Broken Government

Published — December 10, 2008 Updated — May 19, 2014 at 12:19 pm ET

Medicare fraud out of control

Medicare fraud runs rampant but no government crackdown yet, despite bipartisan support

Introduction

Every year as much as $60 billion in taxpayer money is stolen from Medicare, which pays for the health care of seniors and the disabled. This massive rip-off is done through various schemes, but largely by fraudulently billing for services or medical equipment they do not provide. “The legitimate Medicare recipient is hurt, the legitimate business that’s dispensing this and serving patients is hurt, every taxpayer is hurt, and we need to come down on this with both feet,” U.S. Secretary of Health and Human Services (HHS) Michael Leavitt told the press in December 2007. But no serious crackdown has taken place, despite calls by legislators from both parties. “Medicare fraud is running rampant across Florida and across the country,” Senator Mel Martinez, Republican of Florida, told The Miami Herald in February 2008 “We need to send a message to those bilking billions from the system that we won’t stand for it and the penalties are going to be severe.” A Democrat, Representative Pete Stark of California, said bluntly of HHS’s weakness in detecting fraud: “This agency is incompetent,” he told The New York Times in August. A spokesman for the Centers for Medicare and Medicaid Services at HHS put the blame on Congress: “Over the past four years, the administration has requested $579 million for the Health Care Fraud and Abuse Control Fund. Congress has not provided any of these resources.” He also noted that, despite the Centers’ insufficient resources, the agency has saved billions of dollars through their existing fraud review processes and pilot programs.

Follow-up:
HHS Secretary Leavitt has suggested increasing the amount of money spent on reviewing claims and identifying fraud, but despite sustained bipartisan criticism, the problem persists.

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