Sample Term Papers on Medicare Fraud

Medicare Fraud: The History, Incidence, Costs and Institutional Remedies

Introduction

Medicare is health insurance for the elderly in the U.S. The term Medicare fraud is used to refer to companies or individuals who look for means of dishonestly obtaining Medicare health reimbursement. Individuals and companies that engage in Medicare fraud use different techniques to achieve their objective, which is obtaining money fraudulently. Giving an accurate estimate of the amount of money that is lost because of Medicare fraud has been difficult. However, according to the Office of Management and Budget, it is estimated that 47.9 billion dollars was lost in 2010. During the same year, the total amount spent on Medicare, according to the Congressional Budget Office amounted to approximately 528 billion dollars. This paper seeks to discuss the history, incidents, costs and institutional remedies for Medicare fraud.

History of Medicare Fraud

            Medicare is a health program created in 1965. During the first ten years of its operation, there were no mechanisms put in place to control fraud. State and federal law enforcement agencies charged with the responsibility of investing criminal activities within the Medicare program were also nonexistent (National Association of Medicaid Fraud Control Units , 2014). Fraud in the Medicare program was first noted when the Congress and the public realized that there were many patients in nursing homes that were being retained by some Medicare workers in order to obtain regular funds from the program. This led to the formation of National Association of Medicare Fraud Control Units (MFCU) (National Association of Medicaid Fraud Control Units , 2014).

The U.S Congress started hearing cases of healthcare fraud in the early 1970s. The governor of New York, Hugh L. Carey together with the attorney general Louis J. Lefkowitz decided to appoint a Special State Prosecutor for Nursing Homes, Health and Social Services (National Association of Medicaid Fraud Control Units , 2014). The governor and the attorney general undertook this measure as a response to the widespread fraud in New York’s nursing home industry. In 1977, Congress also implemented measures to curb Medicare fraud by passing the Medicare-Medicaid Anti-Fraud and Abuse Amendments (National Association of Medicaid Fraud Control Units , 2014).

Incidents of Medicare Fraud

            One recent incident of Medicare fraud is evident in the case of Doctor Jacques Roy, arrested and charged with fraudulently certifying hundreds of Medicare reimbursements. Doctor Roy obtained millions of dollars for services that were never provided to patients. Doctor Roy fraudulently obtained money from Medicare by recruiting homeless people as fake patients, and then making claims for reimbursements (Thomas, 2012). If Roy is found guilty of the charges against him, he could be sentenced to life. The Medicare Fraud Strike Force has termed doctor Roy’s fraud case as the largest healthcare fraud ever committed. Doctor Roy and his co-perpetrator ran an efficient fraud scheme for years, and managed to make millions (Thomas, 2012).

Roy was hiding most of his fraud money in foreign bank accounts especially in the Cayman Islands. According to the charges brought against him, Doctor Roy was planning to change his identity and leave the U.S in order to avoid prosecution. Another incident of Medicare fraud that was being investigated in February this year is the case of a concord doctor, Spencer Wilking. Doctor Wilking pleaded guilty to taking part in activities that defrauded 27 million dollars from Medicare. Doctor Wilking aged 65 years was the head of Waltham home health agency in the capacity of medical director (Ailworth, 2014). Wilking was accused of conspiring with two others to commit fraud by forwarding bills to Medicare for services that were never offered to patients. Wilking can be sentenced up to a maximum of ten years in prisons if found guilty of charges brought against him (Ailworth, 2014).

The Costs of Medicare Fraud

            As stated earlier, it is difficult to determine the exact amount of money that is lost in Medicare related fraud. Some estimates have placed the figure at 850 billion, 100 billion, and others 60 billion. However, the federal government has stated that it loses 60 billion of taxpayers’ money in Medicare fraud every year (Mcfadden, 2010). Fraudulent clinics, medical supplies firms and pharmacies are the major perpetrators of Medicare fraud. Medicare fraud has become a lucrative venture that has even attracted former criminals and drugs dealers. For example, in Florida, fraudsters buy pharmacies that have Medicare licenses and patient databases. Such pharmacies are sold for just 45,000 dollars (Mcfadden, 2010).

The owners of these fraudulent pharmacies would then bill Medicare for services that were never offered; and the patients do not exist. In 2007, the Medicare Fraud Strike Force visited some 1,600 businesses offering health care services in Miami and found that 481 of these businesses did not exist, and yet they billed Medicare for 237 million (Mcfadden, 2010).

Institutional Remedies to Medicare Fraud

            One of the institutional remedies for Medicare fraud is for states to make eligibility requirements for an institution to vend Medicare services more stringent. For example, the state of Illinois has already implemented such a measure, and it requires that small firms that are more likely to engage in fraud to undergo criminal background checks and have their workers’ fingerprints checked before being approved. After losing 250 million over a period of years, the state of California now requires that new Medicare vendors be placed on probation for at least 18 months (Malanga, 2014).

Investing in advanced technologies that can monitor Medicare program for suspicious activities can also be effective in curbing the rampant fraud. For instance, the state of Texas has hired a group of computer scientists from the University of Texas to implement their latest mapping software of Texas’ Medicaid database. This technology enables authorities in Texas to identify doctors and pharmacists who source for patients far away from their location. This can be a sign of a possible fraud (Malanga, 2014).

Another remedy that has the potential of curbing Medicare fraud is integrating Medicare billing data with state Medicaid database. The two sets of records can then be examined by advanced computer software at once. It has been observed that healthcare providers that defraud Medicare are also more likely to try to defraud Medicaid (Malanga, 2014). For example, a pilot computer program in California can examine the amount of time a doctor takes in providing certain medical procedures. Doctors with Medicare and Medicaid bills that average to 24 hours, in all workdays, are more likely to be cheating. The most technologically advanced method that can be used in curbing Medicare fraud is the use of biometric data and fingerprint at the doctor’s office. Texas is currently running a pilot program on the possibility of using this technology (Malanga, 2014).

 

References

Ailworth, E. (2014, February 26). Concord doctor pleads guilty to Medicare fraud. Retrieved February 28, 2014, from Boston Globe Media Partners, LLC: http://www.bostonglobe.com/business/2014/02/26/concord-doctor-pleads-guilty-medicare-fraud/PaSeDjA7PFlpCsu4s972DK/story.html

Malanga, S. (2014). How to Stop Medicaid Fraud. Retrieved February 28, 2014, from City Journal: http://www.city-journal.org/html/16_2_medicaid_fraud.html

Mcfadden, C. (2010, March 17). Medicare Fraud Costs Taxpayers More Than $60 Billion Each Year. Retrieved February 28, 2014, from ABC News: http://abcnews.go.com/Nightline/medicare-fraud-costs-taxpayers-60-billion-year/story?id=10126555

National Association of Medicaid Fraud Control Units . (2014). History. Retrieved February 28, 2014, from http://www.namfcu.net/about-us/namfcu-history

Thomas, A. C. (2012, February 28). Biggest Medicare Fraud in History Busted, Say Feds. Retrieved Febraury 28, 2014, from ABCNews: http://abcnews.go.com/Blotter/biggest-medicare-fraud-history-busted-feds/story?id=15809129