"Healthcare Fraud Runs Rampant Across the Nation" by Matthew Scarcella

For years, unethical physicians and healthcare facilities have been bilking the federal government’s healthcare programs out of billions of dollars.  According to the Federal Bureau of Investigation, there are at least eight different types of Health Care Fraud that are constantly committed.  The schemes range from “Billing for Services not Rendered” to “Upcoding of Services” and more.  Billing for Services not Rendered, or charging for procedures not performed, is the primary fraudulent issue. Over the years, these tactics have become more complex and therefore it is more difficult to intercept them early enough to halt them in their tracks.  However, progress is slowly being made and more swindlers are finding themselves behind bars.

Currently, there are countless physician offices that continue to process information with paper charts.  With these systems, minimal information is documented.  For example: the diagnosis may simply be referred to as “cough,” and the subsequent plan of treatment will simply say “Benadryl.”  The Center for Medicare & Medicaid Services, CMS, is currently implementing a new regime in which all physician or healthcare practitioners (which includes hospitals, doctor’s offices, home healthcare services, etc.) must be using electronic medical records, or EMRs.   The EMRs are formatted so that doctors must comply and target each individual item on the prepopulated text.  With this compliance, it is far easier to assess what the doctor is doing for the services he is charging for.  This is one way in which CMS is following up on healthcare fraud.  Adhering to these basic standards, chart review is performed, where both Medicare and insurance companies review a group of facilities’ notes and charts, to see exactly what was done and compare it to what was billed.  This procedure helps to eliminate Upcoding of Services. 

One such case of fraud involves an incident earlier in 2012, centered in the Brighton Beach neighborhood of Brooklyn, NY.  In this case, ten doctors took advantage of no-fault claims in nine different clinics across three boroughs of NY.  According to court pages looked over by The New York Times, “the ring sought reimbursement from so many excessive and unnecessary medical treatments that it had set up three separate billing processing companies just to handle the paperwork.”  Even though they were caught, that specific scheme is as elaborate as they come.  Also, this particular scheme was called “the largest single no-fault insurance fraud case in the nation’s history” by Preet Bharara, the United States attorney in Manhattan.  Brighton Beach is unfortunately a notorious area for healthcare fraud.

A more intriguing case, and one that was actually caught on tape, is one that involves Medicare fraud from McAllen, Texas.  In this astonishing case, an 82-year old woman went undercover and was recorded having a conversation with a doctor.  In the video, the woman clearly states that she is in perfect health and has never had any problems.  However, the next day a nurse came to her house in order to treat her for diabetes and other problems that she was supposedly diagnosed with.  According to ABC News, “the overall diagnosis of the undercover grandmother’s health could have provided the justification for what could be tens of thousand dollars a year worth of unneeded treatment and medical supplies and equipment.”  This is only one incident of many and when you look at all the possible ways of committing fraud, you can see how billions of dollars come into play.

The rate at which healthcare fraud has been increasing in the nation is stunning.  No matter how diligently authorities crack down on fraudulent scams, there will always be a new one around the corner.  However, based on information from the United States Department of Health & Human Services, on April 4th, 2012, we can see that there is some hope.  On this day, the Obama administration announced that “in 2011, HHS revoked 4,850 Medicaid providers and suppliers and deactivated 56,733 Medicare providers and suppliers as it took steps to close vulnerabilities in Medicare.”  This is definitely a step in the right direction and the Obama administration is slowly making progress in these traumatic times. 

Works Cited

Chuchmach, Megan.  "Exclusive: Undercover Grandma Catches Medicare Fraud on Tape."  ABC News.  1 Mar. 2012.  Web.  30 Oct. 2012.  <http://abcnews.go.com/Blotter/undercover-82-year-grandma-catches-medicare-fraud-tape/story?id=15818462#.UJCQO_7ANeC>.

Rashbaum, William K.  "A $250 Million Fraud Scheme Finds a Path to Brighton Beach."  The New York Times.  Ed. Jill Abramson.  29 Feb. 2012.  Web.  30 Oct. 2012.  <http://www.nytimes.com/2012/03/01/nyregion/dozens-said-to-be-arrested-in-health-care-fraud-scheme.html?pagewanted=1&tntemail0=y&_r=1&emc=tnt>.

United States.  Dept. of Health & Human Services.  HHS, Department of Justice highlight Obama administration efforts, Health Reform tools to combat Medicare fraud.  4 Apr. 2012.  Web.  30 Oct. 2012.  <www.hhs.gov/news/press/2012pres/04/20120404a.html>.

United States.  Federal Bureau of Investigation.  Financial Crimes Report 2010-2011.  2011.  Web.  30 Oct. 2012.  <www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011/financial-crimes-report-2010-2011#Health>.

An Overhaul of the Medicare Card System?

The Medicare Identification Card, which evidently presents the SSN of the person it belongs to, may be undergoing a change to help prevent identity theft.  However, according to insight from CMS over at USA Today, if the change were to be implemented, it will cost approximately $843 million.

Should we really be spending money, time and resources on such an issue?  Yes, identity theft is a huge problem, but why wasn't this thought of years ago, before the change would cost such a significant sum? 

Middle Class Will Suffer Drastically if Obamacare is to Prevail

According to James C. Capretta and Tom Miller over at Economic Policies for the 21st Century, the tax raises due to Obamacare will be astronomical for middle class families over the next few years in order to help a marginal number of people.  Evidently, in return for paying these taxes, the middle class families themselves will actually be receiving worse Medicare benefits than their parents.  Does anyone else see something wrong with this?

Perhaps the candidates have reached a consensus in order to completely eradicate health care for the middle class over the next decade.  Even if that wasn't a mutual agreement between them, they are both definitely paving the path towards achieving that goal.

Increasing Premiums and Medicare Fraud? Oh My!

Both candidates mentioned plenty of outstanding sums and fees during the Presidential Debate last week.  Seeing as how all of these numbers being thrown around are terribly confusing, Jen Christensen puts a number of issues into perspective over at CNN.

Evidently, even though health care recipients are paying more in co-pays, deductibles and other various billing issues, which have been steadily increasing since 2001, the majority of the problem is due to the increase in cost of health care and is not actually due to the current President or even the previous one.  Who would have thought?  Technology is advancing and the cost to process tests and order scans is subsequently increasing, and by a very large percentage at that.  Of course, even though the medicinal field keeps undergoing new scientific discoveries that are being incorporated into new methods of diagnosing patient conditions and furthermore treating said conditions, people just take it for granted that their insurance premiums will not go up.

One of the issues that Obama brought up, which Christensen so thoughtfully mentioned, was the fact that Medicare and Medicaid fraud eat up an enormous portion of the budget and that more should be done to stop it.  Looking deeper into the issue over at The New York Times, we can actually see that more is finally being done.  "Ninety-one people including doctors, nurses and other medical professionals were charged criminally after an investigation of Medicare fraud that involved $430 million in false billing in seven cities, officials said on Thursday."  This astonishing find happened just last week.  Reading further, it becomes apparent that another such incident occurred earlier in the year.  With everyone so casually taking advantage of the system, the charges on Medicare and Medicaid are practically compounded, adding up to billions.

Hopefully these busts continue and perhaps if they do and fraud becomes less easy to commit, Medicare may be able to decrease its costs in the coming years.

The [$716 billion] Phantom Menace

$716 billion "cut" from Medicare?

Currently, one of the most popular campaign-trail topics is a scary $716 billion cut from the Medicare budget that will go to help fund Obamacare.  As a New York resident nowhere near the retirement age, I can only imagine the creepy, black-and-white attack ads being run in Florida on this issue.  I can also only hope [in vain, I suspect] that those ads explain the claim better than the candidates are doing in their debates.

Fortunately, Politifact has come to our rescue with some answers on where this $716 billion figure comes from:

1. Obamacare includes cost-saving measures designed to lower the cost of Medicare.  Some of the savings comes from reducing payments to hospitals with high re-admission rates, while some savings comes from cuts in the Medicare Advantage program (supplemental, private insurance).
2. The CBO's analysis of Obamacare found that those measures should lower future costs to Medicare by about $716 billion over the next ten years.

Thus, Medicare's future budget requirements should be lower due to these cost-savings measures.  

Further confusion comes from the fact that these cost-saving measures were included in the Obamacare law. This was done so that the cost of Obamacare would seem lower when the CBO scored the law prior to passage.  In effect, this makes the Medicare cost-savings measures serve as a funding mechanism for the Obamacare programs, which in turn fuels claims that Obama is robbing Medicare to pay for Obamacare.

Healthcare Administrative Costs: Medicare vs. private insurance under Obamacare

A major piece of Obamacare, President Obama’s signature achievement of his first term, was a new requirement that private insurers spend at least 80% of their premium dollars on care, leaving the remaining 20% to cover administrative costs and profit. This requirement was a response to a common criticism of the private health insurance industry: Too many premium dollars going to administrative costs and profit, and not enough going to actual healthcare. Indeed, much has been made recently of the rebate checks that Obamacare forced some private insurance companies to issue to their customers in order to comply with the new requirement. There is, however, one familiar health insurance system that is reported to have extremely low administrative costs: Medicare. This article will compare administrative cost levels among private health insurers and Medicare.

First Presidential Debate Overview: the Healthcare.

The first Presidential debate took place on October 3rd at the University of Denver in Denver, CO.  One of the main issues discussed was the issue of healthcare reform. Although a great amount of time was devoted to this problem, in my opinion, neither of the candidates was able to shed light on the concerns of the American people.

The main topic being the project Obamacare, President Obama started his argument with three main points. The first was that the Affordable Care Act does not concern the people who already have insurance and moreover, it regulates its cost. He also mentions  that under his new program, people with existing policies will be getting rebates if their insurance company spends more than 20% of its profit on infrastructure and CEO bonuses rather than on customers’ benefits. Second, he emphasized that for people who don’t have coverage, the cost to get it would be 18% less than before. Lastly, he notes that this model worked really well in Massachusetts, referring to his opponent’s notion of rejecting something that he himself supported in his own state. Governor Mitt Romney in response agrees that the major task of the reform is to lower the cost of health care, but not through Obamacare. He addresses statistics and finds that ¾ of small business owners will reduce their hiring potential if they will be obligated to provide insurance, which can potentially lead to a job loss in a private sector. “I like the way we did it in Massachusetts," Romney says, but proposes to leave this decision up to the State government. Nevertheless, Governor does not explain why if it works on a State level, it cannot be exercised on a Federal level.

Governor Romney also addresses the problem of Medicare, precisely the $716 billion dollar cut under Affordable Care Act reform. In his opinion, making Medicare a voucher system will give people a choice of insurance, which will create competition, and that will automatically regulate the cost. In response to that President Obama mentions that the goal of any private insurance is to make a profit, which is why Medicare will always cost less. Obama does not give any comment on the $716 billion cut and tries to avoid this subject. It is also necessary to note that the main reason for cuts is a huge federal deficit. Although Governor Romney actively criticized Obamacare, he does not specify how his program will deal with this deficit. Moreover, Congressional Budget Office reports that repealing the health care law would increase the federal deficit by $109 billion over ten years.

Democrats and Republicans still undecided on a solid solution to the Medicare funding issue.

Despite the fact that election time is just around the corner, it seems that neither Obama nor Romney can propose a complete solution to the Medicare issue as of yet.  Aside from the obvious slurs each party is throwing about how the other wants to cut Medicare funding, the key details behind said parties' ideas have not yet come to fruition.  While Romney's proposal mainly focuses on a voucher system, he is still being surprisingly vague.  On the other hand, Obama firmly believes that a voucher system is definitely the incorrect way to go and that, perhaps, a bill might be the solution.

According to The Huffington Post, Romney's plan would opt to change Medicare so that "competition among insurers will keep costs in check."  Romney believes that shifting people under the age of 54 onto a different type of Medicare plan will cut costs, but that it would not affect current beneficiaries.  While this may seem like an interesting proposal, it can be detrimental to people who are permanently disabled.  As of today, many people receiving Medicare are capable of working at least a part-time job and simply choose not to.  As a future consequence of this, the people who are permanently disabled and unable to work at all may end up paying more out of pocket than they can afford.

Obviously against a voucher system, Obama plans to increase the amount of money collected from Medicare recipients who make over a certain salary each year.  Additionally, "he also would hit newly joining baby boomers with a series of fees."  While this could perhaps be a potential issue solver, the proposal may not go over well with the generation before us, who are rapidly closing in on retirement age.  This generation has paid countless taxes towards insurance systems and as a consequence for being forced to pay said taxes, they are being rewarded with more fees and a possible drop in quality of insurance coverage for themselves when they reach the age for retirement.

Perhaps the Democrats and Republicans should focus on solidifying their plans and actually putting thought into them instead of wondering how they can get more votes by ruining the reputation of their opponent.

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Unintended Consequences?

Promoted by the Bush and Obama administrations as a cost-cutting measure, have electronic patient records actually led to increased healthcare costs?

According to an analysis by the New York Times, the push to streamline patient record keeping through federal subsidies for electronic records systems may end up increasing costs to Medicare.  The federal government has provided billions of dollars to hospitals to upgrade to the new electronic systems, in hopes of "improv[ing] efficiency and patient safety", in addition to reducing healthcare costs due to misdiagnosis and duplicate medical tests.

However, several doctors and healthcare experts interviewed by the Times say that the new systems make it easier for hospitals to "upcode", an industry term for defrauding Medicare by using medical codes for care that was never received by the patient.

The Times article quotes a Health and Human Services Department spokesperson stating that Medicare "has strong protections in place to prevent fraud."

Update:  The federal government has responded to the original story, sending a stern letter to hospitals discouraging the "gaming" of the system described above.