Candy from a baby: 60 Minutes on Medicare claims fraud

cross-posted from Graham Firchlis blog

In a segment tonight, October 24, 60 Minutes takes a look at fraudulent claims and our government health care system. According to the report, Medicare alone suffers $60 Billion in claims fraud annually, and Medicaid pays out another $30 Billion.

For Medicare, with yearly outlays of $430 Billion, this represents a “shrinkage” (the accounting term) of 14% compared to a shrinkage rate of 1.5% of sales for the retail industry, considered to be at a crisis level. The reason for such high losses, according to AG Eric Holder and chief of Medicare and Medicaid anti-fraud efforts Kim Brandt, is a combination of legal requirement for prompt payment (within 30 days) and a vastly inadequate loss prevention budget.

Obama cited fraud as among the targets of his effort at reducing wasted expenditures within government-funded health care, and has included $147 million in the coming fiscal year’s budget proposal to beef up oversight and prosecutions – the first increase in funding to fight fraud since the Clinton administration. In addition, a new administrative order taking effect this month will stiffen requirements for becoming an approved Medicare provider, add new oversight proceedures, and require a $500,000 surety bond for each provider that will forfeit if fraud is proven.

Fourteen percent is a huge rate of loss, unsustainable, and under historical practices the losses would be sure to escalate if the hoped-for public insurance option becomes law and the pool of government-administered health care dollars expands. It is good for a change to have an administration that is serious about enforcing at least some of the laws against white collar crime, instead of the previous criminal cabal administration whose efforts were all in support of ripping off billions from the taxpayers.


One response to “Candy from a baby: 60 Minutes on Medicare claims fraud

  1. Pingback: Candy from a baby: 60 Minutes on Medicare claims fraud « Graham Firchlis has a blog

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