Former official: Improper Medicare claims exceed IG estimate
Last year the Health and Human Services inspector general's office reported collecting $988 million from firms and individuals accused of making improper claims for payments by Medicare and Medicaid.
That is a nice round sum, almost $1 billion, and in the words of a statement often attributed to the late Sen. Everett McKinley Dirksen, R-Ill., "A billion here, a billion there, and pretty soon you're talking real money."
But it is not a lot of money compared to the total costs of Medicare and Medicaid -- now $550 billion a year -- and some people strongly feel that the amount of improper claims the government does not spot, and therefore pays, is far higher than $988 million a year.
Total improper claims "have got to be several multiples of $988 million," said Joseph Antos, a former high-level Medicare official who is now a health policy expert at the conservative American Enterprise Institute. "The ability to detect improper billing is far less than the ability to do improper billing."
"This has always been a big issue, no question about it," he said, adding that Ways and Means Chairman Thomas, Energy and Commerce ranking member John Dingell, D-Mich., and Ways and Means Health Subcommittee ranking member Fortney (Pete) Stark, D-Calif., had pressed hard for action against fraud and abuse in these programs.
"The problem for any administration is that while you'd like to get money back and clamp down on fraudulent billing practices, you don't want to discourage the bulk of honest doctors," said Antos.
In a statement released by his office, Senate Aging Committee Chairman Larry Craig, R-Idaho, said: "In these tight budgetary times, it is important that every dollar that the federal government spends be spent well and for its intended purpose ... But as we go after waste, fraud and abuse within Medicare, we need make sure that we do not overreact" and scare physicians into declining to participate in Medicare for fear of excessive audits and investigations.
And some experts say it is not only physicians. "Many segments of the health care industries, aside from doctors, defraud the programs," said one government source.
A spokesman said Thomas remains "very interested in curbing fraud and abuse in Medicare."
The flavor of the inspector general's report is revealed in snapshots of different cases.
In several cases resolved through a settlement agreement for a civil monetary penalty, the inspector general's office noted that the "settling party has contested the OIG's allegations and denied any liability" but settled anyhow.
Some cases described by the report involved considerable amounts of money in required payments or penalties. One really big one, according to the IG report, was a $355 million settlement by the AstraZeneca firm to help resolve liabilities "relating to marketing and pricing" of one of its drugs. A company spokeswoman for the company and spokesman for HHS said that settlement remains in effect.
Other settlements described by IG documents were smaller. For example, one was for $80,000 for a physician who allegedly received free samples of a drug from a drug company but was charged with billing "at least some of those samples to Medicare."
Another case alleged a physician had billed Medicare for free samples of drugs received from a drug company; the case involved a $64,000 settlement.
In still another case, the IG's office said a physician agreed to pay $140,000 for allegedly referring Medicare beneficiaries to a certain medical equipment company in return for kickbacks.
Antos said reducing fraud and abuse "has always been a big issue" on Capitol Hill since the 1980s, but "the rhetoric has died down" the past few years with government surpluses and the focus on the prescription drug issue.
"Now that we're back into high and rising deficits, congressional attention will focus once again on fraud and abuse," he said. "It will never be dead as an issue as long as you have Medicare paying for each individual service one by one."