More comments on Healthcare Fraud

According to a paper published last year by the National Health Care Anti-Fraud Association, there was nearly $2.3 trillion spent on health care in 2007, with somewhere between 3% and 10% ($70 – $230 billion) of that lost to fraud. The federal government estimates annual losses to public insurance plans (Medicare/Medicaid/VA, and the various Federal Employees Insurance Plans) to be somewhere north of $60 billion. Doing the math it appears conceivable that as much or more fraud exists with private insurers as with our current public options.

NHCAA estimates that every $2 million invested in fighting health-care fraud returns $17.3 million in recoveries, court-ordered judgments, denial of bogus claims, and related anti-fraud savings. The average private health insurance company Special Investigative Unit (SIU) has an annual budget between $1.9 and $2 million, employs a fulltime staff of 19, maintains 363 open cases, and worked 791 cases in 2007 (last year for which data was available). About 75% of these SIU’s employ forensic data fraud-detection software.

A George Washington University Medical Center paper, released in June, produced figures similar to the NHCAA’s, and detailed fraud schemes used by the offenders. Miscoding or up-coding, double billing, kickbacks, unbundling of procedure charges, forum shopping, ghost patients, unnecessary procedures, and billing for procedures that were never performed the most prevalent.

The paper’s authors called the issue "a systemic problem affecting public and private insurers alike, in the individual market, the employer-sponsored group market and public programs."

Private medical insurance providers are targets for those who would commit fraud. Some fraud is simply opportunistic, and healthcare providers commit a fair share, but the same organized criminals targeting the public payers perpetrate the lion’s share.

Although private insurance fraud probably equals or surpasses the public options, large Medicare and Medicaid fraud convictions get more press. There are several reasons for the publicity disparity. The federal government is required to report fraud in the government programs, and does so in semi-annual reports issued by the U.S. Health and Human Services – Office of the Inspector General (HHS-OIG). The trials of those violating the Federal False Claims Act are held in federal courts, prosecuted by ambitious Assistant U.S. Attorneys eager to see their name in print. Private insurance frauds are generally prosecuted on the state level where the publicity isn’t so splashy.

The private insurers themselves account for at least a portion of fraudulent activities reported. Earlier this year two South Carolina Blue Cross/Blue Shield employees received short prison sentences for falsely submitting phony medical reimbursement claims and reaping a portion of the rewards.

The Government Accounting Office (GAO) issued a report in 1999 titled “Improprieties by Contractors Compromised Medicare Program Integrity.” Culpable Medicare contractors were identified and their fraudulent actions detailed. The report authors found, since 1993, that criminal or civil actions have been taken against at least six contractors resulting from fraudulent actions while under contract with Medicare. BCBS was the largest offender, with subsidiaries in Alabama, California, Florida, Illinois, Massachusetts, Michigan, and Pennsylvania among those listed as having fleeced the system out of millions of dollars by falsifying or altering documentation. Many of the prosecutions were the result of whistleblowers within the BCBS organizations.

Certainly all of this shows that the problem of healthcare fraud is pervasive, widespread and probably under reported; that incompetence is endemic within the claims systems, both public and private, but more than anything it indicates that monitoring should be improved and enforcement enhanced. Assigning the fox to guard the henhouse is proving to be a dangerous option.

It leaves me wondering how anything that will safeguard taxpayer money will be accomplished with the practices of proprietary private industry and the multitude of carriers, both small and large. The fragmentation and lack of a central database is a glaring loophole in the enforcement system, allowing offenders to game the system. Perhaps, for this reason alone, it points to the validity of a government run (or managed) central health insurance claims center… or even a (Gasp!) single-payer option.

[Thanks to BadTux for the muse]

Blog Roll Update

Announcing blog roll updates is not something I've done often, but because this one ought to interest a broad cross section of readers I figured I should give it a mention. The title tells the tale...

THE BACON SHOW - One bacon recipe a day, everyday, forever...

With recipes running the gamut from banal creations like the Bacon Lover's Mashed Potatoes, to more arcane inventions such as Eel, Bacon and Prune Stew; or English Pea Soup with Minted Crème Fraiche, Peekytoe Crab and Julienned Bacon, I have no doubt I'll be expediting the demise of many a poor hog, thanks to THE BACON SHOW.

The author is approaching 1,700 recipes, easily searchable by ingredient via the links in the right sidebar.

Besides astounding me with the wealth of bacon recipes, the author also introduced me to a new cookbook. How I have survived all these years without Jill Conner Browne's Sweet Potato Queens' Big-Ass Cookbook and Financial Planner on my shelf, I don't know.

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Unconstitutional

Rep. John Boehner (R-Ohio) calls the recently passed healthcare reform bill “the most unconstitutional thing I have ever seen.”

Really? The most unconstitutional you have ever seen? Either you have a short memory or you are fond of rose colored shades, Mr. Boehner.

Congress has done far worse. For reference I would point to HR 3172, enacted by the 107th Congress on September 19, 2001, signed into law by President George W. Bush on October 26, 2001. The Patriot Act was a true bipartisan effort, with the House voting 357-66 in favor of the measure, and 98-1 in the Senate.

The USA Patriot Act of 2001, a contrived acronym for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorists,” is the most blatantly unconstitutional legislation to stumble through Congress since the Alien and Sedition acts of 1789. Before recent revisions, the Patriot Act violated Article I, Section 9 of the Constitution by suspending the Habeas Corpus and Bill of Attainder provisions, and it all but vacated the protections of the First, Fourth, Fifth, Sixth, Seventh and Eighth, Thirteenth and Fourteenth amendments.

Eight years have passed since Patriot became law. Stories of abuse still surface in tales of government lies and extravagances, with U.S. citizens delivered into a byzantine morass of legal entanglement on flimsy, sometimes contrived evidence. Reading the stories and listening to the court cases makes one think of the old Soviet Union.

As an example, take the sad case of Brandon Mayfield, an attorney and citizen of the U.S.A. Mayfield was jailed and held in federal lockup for 19 days… as a material witness against himself. His house was searched and bugged, computer files (even those pertaining to clients, which violated attorney client privilege) were downloaded and seized, and the children’s homework copied. It was Mayfield’s daughter’s Spanish homework, combined with a misidentified fingerprint, which convinced the FBI that Mayfield was involved in the March 2004 Madrid train bombings.

When the FBI’s “evidence” was finally presented to a judge, the case was tossed on its ear. The FBI had utilized the now infamous Section 215 to make unlawful entry into the Mayfield home, plant listening devices, download computer files, and seize evidence to support what turned out to be a bogus charge that even the Spanish authorities scoffed at.

Section 215 grants the FBI the power to seize a vast array of sensitive personal information and belongings, including medical, library and business records, using a secret intelligence court that does not require any suspicion of individual criminal activity. Although a court order is required to obtain these records, judges are compelled to issue them, making judicial review in this process nothing more than a rubber stamp.

Patriot amended 15 different federal laws, including the Foreign Intelligence Surveillance Act (FISA) of 1978, the Electronic Communication Privacy Act (ECPA)of 1986, the Computer Fraud and Abuse Act and the Family Education Rights and Privacy Act. The act authorized roving wiretaps and the so-called “sneak and peek” warrants, obliterated the wall between foreign and domestic intelligence, and amended the definition of domestic terrorism.

Robert Levy, senior fellow in constitutional studies at the Cato Institute, has written that the Patriot Act represents "the looming sacrifice of civil liberties at the altar of national security." The Mayfield family learned the truth of this all too well, and their case is but one of hundreds.

You want unconstitutional? Look no further than the truly bipartisan Patriot Act. The healthcare boondoggle doesn’t hold a candle to that. Mr. Boehner’s pomposity is nothing more than clownish, but standard right wing fare. The Democrats have behaved similarly in the past, so I don’t pretend to give them a pass, but this crop of Republicans is definitely pushing the limits of the legitimate.

Supreme Court Justice Louis Brandeis, writing in his dissent in Olmstead v. United States (1928), said it best. “Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.”

I’m old enough to remember a time when all of the Congress didn’t suck all of the time, and there were at least a few rational members on both sides of the aisle. Those days, it seems, are long gone.

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For further reading, try Section 505 and the National Security Letter and the related cases, Doe v. Ashcroft (2004) and Doe v. Gonzales (2005). Other Patriot related cases include Muslim Community Association of Ann Arbor v. Ashcroft (2006), Humanitarian Law Project v. Ashcroft and the associated Humanitarian Law Project v. Reno, which was an earlier challenge to Bill Clinton’s Antiterrorism and Effective Death Penalty (AEDPA) Act.
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Medicare and Medicaid fraud

This is the story I found in my Fort Worth Star Telegram this morning.

Texas a hotbed as authorities crack down on Medicare, Medicaid fraud

It could easily be subtitled "Why Government Run Healthcare Will Never Work".

Due to budget constraints and resistance to needed regulation, congress will never allocate sufficient resources to monitor any of the "free money" plans under their purview. As a result, some of the less scrupulous elements of our society have come to view the federal government as a slot machine.

The power scooter case referenced in the article only mentioned one offender, albeit a large one, while law enforcement acknowledges that there are hundreds, perhaps thousands of similar offenders stealing billions of dollars from the Medicare system, and more schemes are hatched every day.

Notice that the article speaks of millions of dollars in the few cases mentioned, yet the total annual loss to fraud is estimated at $60 billion. Notice also the length of time between the "Easy Rider" ambulance effort (December 2006) and when the three offenders will actually face a judge (December 2009).

It takes time for law enforcement and the prosecutors to build a good case and prepare for trial, but the bad guys have no such constraints and they never stop working.

For every criminal taken down, dozens are skulking in the shadows ready to take their place, and dozens more are filing new license applications. They have found the odds of getting caught to be in their favor, and have learned clever ways to mitigate even those odds. Many of these criminals are immigrants (one of the men mentioned in the article is of Nigerian origin) who can easily flee to their home country if they are unfortunate enough to attract unwanted attention.

The Star-Telegram story describes only the tip of an iceberg. The bad guys were getting away with this for a long time before law enforcement finally took notice, and by the time enforcement efforts got rolling there were far more criminals than there were cops. Only the worst offenders have ever garnered any attention, leaving the little fish free to continue their criminal enterprise.

With the insufficient resources available, all efforts aimed at getting this under control have proved futile. Investigators and prosecutors are hamstrung by policies intended to protect legitimate small business, and what regulation we have is full of loopholes.

Then we have the showboat aspect of criminal investigation and prosecution. To justify their efforts, government agents want the big splash. One case with big dollar signs is easier to prosecute than several cases of lesser magnitude, and a big case looks good on the résumé.

The smarter criminals know they become targets if their billing goes over a certain amount, so they keep it low enough to stay below the radar. After a year or two of fraudulent billing, they change the names of their companies (along with their Medicare billing account number) and keep doing the same thing. Many do nothing more than repaint the ambulance and buy new uniform shirts, then keep on committing the same fraud with the same patient base.

The result is a story like this one; the feds bragging about the big rat they caught while the little rats scurry around doing business as usual. Prosecutors earn stripes for jailing an offender on a $2 million crime, but nothing is said about the remaining $59,998,000,000.

The only way to enforce the law is to have sufficient resources and plenty of boots on the ground. We need more cops, prosecutors and courts. We can spend the money on regulation, enforcement and prosecution… or we can give it to the crooks.

An old saw comes to mind: Watch your pennies, nickels and dimes. The dollars will take care of themselves.

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Ray Comfort smackdown

In celebration of the 150th anniversary of Charles Darwin's ‘On the Origin of Species’, an evangelical xtian ministry has published a butchered version of the book, inserting a marvelously ridiculous introduction using worn out and debunked creationist garbage, all in an almost laughable attempt to rebut Darwin's theory and make the case for ‘intelligent design’.

Creationist and certifiable lunatic Ray Comfort and his Living Waters ministry plan to distribute tens of thousands of free copies on the nation’s college campuses next month.

Eugenie C. Scott, executive director of the National Center for Science Education, received an evaluation copy in advance of its release, and does a fine job critiquing the vandalized tome. The NCSE is the leading group promoting and defending the teaching of evolution in public schools. Her remarks are published today in U.S. News & World Report’s online edition. Dr. Scott appears not too worried about the effects, closing her review with these words:

“I have faith that college students are sharp enough to realize that Comfort's take on Darwin and evolution is simply bananas.”

Let us hope Dr. Scott is correct in her praise of the average college student. Please find her full article HERE.

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Unfortunate?

NC insurer says timing of mailings unfortunate

Wednesday, October 28, 2009

The News&Observer of Raleigh, N.C. —

Even Blue Cross and Blue Shield of North Carolina acknowledges that its timing on two recent mailings was unfortunate.

Customers first learned their rates will rise by an average of 11 percent next year. Then they got a flier urging them to send an enclosed preprinted, postage-paid note to Sen. Kay Hagan denouncing what the company says is unfair competition that would be imposed by a government-backed insurance plan. Congress is likely to consider that public option as it debates the health care overhaul.

"No matter what you call it, if the federal government intervenes in the private health insurance market, it's a slippery slope to a single-payer system," the BCBS flier read. "Who wants that?"

Indignant Blue Cross customers, complaining that their premium dollars are funding the campaign, have called Hagan's office to voice support for a public option. They've marked through the Blue Cross message on their postcards and changed it to show they support the public option, then mailed the cards.

"I hope it backfires," said Mark Barroso, a documentary film maker in Chatham County who is a Blue Cross customer and recipient of the mailings. "I'm doing everything I can to make sure it does."

Beth Silberman of Durham said she "went sort of bonkers" about the mailing. "You're hostage to them, and then they pull this," she said. "My new premiums are funding lobbying against competition. It's pretty disgusting."

A sample of the postcards being sent to Senator Hagan's compliments of BCBS paid postage

A spokesman in Hagan's office, David Hoffman, said the postcards have not yet begun arriving in the senator's office because of the mail screening process, but he said lots of people have called, angry about the insurer's tactics.

Blue Cross spokesman Lew Borman said the mailing relied on voter registration records, not a customer list. Since the company controls more than half of the state's health insurance market, the names on the lists overlapped. He declined to reveal how much money the insurer paid for the mailing. He acknowledged the timing was unfortunate but said it was coincidental since one mailing was tied to current events in Washington and the other to when the insurer typically sends its annual notices about rate increases.

"We said from the beginning we were going to be involved and would tell North Carolinians what kind of impact the health care proposals would have, and that's what we've been doing," Borman said.

Yep, and you're doing such a wonderful job of it too...

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