$1.76 Trillion “Billing Error”

By Bob Sanchez, JMI Policy Director
Posted March 21, 2012

The federal government’s gimlet-eyed auditors are usually ready and eager to pounce when they perceive a “billing error” in the maze of paperwork that physicians and hospitals are required to submit in order to get reimbursed for the services they’ve provided to patients covered by Medicare.

The penalties imposed for these kinds of innocent mistakes are often far harsher than those imposed on the crooks who annually bilk Medicare of an estimated $60 billion through outright fraud. Why the difference? The crooks rarely get caught.

Indeed, a 2010 report on the CBS News program “60 Minutes” described Medicare fraud as the most profitable crime in the United States. One of the reasons it’s so profitable is that these kinds of crimes are so difficult to prosecute.

Unfortunately, South Florida – with its legions of retirees enrolled in Medicare and its shady practitioners ready to exploit them – has gained national recognition as an “epicenter” of Medicare fraud – a dubious distinction detailed in a Wikipedia article.

Meanwhile, if you think it’s a pretty big mistake for the feds to waste $60 billion a year of Medicare funding on “care” that was either unnecessary or never provided, contrast that with the magnitude of another “billing error.”

In 2009, when President Obama was imploring a compliant Congress to pass his health-care plan, the White House estimated that implementing the legislation would cost about $900 billion over the ensuing decade.

What a difference a couple of years can make! The non-partisan Congressional Budget Office (CBO) has just come out with a new estimate of the cost of implementing the healthcare legislation over the next decade, with the expanded benefits now in the bureaucratic pipeline: a whopping $2.6 trillion.

$900 billion vs. $2.6 trillion? Oops! That’s a “billing error” of $1.76 trillion. If any private company submitting a bid for a government contract had made such a monumental miscalculation of a price, its owners would rightfully be accused of bait-and-switch tactics and would be in big trouble with the feds.

Unfortunately, there’s no reason to expect that a “billing error” of a mere $1.76 trillion would ever cause the feds to be in big trouble with … the feds. Nor is there a reason to believe that the $2.6 trillion cost won’t keep rising.

Don’t worry, though; the feds can always borrow more cash, even if it means burdening future generations with even more debt. When the diagnosis of Uncle Sam’s condition reveals a hemorrhage of red ink, there’s only one word to describe this fiscally irresponsible approach to health care: sick.

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