Medical Fraud Runs Up to $600 Billion a Year

According to reporting today on NPR, the cost of medical fraud in the United States runs anywhere from $60 billion to $600 billion a year. This is an enormous amount of money–even at the lower end, it exceeds the price tag for health care reform. Instead of whining about these costs, Republicans and Blue Dog Dems might think about saving us money by cracking down on fraudulent practices, which target both the government and private insurers. 

The question here is why hasn’t the government–administrations both Democratic and Republican, and the Congress–taken action to stop this fraud? Obama has recently announced a new DOJ/HHS task force to combat fraud, and some versions of the health care reform bill have a measly $100 million set aside for anti-fraud measures. But what have the oversight committees, the appropriations and legislative committees whose job it is to ride herd on taxpayer funds been doing while all this goes on? This is truly a national disgrace.

Here is a bit from the NPR report:

Medical fraud takes several forms. Most commonly, criminals get a list of patients’ names, then create fictitious doctors. They send bills to Medicare or Medicaid or health insurers for services supposedly rendered to these patients. By the time the payers figure out that the doctors they’re paying are fictitious and no service was ever rendered, the criminals have closed up shop and moved on.

Another popular form of health care fraud is the “rent-a-patient” scheme. Recruiters find people with health insurance willing to get care they don’t need, in exchange for cash or cosmetic surgery. Several years ago, insurers and the FBI said they had cracked a big case. People from 47 states were paid to come to California to receive unneeded care, including colonoscopies and surgery for sweaty palms. The doctors who performed the work reportedly charged insurers a total of $1 billion.

I suppose the libertarian Republicans would say it’s just a small price to pay for our free market system. And if the government started taking a closer look at the crooks who illegally rip off the system, they might also have to deal with the crooks who rip off the system quite legally–the price-gouging insurance and pharmaceutical companies and their ilk. Too bad the its the taxpayers, once again, who have to foot the bill for timid and inadequate oversight.

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