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Easy money: Medicare fraud| costing taxpayers $60 billion

With health care in the news again as the U.S. Supreme Court considers the constitutionality of the 2010 health care reform law, it’s a good time to refocus the nation’s attention on a serious problem with health care in the United States — fraud.

• Health care costs have been rising rapidly for decades.

• The United States spends twice as much, per capita, on health care as any other nation, and gets less impressive results.

• Most experts say that unsustainable costs in the Medicare and Medicaid programs are on track to bankrupt the country.

These facts are generally well known, even if the solutions remain elusive.

Less well known is the scale of health care fraud and abuse.

Medicare fraud, for example, is estimated at $60 billion a year. That’s a substantial part of the $555 billion that was spent on Medicare in 2011.

It seems that every few months there is another story of another record-setting Medicare fraud arrest.

In September, federal authorities charged 91 people in eight cities with attempting to cheat Medicare of $295 million.

In February, a $250 million scheme to defraud health insurance companies resulted in the arrest of 10 doctors in nine clinics in New York City.

The New York health care fraud ring was based in Brighton Beach, where Russian immigrants well-versed at finding shortcuts around the Russian bureaucracies have targeted America’s health care system.

Also in February, federal officials shut down a $375 million Medicare fraud scheme in Texas. A Dallas-based doctor is accused of running a “boilerplate” operation that turned out bogus Medicare claims for services never provided. The scheme also recruited homeless people as fake patients.

In September 2010, the CBS television program “60 Minutes” featured a segment on Medicare fraud in Florida, where the illegal drug trade is rapidly being replaced by Medicare fraud as the crime of choice in the Sunshine State. Law enforcement officials say criminals are drawn to Medicare fraud because it’s lucrative, easy and does not attract the violence of the illegal-drug trade.

Health care fraud requires not much more than finding patient lists or names, recruiting a corrupt doctor and renting a storefront in a strip mall. Sometimes it involves filing bogus claims for patient care, such as medical treatments or drugs. Other times bogus bills are for medical equipment never purchased or provided to patients. False claim forms are sent to Medicare, and then in a few weeks, the money just flows into the criminal’s bank account.

Committing Medicare fraud is apparently incredibly easy — “like taking candy from a baby,” according to a one-time criminal who made millions of dollars through Medicare fraud and who was featured on the “60 Minutes” segment.

Federal officials claim they are getting a handle on Medicare fraud. But part of the problem is the current system of paying all claims, even suspicious ones, and then only later conducting investigations where fraud is suspected. That system, known as “pay-and-chase,” sometimes recovers Medicare money paid on bogus claims, but more often not. The criminals are way ahead of law enforcement and have moved the money offshore or simply fled the country.

The Associated Press reported that last summer Medicare began using a new $77 million computer system to stop Medicare fraud. But, the AP reported recently, in more than six months of using the new sophisticated program, the savings to taxpayers was just $7,591. Hearing that report, Sen. Tom Carper, D-Del., said he hoped Medicare officials had “left off some zeros.” They hadn’t.

So, while the Supreme Court case challenging the constitutionality of the 2010 health care reform law focuses the nation’s attention on health care, Americans should be reminded of the scope of Medicare fraud and how ineffective federal officials appear to be at stopping it.

If Medicare fraud could be stopped, and the $60 billion a year lost to fraud were spent only for legitimate health care services for older Americans, the U.S. health care system would be far less of a financial drain on taxpayers.

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