Medicare Fraud

Medicareless

Are we doing all we can to prevent Medicare fraud?

Last Friday, the Wall Street Journal[http://online.wsj.com/article/SB10001424052748704657704576150293189313156.html] reported that 114 doctors and other professionals have been arrested for fraudulent Medicare claims, ranging from “unbundling” procedures that should have been billed together for a lower cost, to charging for extensive and expensive procedures that were simply never performed. The FBI crackdown led to arrests in nine metropolitan areas across the US, uncovering roughly $240 million in fraud.

This series of arrests is an interesting development in the world of Medicare fraud—the doctors worked alone or with few accomplices, rather than in a network. Compare that to the 2010 arrest of a ring allegedly led by Armen Kazarian. In the Kazarian ring, the fraudulent claims are thought to have been submitted by non-doctors using the stolen identities of real doctors and patients. Authorities claim the network brought in $100 million in fraudulent revenue, according to MSNBC[http://www.msnbc.msn.com/id/39657964/ns/us_news-crime_and_courts/].

Neither of these enforcement crackdowns is even vaguely assumed to be a majority of, or even a major portion of the total Medicare fraud that exists in the country today, and the money recovered by both the 2010 and the 2011 operations combined would account for seven hundredths of a percent of the $452 billion dollars in federal spending on the program in 2010. But if Medicare is seen as a program that is easily gamed and poorly policed, it seems likely that in the long term, it will cease to perform its intended function. Indeed, in our politically turbulent time, it may one day disappear completely.

Dow Jones, last month, filed papers to obtain access to Medicare records. If Dow has its way, a 1979 ruling in favor of the American Medical Association will be overturned, allowing the public to see the records. The AMA’s concern, then, and most likely now, is privacy. And this is where it gets tricky. If the records are allowed to remain completely private, the Medicare Fraud Strike Force (consisting of FBI, Health and Human Services, and Department of Justice officials) will be only body that can provide Medicare oversight. If the records are opened, patients’ rights may be violated.

This appears to be an unresolvable situation, but if doctors and patients want programs like Medicare to continue, they’ll have to prove to a hostile crowd that the programs work, and that means both decreasing the amount of money billed and decreasing the amount of fraud that’s committed. It means moving beyond a perfunctory nod to the education of doctors and patients on identifying and reporting fraud, waste, and abuse.

Take, for example, the way to get teachers to stop cheating for their students on proctored exams. Early in the last decade, Steven Levitt and Brian Jacob, experts in behavioral economics, were hired by then-chair of Chicago Public Schools, Arne Duncan (now head of the US Department of Education), to find out which teachers were cheating. Having selected some suspicious and some non-suspicious teachers for the test, they allowed the teachers to proctor their exams like normal, then re-tested the students with different proctors. The results were predictable; suspicions were largely confirmed. The upshot, though, was that after the resulting wave of firings, cheating in the next year declined 30%.

Unfortunately, we're still left with the question: how do we beat Medicare fraud?