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Medicare, Medicaid, CHIP All Targets For Fraud

By Alvin Tran

October 12th, 2012, 9:39 AM

When it comes to health care fraud, medical facilities and hospitals are the top two offenders. That’s according to a new Government Accountability Office report released this week.

Illustration by Leo Reynolds via Flickr

According to the report, 10,187 individuals and entities were investigated in 2010 for defrauding Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). Medical facilities (including medical centers, clinics, and medical practices) and medical equipment suppliers represented the bulk of criminal investigations. Hospitals were the most frequent subjects of civil cases.

The GAO analyzed data from government sources, including the Department of Health and Human Services’ Office of the Inspector General, the Department of Justice (which included the FBI) and 10 state Medicaid Fraud Control Units. Forty percent of those state investigations for fraud in Medicaid and CHIP in 2010 were home health care providers and health care practitioners.

While most of the 7,848 criminal cases were not prosecuted, among those that were, most were found guilty or pled guilty or no contest. The GAO notes that “Medical facilities and medical equipment suppliers represented close to 40 percent of those convicted.”

Some offenders were barred from participating in federal health care programs. For example, close to 2,200 subjects, more than half of whom were in nursing, were banned in 2010. The reasons for exclusion included conviction of health care fraud or patient abuse and negligence.

Investigations of pharmacies have really boomed, according to the GAO, from 99 cases in 2005 to 321 in 2010.

The release of the GAO report came less than a week after Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius announced that a Medicare Fraud Strike Force operation resulted in one of the largest fraud busts in history. Over 91 people, including many health care professionals, across seven cities were charged in connection with close to $430 million in false billings.

Senate Finance Committee Chairman Max Baucus, D-Mont., and a long-time proponent of cracking down on health care criminals, described the bust as a “victory in the fight against Medicare fraud and  it proves yet again that health reform is saving money and improving the health care system.”

Provisions of the health law include increasing the funding for the Medicare Fraud Strike Force and new ways to prevent health care fraud by screening health care providers before they are enrolled in the Medicare program.

Detecting and stopping health care fraud, however, is no easy feat. “For a long time we were not in a position to keep up with the really sophisticated criminals,” said Peter Budetti, who oversees anti-fraud efforts at the Centers for Medicare and Medicaid Services, said in August. “They’re not only smart, they’re extremely well-funded. And this is their full time job.”

7 Responses to “Medicare, Medicaid, CHIP All Targets For Fraud”

  1. samson p. says:

    If you get convicted of stealing from Medicare, Medicaid or CHIP, whether you are a doctor or a hospital administrator or whether you sell medicines or medical devices, you should be sentenced to a long term in a maximum security federal prison and get the opportunity to say hello to your cellmate Bubba. Until we get very serious with fraud in our healthcare system and until we set mandatory sentences for long prison terms, these shysters in the healthcare industry will continue to get a slap on the wrist and walk. Almost every doctor I know is scamming the system to some extent. Whether is accepting perks for prescribing certain medicines. Whether it’s over prescribing unnecessary tests just to cover their butt. They need to understand that it’s fraud. Plain and simple! FRAUD!

  2. Yes, Sampson, everyone is opposed to fraud and abuse in the health care system. It costs us all. But, unfortunately, what the government says is “fraud” isn’t always just that. Far too often, these investigations turn into government witch hunts against innocent physicians and providers who simply committed an honest billing mistake or let one piece of the massive paperwork puzzle collapse.

    Here are a couple of good examples from Texas:

    What’s worse, the Texas Health and Human Services Commission has just passed new rules that ANY overpayment to a physician or provider here is grounds for a fraud investigation. See for more on that.

  3. Mike McDermott says:

    Until there is criminal prosecution of those 7000, this attempt at accountability is still a farce.

  4. sunforester says:

    There are two kinds of fraud: the criminal sort that takes advantage of poorly run government bureaucracies that hand out our tax money freely, and the reasonable sort that allows health care providers forced to hand out free health care to try to make themselves whole.

    It is our government that sets up the moral hazard for both kinds of fraud, because of its vote-buying handout of free stuff for privileged freeloaders. Government is the last place we should turn to for funding our personal needs, but over the past few generations we have lost our economy and our children’s future to politicians who maintain their own power by opening the public purse.

    It is time to throw our government OUT of the business of redistributing our wealth as it sees fit. Once you take away the attraction of free money for both criminals and freeloaders, and start making people pay their own way as we humans have done since the dawn of time, the whole moral hazard caused by our own government will disappear.

  5. paul kennedy says:

    Until then…

    Send them to prison! All of them! Regardless of which kind of fraud they commit. Fraud is fraud! Take away their license to practice and let them rot in jail!

  6. >>Once you take away the attraction of free money for both criminals and freeloaders

    Yes, take the profit out of medical care. Then all the corporate privileged freeloaders can find some other area for scamming consumers.

  7. Peter Smith says:

    Yes, but until we find a way to get Mitch McConnell and John Boehner to stop obstructing everything that is introduced in Congress, we should begin sentencing every person convicted of Medicare, Medicaid and CHIP fraud to very long prison terms in maximum security prisons. Doctors, pharma reps, medical device reps, hospital administrators, everyone that is convicted! If they do the crime, they need to go to prison for a very long time.