Here are the facts: Medicare is one of the largest insurance programs in the United States, and every year it helps insure more than 49 million seniors and other beneficiaries. And, for a variety of reasons, its prognosis is anything but certain; estimates indicate that Medicare will be bankrupt by 2026.
Contributing factors include an aging baby-boomer population, technological advances in treatment that increase costs, as well as new legislation designed to reduce entitlement expenditures while increasing physician fees.
Further compounding the program’s grim diagnosis is the amount of waste, fraud, and abuse both on the individual and organizational provider levels. Recent overhauls in health care legislation have put in place significant reform programs that aim to curb every aspect of abuse or improper payments in the program, but these programs have only scraped the tip of the iceberg.
At the same time, in a move that is either perplexing or not at all surprising—depending on your perspective—political pressure from providers and hospitals is mounting against programs with proven success in cracking down on waste, fraud, abuse, and improper payments, all while Medicare limps through its yearly checkups.
Plagued by Problems, Medicare Limps On
Waste, fraud, abuse, and improper payments in the Medicare system have been challenges since the program’s inception, but the problem has grown exponentially in recent years due to longer life expectancy and the increasing complexity of the health care system.
A study by PricewaterhouseCoopers estimates the health care system loses $1.2 trillion each year to waste, fraud, and abuse.
In 2011, the Centers for Medicare & Medicaid Services reported a loss of more than $64.8 billion to improper payments alone. Hemorrhaging billions of dollars each year amid looming financial uncertainty is neither logical nor sustainable.
As the cost and sophistication of care increases, Medicare fraud is becoming more widespread. In July, the Department of Justice settled a multi-million dollar fraud case with 55 hospitals across 21 states. The providers agreed to pay $34 million in fines after it was discovered they performed costly inpatient spinal surgeries—instead of outpatient procedures—on patients with osteoporosis in order to pad Medicare reimbursements (17 HFRA 621, 7/10/13). This settlement followed a 2012 case, in which 14 hospitals agreed to pay more than $12 million after they also performed inpatient procedures in order to bilk Medicare (16 HFRA 143, 2/22/12).
Since 1991, health care fraud prosecutions have increased by a staggering 822 percent. To combat growing fraud concerns, the federal government has implemented a number of successful anti-fraud programs, including the Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, the CMS Fraud Prevention System (FPS), and the Recovery Audit Contractor (RAC) Program.
It is estimated that for every dollar spent on health care-related fraud and abuse investigations since 2010, the government has recovered $7.90. In the first half of 2013 alone, the HEAT Strike Force filed charges against 148 individuals or entities, logged 139 convictions and recovered $193.7 million in receivables.
