Cost of Medical Fraud Could Pay for Health Care Reform

| Wed Aug. 19, 2009 6:45 AM EDT

According to reporting yesterday on NPR, the cost of medical fraud in the United States runs anywhere from $60 billion to $600 billion a year--in other words, it might actually exceed the price tag for health care reform. Instead of whining about the expense of reform measures, Republicans and Blue Dog Dems might think about saving us money by cracking down on fraudulent practices, which target both the government and private insurers. 

Obama has recently announced a new DOJ/HHS task force to combat fraud, and some versions of the health care reform bill have a measly $100 million set aside for anti-fraud measures. It seems like far too little and too late--but apparently, it's more than has been done by past administrations, or by the oversight committees, the appropriations and legislative committees whose job it is to ride herd on taxpayer funds. 

Here is a bit from the NPR report:

Medical fraud takes several forms. Most commonly, criminals get a list of patients’ names, then create fictitious doctors. They send bills to Medicare or Medicaid or health insurers for services supposedly rendered to these patients. By the time the payers figure out that the doctors they’re paying are fictitious and no service was ever rendered, the criminals have closed up shop and moved on.

Another popular form of health care fraud is the “rent-a-patient” scheme. Recruiters find people with health insurance willing to get care they don’t need, in exchange for cash or cosmetic surgery. Several years ago, insurers and the FBI said they had cracked a big case. People from 47 states were paid to come to California to receive unneeded care, including colonoscopies and surgery for sweaty palms. The doctors who performed the work reportedly charged insurers a total of $1 billion.

I suppose the libertarian Republicans would say it’s just a small price to pay for our free market system. And of course, if the government started taking a closer look at the crooks who illegally rip off the system, they might also have to deal with the crooks who rip off the system quite legally--the price-gouging insurance and pharmaceutical companies and their ilk.