By Robert F. Sanchez, JMI Policy Director
A story in the Tallahassee Democrat reports that “a Miami man has pleaded guilty to federal charges that he took part in Medicare-fraud schemes resulting in the filing of more than $200 million in fraudulent claims.” The story goes on to report that in the past four years, more than 1,000 people have been charged “for fraudulent billing totaling more than $2.3 billion…”Unfortunately, these prosecuted cases represent only the proverbial tip of the iceberg. Fraud is inherent — and inevitably endemic — in any healthcare system wherein cost control is generally the last thing on the minds of the providers or the patients. Why? Perhaps because both groups imagine that they’re “playing with other people’s money,” and in a sense they are: It is the taxpayers’ money being squandered by swindlers who give kickbacks to “patients” in exchange for their IDs, then bill Medicare for multiple phantom “treatments” that were neither needed nor performed.Fraud, of course, can occur when the third party paying the bills happens to be an insurance company rather than a government bureaucracy. However, insurers at least have a bottom-line interest in keeping down costs so that their rates are competitive and their profits don’t suffer. So do the patients whenever they actually have some “skin in the game” by virtue of paying for a portion of their health care through co-payments and cost-sharing.In contrast, government investigators’ motivation for pursuing Medicare fraud is generally the satisfaction that comes from the occasional press conference to announce an arrest or a conviction – which coincidentally makes their bosses look good and thereby improves their own chances for raises and promotions. Sometimes there’s even a bonus: a bit of restitution as the feds seize and sell off luxury goods that the swindler bought using funds that were supposed to go to provide health care for Medicare’s elderly patients.Alas, most fraud investigators and prosecutors also realize that they’re fighting a losing battle. They know that whenever they shut off one form of scam and send a swindler to prison, other scams and swindlers emerge to game the system and ply this lucrative trade. Worse, if this is already a systemic problem when the federal government’s principal healthcare role centers on Medicare for the elderly and on a more limited involvement with state-administered Medicaid programs for the needy, just wait until “Obamacare” kicks in.Indeed, given the oddly symbiotic relationship between crooks and law enforcement, this massive expansion of the opportunities to engage in forms of healthcare fraud could soon lead to so much swindling and investigating that it may well become President Obama’s most successful effort to create jobs.