Why Medicare Cheats Get Away With It

While thousands of healthcare providers have millions in Medicare reimbursements held up because of RAC audits, how is it many accused of widespread Medicare fraud were able to keep the reimbursement spigot wide open, collecting millions in imaginary claims?

According to LA Weekly, because it’s easy.

In “How Medicare Fraud Became the Nation’s Most Lucrative Crime,” writer Chris Parker has assembled a rogues’ gallery of Medicare cheats, a wide survey of the types of individuals and organizations who bilk Medicare out of an estimated $100 billion a year. There are, as you have come to expect, the motorized chair magnates, the fake emergency shuttle carriers, the mom and pop pharmacies who outbill Walgreens. But there are other examples from groups you might not normally suspect:

Those with political connections. Parker opens with Riverside General Hospital in Texas, which got away with various forms of welfare fraud for more than 15 years after it was first suspected. For Riverside it was friends in high places, including a U.S. Representative and a governor.

Those with organized crime connections. Parker found examples of many former convicted criminals who moved into the Medicare reimbursements where the big money is. The reputed head of the Armenian mob in Los Angeles opened a series of fake clinics across the country, and submitted millions in reimbursements from doctors whose identities they stole. “They knew nothing about medicine, sending Medicare fake bills that showed eye doctors doing bladder tests, obstetricians testing for skin allergies, and dermatologists billing for heart exams.”

State governments. The article details two schemes by the states of Minnesota and New York to use creative accounting to bilk their colleagues in federal government. In Minnesota, Parker suggests there was a conspiracy between HMOs and the state’s department of health and human services to boost the federal subsidies, “turning Medicaid into a cash cow.” In New York, the state’s mental health centers “were charging the feds $5,000 per day per patient. Arizona, by comparison, charges $200 a day.”

Parker also explains how, in light of widespread fraud, the federal government has stepped up enforcement. The benefit, at least to the American public, has been a dramatic increase in fraud detected and stopped. One side effect has been that those who abide by the law suffer, in the form of excessive and pervasive RAC audits and record requests.