MEDICARE FRAUD: Abounds Due to ‘Cozy’ Contracts
As if there weren't enough problems with Medicare, federal inspectors have discovered the "very people who are supposed to be policing fraud" -- those employees of Medicare contractors that "are supposed to be the stewards of the Medicare trust fund" -- are increasingly responsible for occurrences of fraud within the industry. The New York Times reports that although the Clinton Administration began to "crack down" on Medicare fraud several years ago, federal inspectors only recently have turned their eyes to contractors specifically, finding "pervasive weaknesses in the contractors' financial controls, and a lack of even rudimentary safeguards like double-entry bookkeeping." HHS Deputy Inspector General George Grob said his office has investigated 19 current and former Medicare contractors. In "the last two years, at least four of the 44 companies that run Medicare's day-to day financial operations in California, Colorado, Illinois and New Mexico have pleaded guilty to criminal charges in schemes to defraud the government," Grob said. Two executives at Medicare contracting companies in New York and Pennsylvania have been found guilty of similar charges. Thus far, eight companies, including Blue Cross and Blue Shield plans in Colorado, Illinois and New Mexico, "have paid more than $275 million to the Government to settle charges of defrauding Medicare, falsifying records or using money from the Medicare trust fund to pay costs that should have been paid by private insurers." The article covers the Illinois case in some detail.
Turning a Blind Eye
Despite the fact that Medicare maintains "detailed instructions" to its contractors and is "supposed to supervise their work," the GAO says "lax federal supervision has allowed problems to go undetected for years." Contractors have "inherent conflicts of interest" because they often are "corporate partners" with the same doctors they are charged with policing, the Times reports. This limits their ability to "attack" Medicare fraud, said Leslie Aronovitz, associate director of health care studies at the General Accounting Office. As a result, contractors "rarely" identify fraud and most big cases stem from whistle-blowing. Aronovitz said that "improprieties could 'recur without detection' because of weaknesses in the way Medicare officials monitor contractors." In all, HCFA has "set few standards" that would evaluate contractors and "rarely questions their performance data, in part because federal employees have cozy relationships with some of the Medicare contractors" (Pear, 9/20).