$2.7B in made-up claims, divided by 200 accused individuals, gives us an average of $13.5M per alleged criminal.
That's not peanuts!
That's not peanuts!
Total fraud in that case was $900 million, for a only 500 patients, or almost $2M per patient.
That seems so outside the bounds of reality that I'm questioning if it's what happened here. I can't imagine how that would pass any kind of sniff test by Medicare.
Quote from the article: "In less than two years, more than $900 million in bogus claims were submitted to Medicare for grafts that were used on fewer than 500 patients, prosecutors said."
The alternative interpretation of this is that the grafts were _applied_ to 500 patients, but potentially many many more were billed for grafts that they didn't need (and didn't receive). Maybe more feasible?
Compromised patient, injured due to basic incompetence, A Medicare probably paid a million dollars or more to treat it.
The billed numbers are almost completely made up. The insurance company (Medicare in this case) will only reimburse up to a set amount.
The reimbursement is calculated as min(billed_amount, allowed_amount). If the facility accidentally bills less than the allowed_amount, they get less than they could have. So to make sure they get 100% of the possible payout, they bill extremely high numbers to insurance.
It's a dumb system, but it's something you have to keep in mind whenever someone talks about how much things cost in the US system. With expensive procedures, products, or drugs, virtually nobody ever pays the big number. It's just a placeholder to make sure insurance payouts are not left on the table.
The provider has a list of prices called the chargemaster. The insurance (and Medicare) have lists of prices they'll pay. For private insurance, there will often be negotiations to set prices for patients with the insurer getting treatment at the provider, called the network agreement. These fall between the two lists, generally.
If you're out of network, the provider bills their chargemaster, the insurer tries to pay their price depending on the terms of the insurance. In network, the provider bills the negotiated rate and the insurer (probably) pays it.
Now what happens if the patient doesn't have insurance? The provider bills their chargemaster and the patient (rarely) pays it. If they do, confetti. If they don't, the provider graciously takes a percentage off and offers a repayment plan. They collect on a meaningful percentage of these.
The patient pays more if the chargemaster is higher.
$1798 total
-$388 Medicare paid
-$1324 Service adjustment
$86 Amount you owe.
I don't think dumb is sufficient to explain this. It's pretty easy for me to see how someone leaps from this de facto legal system to outright fraud, because the line between them is pretty thin.
I'm nearly done dealing with an instance of this myself (for someone else). Had a $1k copay that was legit per their "insurance" plan. The hospital also sent a fraudulent bill for another ~$2k rather than doing the work of figuring out how to bill "insurance" for it. Told them we'd pay in full once they presented a complete set of non-fraudulent bills. Half a year later, with me holding the hands of both bureaucracies, they finally were able to get "insurance" to pay that second bill. I told them we were ready to pay the $1k legit copay, and they told me they had taken care of it months ago using some internal charity fund. The system is an utter joke.
Why can't scammer just exercise some moderation and they get to keep scamming for a long time. No, they have to just get greedy. Greed always get you caught
This appears to happen over ~5 years or more - so that's $2.7B vs $22.5T or about 0.012% of total spending.
The reason healthcare is broken in the US is not because of fraud.
It's due to the design.
By the way, fraud is inevitable.
We might be able to save about ~1% per year on healthcare if fraud was reduced to more reasonable levels. That's not going to move the needle at all.
That's a common example but that's not actually what happens at all.
If medicare is representative, fraud is 5-10% of total spend.
https://www.aging.senate.gov/press-releases/lawmakers-join-a...
Fraud is inevitable.
The FBI estimates fraud accounts for upwards of 10% of healthcare expenditures.
One of my clients had their business roped into a multi-million dollar medicaid fraud scheme. The FBI eventually handled it but it months and a lot of work to get the feds interested.
Imagine what $2.7B could do for transit or housing or relocating migrants or student loan debt relief or wildland firefighter pay raises or invasive species remediation. Hell, imagine what even 1% of $2.7B could do for independent journalism or the arts.
Seriously, if they'd just been content with a few million and jetted off to the Caribbean it would have never been noticed. All of these medicare fraud things are always in the multi-millions before they get noticed.