Patterico's Pontifications


2009 Medicare Fraud Exceeds $47B

Filed under: Government,Health Care — DRJ @ 5:21 pm

[Guest post by DRJ]

Medicare fraud in 2009 exceeded $47 billion:

The government paid more than $47 billion in questionable Medicare claims including medical treatment showing little relation to a patient’s condition, wasting taxpayer dollars at a rate nearly three times the previous year.

Excerpts of a new federal report, obtained by The Associated Press, show a dramatic increase in improper payments in the $440 billion Medicare program that has been cited by government auditors as a high risk for fraud and waste for 20 years.”

If $47 out of $440 billion are improper payments, then this means almost 11% of the Medicare claims paid are fraudulent. The AP says the number is 12.4% “when counting both Medicare fee for service and managed care.” Worse yet, this could be old news:

It’s not clear whether Medicare fraud is actually worsening. Much of the increase in the last year is attributed to a change in the Health and Human Services Department’s methodology that imposes stricter documentation requirements and includes more improper payments – part of a data-collection effort being ordered government-wide by President Barack Obama this coming week to promote “honest budgeting” and accurate statistics.”

The money is out the door, so even if we find the culprits the overall chance of recovering most of these funds is about as high as the government getting it’s money back from Chrysler and AIG. So tell me again how government health care is going to save us money?


PS — “In the Medicaid program for the poor, roughly $18.1 billion, or 9.6 percent of claims, are believed to be improper payments.”

12 Responses to “2009 Medicare Fraud Exceeds $47B”

  1. Not to diminish the problem, but with that much looser beginning documentary standard and higher fraud number, just think about how easy it is going to be to demonstrate amazing improvement! Esppecially with the RAC audit process rolling out big time next year which has got providers quaking in their boots.

    daleyrocks (718861)

  2. I don’t trust the little president man’s dirty socialist government to audit health cares any more better than they deliver health cares, really.

    happyfeet (b919e7)

  3. And this is just one-third of the improper payments triangle, how much went to waste and abuse rather than flat out fraud?

    Soronel Haetir (2b4c2b)

  4. But Medicare has 2% Adminisitrative Fees!!!!!!

    HeavenSent (01a566)

  5. The Medicaid program is the major supplier of hard drugs sold on the streets. Welfare riders/drug users can come up with some major lies to obtain taxpayer funded drugs to sell on the streets. (Pre-hospital (EMS) care for years and seen way too much of the cons. EMS units even have a term for them, ‘frequent flyers’. Phony medical complaint, call 9-11, Ambulance ride to the ER, Rx for hard drugs, cab ride home. All at taxpayer expense.

    Scrapiron (996c34)

  6. Comment by Scrapiron — 11/14/2009 @ 6:50 pm

    We don’t call 9-11, we call 9-1-1.
    As a noted councilman in San Diego asked when that city was considering installing a 9-1-1 system back in the late-70’s/early-80’s:
    Where’s the eleven on the dial?

    AD - RtR/OS! (437868)

  7. feets – The RAC program uses independent contractors and they get to keep 9-12% of their recoveries, so guess what they are going to find a lot of. Can you say, JACKPOT for the contractors, I thought you could.

    daleyrocks (718861)

  8. What Medicare does to measure “Fraud” has at least as much to do with confusing records, confusing regs, inadequate clerical training, poor clerical and business manager performance as it does with inappropriate medical care.
    Even the IRS, when doing an audit, lets you take advantage of mistakes in your favor that are found. The feds count any overcharge as “Fraud”, even if there is as much error in under-billing from a given hospital or practice.

    There is a lot of stock given to the significance of various measurements that we have, when they really are not very good surrogate markers for the function of the system. It would be like a lawyer being allowed to base fees on the number of words taken down in notes when talking to a client, or paying your secretary based on the number of phone calls that get made in a week.

    MD in Philly (227f9c)

  9. “Much of the increase … is attributed to … stricter documentation requirements”

    Question #1 Which of these is considered Medicare fraud?
    a) Billing for supplies which were not delivered.
    b) Billing for a service which was not performed.
    c) Billing for a service which was performed but not documented properly (e.g. left family history out of the chart note on a 95 year old).
    d) Billing for a service performed but documented properly for a higher level of service [e.g. billing 99213 ($58.77) when documentation supports a level 4 99214 $88.51)]

    Quiz #2 (bonus)
    Which situations in Question #1 can lead to fines and imprisonment?

    Correct answers for both questions are a,b,c,d.

    Teflon Dad (287a17)

  10. Thank you, Teflon Dad, for help making things clear.

    Even (a) and (b) can be done by mere human error and a correction seems to be appropriate like most mistakes in business transactions.

    I hadn’t thought much about instance (d) other than realizing it wasn’t counted as an offset or mitigating factor against instance (c).

    To again compare the situation to the IRS, instance (d) would be like running into trouble with the IRS becuase you failed to itemize deductions which would have reduced your taxes by another $75.00.
    I hope nobody in the IRS gets wind of this idea :-(

    MD in Philly (227f9c)

  11. The linked article indicates that the Administration is changing the rules, and contrasts the Bush admin which “did not consider a Medicare payment improper if the medical documentation was incomplete or a doctor’s signature was illegible”.

    Is every service provided with an illegible signature truly fraud?

    Teflon Dad (287a17)

  12. I guess it is for now, although maybe it won’t be next year and the government can claim it “reduced fraud.”

    DRJ (dee47d)

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