Medicare Fraud

Hurting all Senior Citizens

Medicare pays health care services and suppliers for millions of beneficiaries (36 million people aged 65 and over, and individuals under 65 who are disabled), and provides payment to 1 million providers and suppliers of services. Since Medicare pays only 80 percent of Part B claims, and you or your supplementary insurer pay the other 20 percent another $1.2 billion can be expected to be paid for waste, fraud, or abuse by us or our insurer -- raising premiums. The Health Care Financing Administration (HCFA) contracts with 32 insurance companies, called carriers, who processed 623 million Medicare Part B claims in 1994.

Although the HCFA has initiated a number of actions to increase the efficiency and effectiveness of its controls over fraud, when an estimated 10% of the overall expenditure is lost due to waste, fraud and abuse, their actions are not adequate. Six or more billions lost is a clear example of something wrong.

Since Medicare Part B expenditures are only one-third of Medicare costs, you would guess that the $120 billion spent on Part A might have similar waste, fraud, and abuse amounting to another $12 to $14.4 billion. With Part A and Part B waste we can expect to see a total loss of approximately $21.6 billion. It seems to me that our federal government instead of cutting funding for Medicare under the budget balancing act they are playing should first and formost deal with this problem.

As an example reported in the Sacramento Bee: After an agonizing night spent weighing his options, Sacramento physician Donald N. ReVille pleaded guilty to 38 counts of Medicare fraud involving reimbursements to him totalling more than $300,000 for services he did not perform. He said he did not neglect patients but acknowledged falsely claiming to have spent time with them. "I became very busy and saw an opening to further my own financial gain without complying with Medicare's reporting requirements, " he told District Judge William B. Shubb. Carole Herman, president of the Foundation Aiding the Elderly said, "I think this kind of abuse is rampant, and I hope this case sends a message to doctors across this country." The good doctor faces about 20 months in prison. You figure it out, if he gets 20 months it works out at a rate of $15,000 per month sitting in a cell being housed, fed, and medically cared for by taxpayers -- not a bad rate of earning.

So what is wrong? It is obvious. Perpetrators of fraud and abuse certainly should be made to forfeit from their possessions, at least 5 times the amount, or more, if discovered. We shouldn't send them to jail -- it just costs us more. Since they are concerned primarily with possessions this is the best punishment and we should take their license to practice away.

If you have examples of fraud, waste, or abuse, and would like to post your information please send us an e-mail.