David R. Henderson  

The Medicare Fraud in Our Future

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Education and Signaling: Rejoi... Knowledge-Power Discrepancy...

In tonight's 60 Minutes episode, the lead item was on the huge amount of Medicare fraud that takes place. Scam artists get lists of patients, lists of expensive items they can bill to Medicare, and a bank account. Then they go to town and steal tens of millions of dollars. The whole thing is worth watching and/or reading. Two highlights struck me. First, Steve Kroft interviews the woman in the federal Department of Health and Human Services who is responsible for reducing fraud. Her name is Kim Brandt, Medicare's director of "program integrity." You can't make this stuff up. Told by Kroft that she's doing a lousy job, she replies:

Well, it really does come down to the size and scope of the Medicare program, and the resources that are dedicated to oversight and anti fraud work. One of our biggest challenges has been that we have a program that pays out over a billion claims a year, over $430 billion, and our oversight budget has been extremely limited.

Well, yes, it does come down to the size and scope of Medicare. And that's getting bigger. By the way, Ms. Brandt has left the government.

Then, Kroft asks the U.S. Attorney General Eric Holder why it took the government so long to "figure out they were being scammed." Holder replied:

I think people I don't think necessarily thought that something as well intentioned as Medicare and Medicaid would necessarily attract fraudsters.


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COMMENTS (6 to date)
Liam writes:

Holder should really be ashamed of deflecting like that. It shows he is either ignorant or apathetic. I am more inclined to the latter as people have been abusing farm subsidies for decades and now when someone points out that a multi-millionaire is collecting subsidises for not farming the offender just shrugs.

Tracy W writes:

The NZ government set up ACC, to pay out on accident claims on a no-fault basis. They used to boost that they had far lower admin costs than any private company. But of course total costs rose and rose as scammers figured out how to scam.

John Goodman writes:

Can you imagine a private company losing one out of every ten dollars and not doing anything about it?

Underwriterguy writes:

Further to John Goodman's point: it would have been interesting to have Kroft interview a Medicare Advantage company and see what their percentage of fraud is. I managed a Medicare+Choice business and we attacked suspicious billings vigorously.

David R. Henderson writes:

All commenters above,
All great comments. Especially, the one by Underwriterguy. That would be very interesting. Maybe the answer is even out there already. Does anyone know?

Rebecca Burlingame writes:

It's hard to believe Holder said that, because when I still had television several years ago, there were numerous stories about the ongoing scams with Medicare. KY3 out of Springfield, Missouri was really good at digging up that sort of thing.

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