Medicare, Medicaid 'Open Invitation' to Fraud?
Medicare and Medicaid's model for paying out claims is an "open invitation"
to fraud that could amount to nearly $200 billion a year.
But the programs could drastically cut down on fraud by adopting common-sense
procedures already used by the private sector.
"When President Obama pushed through his healthcare bill, he cut more than
$500 billion (over 10 years) in future Medicare spending in order to claim the
bill was 'paid for,'" Forbes magazine observed.
"A better option would have been to aggressively target Medicare and Medicaid
fraud, which could have provided the same amount of savings, and possibly
more."
The major problem is the two programs' "pay and chase" model. The private
sector uses pre-claims adjudication, searching for possible fraud or
discrepancies before claims are paid, but Medicare and Medicaid routinely pay
out claims and only pursue wrongdoers if information regarding fraud is later
discovered.
As a result, fraud is rampant
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The Medicare Fraud Strike Force, established in 2007, visited nearly 1,600 businesses in Miami that had billed Medicare $237 million for durable medical equipment, and found that nearly one-third of them didn't even exist.
A former official in New York City said 40 percent of the city's Medicaid payments could be "questionable," and The New York Times reported that a Brooklyn dentist had filed 991 claims in one day.
"Scamming Medicare and Medicaid is so lucrative that the Russian and Nigerian mobs have gotten involved," Forbes disclosed. One New York crime family has found that "defrauding Medicare is both more lucrative and less dangerous than some of the traditional organized crime activities."
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