Save on Health Care by Cracking Down on Fraud

From NY Times
By Kathleen Sharp

The Obama administration announced a plan to cut $320 billion over 10 years from the projected growth of Medicare and Medicaid. The plan would raise premiums and deductibles, lower payments to hospitals and require elderly people who receive care at home to make co-payments.

But before charging consumers more and eliminating valuable services, we should be much more aggressive in recovering money stolen from these taxpayer-supported programs. According to some estimates, health care fraud is a $250 billion-a-year industry, and about $100 billion of that is stolen from Medicare, the health care program for the elderly, and Medicaid, the insurance program for the poor and disabled.

There are many ways to defraud taxpayers. For example, a hospital chain can buy drugs at a steep discount and then bill Medicare for high sticker prices. Doctors can bill for procedures that never happened, or for drugs that were supplied to them by pharmaceutical companies free of charge, or pharmaceutical companies can promote a drug for risky, unapproved uses.

Recovering billions of dollars from these ruses won’t solve the problem of rising health care costs, but it’ll go a long way in helping to reduce waste and protect services.

Many states already aggressively pursue health care fraud. In 2005, a whistle-blower accused Quest Diagnostics, the chain of medical laboratories worth over $7 billion, of deliberately overcharging California’s insurance program for poor and disabled people, Medi-Cal, for more than 15 years. He alleged that Quest had paid kickbacks in the form of free tests and discounts to doctors and hospitals that referred patients to its labs. Recently, while denying wrongdoing, the company settled for $241 million. According to California’s attorney general, Kamala D. Harris, it was the largest fraud settlement in the history of the state’s False Claims Act.

Read the full article here.