One issue plaguing the Medicare reforms is Medicare fraud. Every year, both seniors and the government lose quality health care and billions of dollars to corrupt providers. Medicare fraud isn’t new (see my previous blogs on fraud and scams), but as the new health care reforms have passed, fraud has been in the spotlight. Medicare fraud affects everyone, from the government to seniors to taxpayers.
Cutting costs for health care is integral to health care reform. According to the United States government, taxpayers lose over 60 billion dollars every year due to Medicare fraud. The government uses taxpayer money to finance Medicare, so when people abuse the system, it is the taxpayers who pay the price.
South Florida is the hotbed of these schemes, full of phantom pharmacies and providers, where criminals can earn tremendous amounts of money by cheating the government. Scammers sometimes purchase businesses like pharmacies, along with Medicare licenses and patient records, and use that information to charge Medicare for drugs and other services. According to a report by ABC news, one man’s Medicare card was used to purchase two prosthetic legs—even though the man had both of his legs, Medicare was slow to respond. Because Medicare moves very slowly, even when dealing with something like fraud, it is easy for con men to get away with their crimes.
Con men and fraudsters aren’t the only ones to participate in Medicare fraud schemes. Some corrupt health care providers overcharge Medicare for certain services that may or may have been performed improperly. Not only does this swindle the government out of millions of dollars, but also can harm the health of Medicare beneficiaries. Most doctors and other providers are not involved in any of these scams, but the minority who do fraudulently charge Medicare waste government cash and harm senior health.
Preventing Medicare fraud could save the government—and taxpayers—billions of dollars annually, making it imperative to crack down on scammers and corrupt providers. In the current system, responses to fraud are often slow and cumbersome, with little action taken. When Medicare cracked down on fraudulent equipment sales in South Florida, Medicare durable medical equipment claims dropped by $1.76 billion. By making more of an effort to combat fraud, it will be possible to save billions of dollars.
Recently the Department of Health and Human Services proposed that individual workers found responsible for Medicare fraud should be removed from the Medicare program. Currently, only people who are still working for a company convicted of Medicare fraud can be excluded from the program, so employees can leave the company in order to evade exclusion. Two Representatives from Florida proposed legislation that cracks down on individual executives, preventing them from working with Medicare after they have been convicted.
President Obama plans to sign a memo that would create a “do not fraud” list to combat Medicare fraud. Consequently, the government would not send payments to deceased people, suspended contractors, or other delinquents to cut down on fraudulent payments. According to the Washington Post, within a three year time span, CMS sent approximately $182 million to dead people. CMS will use an online tool that will detect fraud, and provide more comprehensive background tests on providers, hoping to cut down on fake payments.
In general, I feel that the crackdown on such scams will be beneficial to the Medicare system. By preventing employees responsible for fraud from again working with Medicare, and keeping more detailed records of payments and providers, the government can save billions of dollars that will be better used elsewhere. Hopefully these measures will improve the current health care environment in the United States.