The Medicare Bust

Remember Senator Tom Coburn and his Waste Book 2010?  One of the biggest examples of wasted federal spending he cited was Medicare fraud.  He recounted the story of a single criminal gang that suckered Medicare out of $35 million through fraudulent claims.

Today, federal authorities made over a hundred arrests, taking down scam artists accused of bilking Medicare for better than $225 million in illegal claims.  The operation involved more than 700 law enforcement officers in nine different cities.

The Associated Press gives us some charming examples of these characters, including a podiatrist who billed Medicare $700,000 for unnecessary toenail removals, a Russian gang that herded old people into a clinic so they could bill for “massage therapy,” and a proctologist who billed $6.5 million for hemorrhoid removals he never performed.  Most of the people arrested were doctors, nurses, or therapists.

This kind of thing has been going on for years, costing the government billions of dollars per year.  Why the sudden mobilization to put a stop to it?  Politics, of course.  As the AP explains, “Stopping Medicare’s budget from hemorrhaging that money will be key to paying for President Barack Obama’s health care overhaul.”  You weren’t going to see this kind of effort when it was just taxpayers getting ripped off.

How does this kind of pervasive fraud happen?  The New York Times quotes U.S. attorney Preet Bharara explaining that Medicare is a “user-friendly” program, which “reimburses doctors in a timely fashion,” and got “sucker punched” by these massive acts for fraud (which, you should remember, have been going on for years.)  The AP describes it as a “pay and chase system, paying providers first and investigating suspicious claims later.”  Often much later, as anyone who has ever worked with Medicare will tell you.

In other words, billions in fraud flow through the Medicare system because the people who could most quickly blow the whistle – the patients – have nothing to do with paying for the services they receive.  You bump into a Russian gang on the street, they haul you in for a nice back rub, and you’re out of the picture by the time they submit the fraudulent claim.  Many years later, the bureaucracy might eventually rouse itself to notice the large number of big physical therapy claims emanating from people who have six syllables in their last names, working out of a building that also sells discount liquor and lottery tickets.

A fool and his money are soon parted.  The government is even quicker to part with your money.  ObamaCare will drive a lot of legitimate doctors out of practice, but it will be a carnival for con artists, because no one who receives medical care will have the foggiest notion what they are paying for, or what it should really cost.