U.S. Senate committee revealed last year that public health insurer Medicare had paid as much as $92 million from 2000 to 2007 for medical services or equipment ordered or prescribed by doctors who were dead at the time.

Healthcare fraud said to cost U.S. taxpayers hundreds of billions of dollars a year has garnered increased attention amid the congressional debate about overhauling the U.S. healthcare system.

Experts like the FBI’s John Gillies say the problem has been getting worse all the time, as mob figures and violent criminals are lured by fabulously easy money and relatively light prison sentences into fraud targeting Medicare, the federal health insurer for more than 43 million elderly and disabled Americans.

Gillies, special agent in charge of the FBI Miami Division, told Reuters in a recent interview, “There are so many schemes involved. Take any aspect of the healthcare industry and there’s a fraud going on in there right now.”

The cases often involve multimillion-dollar schemes featuring bogus suppliers of wheelchairs, or other so-called durable medical equipment devices, and sham infusion therapies for the treatment of HIV and AIDs patients.

The FBI estimates that fraud accounts for 3 percent to 10 percent of U.S. healthcare expenditure per year, and Gillies said it could easily cost about $200 billion annually.

The National Healthcare Anti-Fraud Association, an organization of about 100 private insurers and public agencies, estimates that some $60 billion, or about 3 percent of total annual healthcare spending, is lost to fraud.

Thomson Reuters report released on Oct. 26. The report said that in 2007, when the United States spent nearly $2.3 trillion on healthcare and both public and private insurers processed more than 4 billion health insurance claims, fraud was estimated to reach as much as 10 percent of annual healthcare spending.

The Justice Department and Department of Health and Human Services launched a special strike force in Miami in 2007 to combat Medicare fraud in South Florida and similar units have been set up in Los Angeles, Houston and Detroit.

But critics say far more is needed in terms of meaningful steps to attack fraud in healthcare, which drains the system of resources and forces up insurance premiums.

Peter Budetti, who chairs the Department of Health Administration and Policy at the University of Oklahoma’s College of Public Health said, “We haven’t really enlisted all of the troops.”
Again he said, “Even though there are a lot more resources going in now, it is still grossly inadequate compared to the amount of fraud.”

Fighting fraud effectively can seem expensive, especially in economic hard times when state governments are scrambling to plug gaping budget holes. But as Budetti said the benefits far outweigh the costs of detection services such as data mining to root out fake billing scams and forms of fraud.

“Every study that looks at what the return on investment is for fighting fraud shows anywhere from $5 to $7 to as much as $15 to $17 returned for every dollar spent,” said Budetti, who formerly headed Taxpayers Against Fraud, a non-profit public interest watchdog group.
Without adequate investment, at the state and federal level, criminals will continue to gorge on healthcare at the expense of taxpayers, Budetti and other experts say.

In the past, the Health Department’s Office of Inspector General has documented significant numbers of paid Medicare and Medicaid claims for patients who were already dead at the time when they were supposedly being treated.

Public healthcare officials were embarrassed recently by renewed focus on a report from the Senate’s Permanent Subcommittee on Investigations about millions of dollars paid for medical services and equipment prescribed by dead doctors.

In congressional testimony in May, Malcolm Sparrow of Harvard’s Kennedy School of Management cited the dead as a glaring example of how much more needs to be done to properly excise the cancer of fraud from healthcare.

The healthcare industry does a terrible job of crime control, Sparrow told a Senate panel, with almost no procedures to routinely verify that medical claims presented were true, or that services provided were medically necessary.

“Criminals, who are intent on stealing as much as they can and as fast as possible, and who are prepared to fabricate diagnoses, treatments, even entire medical episodes, have a relatively easy time breaking through all the industry defenses,” he said.

Senator Jay Rockefeller, the West Virginia Democrat who chairs the Senate Commerce, Science and Transportation Committee, is among lawmakers preparing to champion new anti-fraud measures in Congress.

Rockefeller told to Reuters, “Fraud is a crime against the American people, imposing billions in hidden costs to consumers and law-abiding (healthcare) providerr.”
“Congress needs to put the resources and teeth behind the effort to crack down on fraud,” he added.

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