How Medicare Became a Thieves' Bazaar | Hacker News Reader

How Medicare Became a Thieves' Bazaar

dallasobserver.com

27 pointslgv7 comments

There's also the issue of crafting a business model around the rules on how Medicare pays out. This is not fraud, as it follows the letter of the law, but it's an enormous cost.

For example, ever notice those TV ads where you can get some equipment, like a scooter, "at no cost to you"? That's a business based entirely around looking for people they can get qualified for free stuff from Medicare, then they make money by billing Medicare.

Actually, the article mentions that that scooter company got busted for fraud.

I saw another one just yesterday on TV for another device "at no cost to you".

"Frontline" also had an episode investigating dental clinics that have sprouted up that were specifically designed to extract max dollars from government programs to get dental services to poor people.

Reminding me once again that there still exists problems for which Congress could apply itself and get credit for "healthcare reform" from both sides of the aisle.

What are the actual figures regarding Medicare fraud? I've seen conservative groups quote numbers like $.20-$.50 of each medicare dollar while liberal groups quote numbers like $.01-$.05

Medicare spending in 2010 was $560 billion. The article says that conservative (i.e. lowball, not Republican) estimates are that $100 billion is fraud, and adventurous estimates have it at $300 billion in fraud, but no one is really sure.

One issue is that the line between "fraud" and "creatively working around rules to make sure the doors stay open" is thin and porous.

I'm part of a grant writing consulting firm, and we've worked for many Community Health Centers (CHCs, also known as "Section 330 providers"). Most rely on some combination of Medicare / Medicaid funding, donations, and grants to keep their doors open. Medicare and Medicaid reimbursement rates are basically too low to pay for some combination of doctors, PAs, and NPs to provide care. Consequently, some combination of things happen:

* Care is so awful that it doesn't effectively exist. A patient sees a provider for one to two minutes and then gets hustled out the door with their problems put off until the next visit, since CHCs can bill by the visit, not by the time spent.

* Care is somewhat better but creatively accounted for. What if someone sees a provider for two, fifteen minute visits instead of one half hour visit?

* Some number of phantom patients receive services.

You may now call out that number three is FRAUD and THEFT and STEALING. But the virtuous organizations that don't use some form of creative accounting can't exist because they can't pay the rent, for supplies, and for providers. So there are game-theory-style incentives built in for working the system in such a way that the organization can survive. The feds know this, which is why they offer programs like the New Access Points (NAP), to throw a bone to CHCs (see here: http://blog.seliger.com/2010/08/11/the-health-resources-and-... for one place we've written about it).

Given this, what counts as "fraud?" The answer is, "It depends."

(A tangential note: we've worked for CHC clients in MSAs with a million or more people who are the only PCPs that accept Medicare / Medicaid. Specialists? Forget about it.)

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