Obama administration takes initiative against health care fraud

Paramedic Bruno Fernandini prepares a room for the next patient at the University of Miami Hospital's Emergency Department on April 30, 2012 in Miami, Fla.

Jeff Horwich: Later today, the Obama administration will announce a new initiative against health care fraud. They’re trying something new this time: Teaming up with private insurers. Marketplace’s Nancy Marshall-Genzer joins us now live, from Washington. Good morning, Nancy.

Nancy Marshall-Genzer: Good morning, Jeff.

Horwich: Nancy, what do you know about what the administration is going to do?

Marshall-Genzer: Jeff, the headline here is that the administration is going to work with insurance companies to ferret out fraud. Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius are spearheading this. And their plan is for federal investigators and private insurers to look at claims data for Medicare, Medicaid and private insurance. This is a rare instance where the government and private sector are working together.

Horwich: And what types of fraud will they be looking for?

Marshall-Genzer: They’re looking for patterns. For example, if a doctor billed for more than 24 hours in a day. I talked with Vivian Ho about this. She’s a healthcare economist at Rice University. She says investigators also compare healthcare providers in a given area.

Vivian Ho: So if there is one particular provider that’s providing a much higher rate of expensive diagnostic tests, say 400 or 500 percent more of those diagnostic tests than other providers in the area, then that’s a signal that there’s something suspicious going on.

Horwich: How big a problem is fraud?

Marshall-Genzer: Ho says the Center for Medicare and Medicaid services estimates that as much as $70 billion of the claims it pays out every year are fraudulent. Ho also says, for every dollar the government spends investigating fraud it gets $17 back.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.
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Below you will see a report that shows Medicare alone accounts for an estimated $60-80 billion in losses a year. Medicaid is thought to account for that amount and more. So you are looking at $200 billion in losses to entitlements each year.

The Federal Government's attempt to increase enforcement is welcomed, but we see that the basic groundwork has not been laid so seriousness is questionable. Congress and state legislatures have deliberately left fraud laws absent or vague to prevent enforcement as we are seeing with financial fraud so goes it with health fraud. Secondly, Congress has defunded the Justice Department's white collar crime agencies just as this fraud is exploding. We know that fraud units are self-sustaining but we hear the excuse of funding for the lack of investigations at all level of government.

All retail businesses place a tax surcharge on its products designed to offset losses to theft, pushing these losses off to the customer. One would think the the government would, in its mission of serving and protecting the people, enact these same surcharges on the health sector to bring back the trillions stolen through fraud and to combat fraud in the future. All of these examples are the top solutions for this problem with fraud yet we hear none of it in mainstream media. None of our elected officials, whether local, state, or national make any mention of these solutions. So it is hard to take seriously any announcements by Eric Holder......the anti-justice Justice.

Medicare Fraud Costs Taxpayers More Than $60 Billion Each Year
March 17, 2010
A four month "Nightline" investigation into Medicare fraud makes one thing perfectly clear: this is a crime that pays and pays and pays. The federal government admits that a staggering $60 billion is stolen from tax payers through Medicare scams every year. Some experts believe the number is more than twice that.

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