High cost of Medicare fraud

It is hard to say whether American taxpayers should be madder at the con artists who use fake addresses and stolen identifies to defraud the government or at the government managers who let them get away with it. But one thing is clear: the public treasury draws thieves the way honey draws flies, and the government has a hard time fighting them off. Keep that in mind the next time a politician proposes a new public program.

In the past month, we have learned of medical suppliers who used prescriptions from dead doctors to collect as much as $93 million in fraudulent Medicare claims, of Medicare contractors who used false addresses — including a supply closet — when bilking the government and, perhaps worst of all, of Medicare officials who appear to have condoned fraud while telling Congress they were reducing it.

Right now the government spends about $1 of every $4 spent on health care in the United States. Universal health care proposals would funnel all that money — some $2.3 trillion a year and rising — through federal coffers.

The Government Accountability Office recently set up sting operations to test how federal agencies are weeding out potential fraud.

The results, reported by The Associated Press, were discouraging. The Centers for Medicare and Medicaid Services (CMS), for example, approved two sham companies set up by the GAO for Medicare billing purposes, despite what the AP described as sketchy information and false documents. The approvals opened the door to large potential false claims for medical equipment, a problem already plaguing Medicare.

According to The New York Times, the agency told Congress that it had reduced medical equipment program fraud in 2006 to $700 million. The agency's inspector general found that more than a third of the agency's payments for medical equipment in 2006 were improperly documented, indicating potential fraud of $2.8 billion.

The inspector general also found, incredibly, that Medicare officials told auditors not to compare claims submitted by medical suppliers with doctors' prescriptions, although the auditors were legally required to do so.

"This is outrageous," rightly declared Sen. Charles Grassley, R-Iowa, a frequent critic of CMS's record in fighting fraud.

Congress should determine who was responsible for what looks like a deliberate attempt to mislead lawmakers. But Congress can't duck its own responsibility in this area. It has cut Medicare's budget for external audits, and under the influence of heavy lobbying recently rejected a plan to require competitive bids by qualified suppliers of durable medical equipment.

Now who's ready to ask the government to take on a bigger role in health care?