade County patient, who then collected thousands of dollars in kickbacks for selling his government-issued healthcare number to them. This specific patient then used that money to buy crack cocaine. In fact, according to a 2007 DHHS report, Florida accounted for 72% of the drugs billed across the U.S. for Medicare beneficiaries with HIV/AIDS, even though the region had only about 8% of eligible patients.

The Department of Justice has set up a Medicare Fraud Strike Force in Miami. In 2007, this team indicted 74 cases and 120 defendants—contributing to a drop in Medicare billing of $1.4 billion compared to the previous year. South Florida is rampant with fraud—stolen Medicare IDs which are used to bill Medicare for care and equipment patients never got and didn’t need, particularly DME.

“Healthcare Fraud

Top 10 Shocking Fraud Examples

01) Improper Payments—According to a January 2009 GAO report, improper payments to providers that submit inappropriate claims can result in substantial financial losses to states and the federal government. Medicaid payments can be improper for various reasons, such as if people served are not eligible for Medicaid. Measuring improper payments within the Medicaid program is important to recouping and reducing them. For fiscal year 2007, CMS issued its first full-year Medicaid improper payment rate estimate of 10.5 percent, or $32.7 billion (the federal share is $18.6 billion). Identifying and reducing improper payments in Medicaid are important first steps toward improving the integrity of the program. [GAO, ‘High-Risk Series—An Update,’ January 2009]

02) Deceased Doctors—The Senate Permanent Subcommittee on Investigations recently reviewed Medicare claims from 2000-2007 and found significant payments for medical services ordered by over 16,500 dead doctors—between $60 million to $92 million. Some doctors had been deceased for more than 10 years. [Senate Permanent Subcommittee on Investigations Press Release, ‘Coleman, Levin Investigate Millions in Medicare Payments for Claims Tied to Deceased Doctors,’ July 8, 2008]

03) Sham Companies—The U.S. Government Accountability Office found that almost $1 billion of $10 billion in annual Medicare payments made for durable medical equipment (DME) is improper. GAO highlighted this lack of federal oversight by setting up two fictitious DME supplier companies with no clients or medical inventory to supply to patients, both of which were nonetheless approved by CMS for Medicare billing privileges. A specific individual, after stealing beneficiary numbers and physician identification numbers, submitted $5.5 million in claims for three fraudulent offices. [GAO, ‘Covert Testing Exposes Weaknesses in the Durable Medical Equipment Supplier Screening Process,’ July 2008]

04) Abusing Homeless—Facilities in southern California allegedly churned thousands of indigents through their sites and billed Medicare and Medi-Cal for costly and unjustified medical procedures. These facilities ran street-level operations, where runners collected indigents for unnecessary hospital services, and dropped them back off on skid row by ambulance. [LA Times, ‘3 Southern California hospitals accused of using homeless for fraud,’ August 7, 2008]

05) False claims for HIV Drugs—In southern Florida, dozens of clinics and doctors billed Medicare for more than $1.1 million in false claims for obsolete HIV-infusion therapy for a single Miami-Dade County patient, who then collected thousands of dollars in kickbacks for selling his government-issued healthcare number to them. The patient then used the money to buy crack cocaine. [Miami Herald, ‘Congress tight with Medicare anti-fraud funds,’ August 11, 2008] In fact, in 2007, Florida accounted for 80% of drugs billed across the entire United States for Medicare beneficiaries with HIV/AIDS, even though the region only had about one of 10 eligible patients. [Miami Herald, ‘Congress tight with Medicare anti-fraud funds,’ August 11, 2008]

06) Goods Never Received—A recent enforcement effort in Miami led to charges against 120 people and a corresponding $1.4 billion drop in Medicare billing in the area. Federal officials pointed to a red electric wheelchair seized from an illicit company. The wheelchair should cost about $5,000; by billing Medicare over and over, while never delivering the wheelchair to an actual patient, criminals charged $5 million for this one item alone. A retired federal judge also got notice from Medicare explaining a recent treatment he had received, including two prosthetic arms. FBI agents came to his house to take pictures of his real arms to prove that they had not, in fact, been amputated. No cross-checks had been made within Medicare to verify whether the patient actually had amputations performed. [Reuters, ‘Fraud and Florida’s Multimillion-Dollar Wheelchair,’ October 22, 2007]

07) Stolen Medicare ID—An 82-year-old patient had her Medicare ID stolen. Fake providers then used that number to bill Medicare for tens of thousands of dollars—for care and equipment she never got and didn’t need—including AIDS medicine, a wheelchair, and artificial knees, ankles, and an eye. The patient complained to authorities on several occasions, but no prosecutions were ever made. [NBC News, ‘Criminals Find Medicare Easy to Defraud,’ December 12, 2007]

08) Incomplete Claims—Investigators from the Senate Permanent Subcommittee on Investigations found that, between 1995 and 2006, $4.8 billion in Medicare payments were made for bills submitted with diagnosis codes that were invalid or blank. Some used smiley faces or exclamation points, but the bills were still paid. [USA Today, ‘Report: Medicare Spending Billions on Suspicious Claims,’ September 25, 2008]

09) Inappropriate Treatments—The Senate Permanent Subcommittee on Investigations reviewed bills submitted by medical suppliers from 2001 through 2006 and found over $1 billion in questionable claims. For example, there were hundreds of thousands of claims for diabetes-related glucose test strips for patients who were diagnosed with the bubonic plague, leprosy, and cholera. Their study also found walkers being issued and claimed for patients whose diagnosis codes included sinus congestion, paraplegia, and shoulder injuries. [USA Today, ‘Report: Medicare Spending Billions on Suspicious Claims,’ September 25, 2008]

10) One State Alone—In 2005, the New York Times estimated that NY Medicaid fraud reached into the tens of billions. [New York Times, ‘New York Medicaid Fraud May Reach Into Billions,’ July 18, 2005]

Some specific cases:

A Brooklyn dentist ‘performed’ as many as 991 procedures in a single day.

School officials enrolled tens of thousands of low-income students in speech therapy without the required evaluation, garnering more than $1 billion in questionable Medicaid payments. One school official sent 4,434 students into speech therapy in a single day. (Do you think he/she received a “performance” bonus?—my addition)

Several criminal rings duped Medicaid into paying for an expensive muscle-building drug intended for AIDS patients, which was diverted to bodybuilders at the cost of tens of millions.”

“Healthcare Fraud

GAO Reports on Fraud and Abuse:

March 2009 – Medicare—‘Improvements Needed to Address Improper Payments in Home Health’

January 2009 – Report to Congress—‘High-Risk Series: An Update’

July 2008 – Medicare Part D—‘Some Plan Sponsors Have Not Completely Implemented Fraud and Abuse Programs, and CMS Oversight Has Been Limited’

July 2008 – Medicare—‘Covert Testing Exposes Weaknesses in the Durable Medical Equipment Supplier Screening Process’

May 2008 – Medicaid—‘CMS Needs More Information on the Billions of Dollars Spent on Supplemental Payments’

April 2008 – Medicaid Financing—‘Long-standing Concerns about Inappropriate State Arrangements Support Need for Improved Federal Oversight’

January 2008 – Medicaid Demonstration Waivers—‘Recent HHS Approvals Continue to Raise Cost and Oversight Concerns’

July 2007 – Medicare—‘Improvements Needed to Address Improper Payments for Medical Equipment and Supplies’

March 2007 – Medicaid Financing—‘Federal Oversight Initiative is Consistent with Medicaid Payment Principles but Needs Greater Transparency’

September 2006 – Medicaid Third-Party Liability—‘Federal Guidance Needed to Help States Address Continuing Problems’

June 2006 – Medicaid Financial Management—‘Steps Taken to Improve Federal Oversight but Other Actions Needed to Sustain Efforts’

March 2006 – Medicaid Integrity—‘Implementation of New Program Provides Opportunities for Federal Leadership to Combat Fraud, Waste, and Abuse’

September 2005 – Medicare—‘More Effective Screening and Stronger Enrollment Standards Needed for Medical Equipment Suppliers’

June 2005 – Medicaid Fraud and Abuse—‘CMS’s Commitment to Helping States Safeguard Program Dollars is Limited’

June 2005 – Medicaid Financing—‘States’ Use of Contingency-Fee Consultants to Maximize Federal Reimbursements Highlights Need for Improved Federal Oversight’

June 2005 – Medicaid Drug Rebate Program—‘Inadequate Oversight Raises Concerns about Rebates Paid to States’

June 2005 – Medicaid—‘States’ Efforts to Maximize Federal Reimbursements Highlight Need for Improved Federal Oversight’

July 2004 – Medicaid Program Integrity—‘State and Federal Efforts to Prevent and Detect Improper Payments’

March 2004 – Medicaid—‘Intergovernmental Transfers Have Facilitated State Financing Schemes’”

“Stop Paying the Crooks: The equivalent of the gross national product of New Zealand—somewhere between $70 billion and $120 billion—is stolen from U. S. taxpayers each year due to fraud in Medicare and Medicaid. This is both a stunning demonstration of government incompetence and a huge source of real reform of our health care system. Jim Frogue of the Center for Health Transformation (CHT) details the extent of fraud in government health care and what can be done about it in his new book, Stop Paying the Crooks.

Today, CHT is launching a petition demanding that government stop fraud in Medicare and Medicaid before spending any more taxpayer funds on government health care. If you want to end the theft of taxpayer dollars in government run health care, read the petition and sign our petition at http://www.healthtransformation.net/”

According to the site, 9,100+ have signed so far.