Refuting government happy talk on Medicare fraud

Here's a radical idea.  When government departments and agencies issue press releases crowing about something they've done, put the accomplishment in context with the size of the problem.

This came to mind as I was reading the October 3, 2016 Department of Justice press release on a $513-million health care fraud settlement with Tenet Healthcare Corp, an investor-owned hospital company.

"This settlement reflects the department's lack of tolerance for these types of abusive arrangements."  "This settlement illustrates the government's emphasis on combatting health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Team (HEAT)."  "This [is an] outstanding result on behalf of American taxpayers" (DOJ, 10/3/16).

What the DOJ officials quoted above did not say is that this was the 14th settlement with the same hospital company over the last 22 years.  They had been operating this most recent fraudulent kickback scheme – bamboozling poor pregnant Hispanic women to come exclusively to their hospitals so they could then bill Medicaid and Medicare – since 2000.

In 2006, the Department of Justice announced another global settlement with the same company, this time a $920-million health care fraud case.

"The Department of Justice will not tolerate fraudulent efforts by hospitals or other health programs," announced the Justice Department in its press release (DOJ, 6/29/06).

"Not tolerate" is a flexible term.  The government had estimated that just one of the many schemes in  a long list of allegations cost Medicare more than $1.6 billion.  The amount paid by the company in the settlement was $680 million less.  Why?  "The settlement amount was based on the company's ability to pay," the Justice Department explained.

A Justice Department official involved in that case received the U.S. attorney general's Award for Fraud Prevention.  Of all the many schemes in this settlement, the company had been running the costliest one for eight years.

In 1994, the same company, operating under a different name, pleaded guilty to seven felonies and paid a $379-million fine.  The allegations this time related to patient abuse and widespread Medicare billing fraud.

"Let the message be very clear. We have made health care a law enforcement priority," said the attorney general at the time, Janet Reno.

The Justice Department also declared this settlement "a landmark in the government's health care fraud enforcement effort, not only for its size and scope, but for a ground breaking corporate compliance agreement that is now seen as a model in the health care industry."

From 2002 to 2012, there were ten other government settlements with the same company on cases involving performing unnecessary but profitable heart operations and patient deaths, Medicare overcharges, kickbacks, and fraudulent claims.

Knowing all that, the government's claim of not tolerating health care fraud, of making it a priority and of success in fighting it and preventing it, is deceptive and undermines the public anger needed to stop it.

A February 2016 Department of Justice press release explained how the government "protects consumers and taxpayers by combating health care fraud"; how the government is "committed to reducing fraud, waste, and abuse"; and how since 1997, the government's Health Care Fraud and Abuse Control Program has returned more than $29.4 billion to Medicare Trust Funds.

There are no hard numbers on Medicare fraud.  Several years ago, the FBI published an estimate that 3% to 10% of health care expenditures is lost to fraud.  Using that range, the total of Medicare's fraud losses over the same period may have been somewhere between $225 billion and $745 billion.

Suddenly, $29.4 billion in recoveries does not sound like a number worthy of cheers.  It may amount to as little as 3.9% of the total fraud out there over this period.

A few years ago, Rep. Peter Roskam (R-Ill.) was sitting in a congressional committee hearing on Medicare fraud.  He was listening to Dr. Shantanu Agrawal, the government official in charge of program integrity at the Centers for Medicare and Medicaid Services (CMS).  Dr. Agrawal was saying things like "enhancing program integrity is the top priority for the administration" and "we have made important strides in reducing fraud," and the government "is committed to  protecting taxpayer dollars by preventing or recovering payments for wasteful, abusive, or fraudulent services."

Finally, Rep. Roskam had enough.  He said:

CMS's own number in 2010 in terms of fraud, and abuse, and waste, and so forth, was $48 billion. A year later it jumped up, according to GAO, to $64 billion. The last assessment from the FBI is $75 billion plus and climbing. So, Doctor, with due respect, in my view you don't get to use words like "top priority," "robust," and "strongly positive." They should be out of your lexicon. This is a scandal. This is an embarrassment.

If the public is ever going to support what needs to be done to stop the loss of hundreds of billions of health care dollars to fraud, the government should drop the soothing words.  "Freak out" is the appropriate response.

Here's a radical idea.  When government departments and agencies issue press releases crowing about something they've done, put the accomplishment in context with the size of the problem.

This came to mind as I was reading the October 3, 2016 Department of Justice press release on a $513-million health care fraud settlement with Tenet Healthcare Corp, an investor-owned hospital company.

"This settlement reflects the department's lack of tolerance for these types of abusive arrangements."  "This settlement illustrates the government's emphasis on combatting health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Team (HEAT)."  "This [is an] outstanding result on behalf of American taxpayers" (DOJ, 10/3/16).

What the DOJ officials quoted above did not say is that this was the 14th settlement with the same hospital company over the last 22 years.  They had been operating this most recent fraudulent kickback scheme – bamboozling poor pregnant Hispanic women to come exclusively to their hospitals so they could then bill Medicaid and Medicare – since 2000.

In 2006, the Department of Justice announced another global settlement with the same company, this time a $920-million health care fraud case.

"The Department of Justice will not tolerate fraudulent efforts by hospitals or other health programs," announced the Justice Department in its press release (DOJ, 6/29/06).

"Not tolerate" is a flexible term.  The government had estimated that just one of the many schemes in  a long list of allegations cost Medicare more than $1.6 billion.  The amount paid by the company in the settlement was $680 million less.  Why?  "The settlement amount was based on the company's ability to pay," the Justice Department explained.

A Justice Department official involved in that case received the U.S. attorney general's Award for Fraud Prevention.  Of all the many schemes in this settlement, the company had been running the costliest one for eight years.

In 1994, the same company, operating under a different name, pleaded guilty to seven felonies and paid a $379-million fine.  The allegations this time related to patient abuse and widespread Medicare billing fraud.

"Let the message be very clear. We have made health care a law enforcement priority," said the attorney general at the time, Janet Reno.

The Justice Department also declared this settlement "a landmark in the government's health care fraud enforcement effort, not only for its size and scope, but for a ground breaking corporate compliance agreement that is now seen as a model in the health care industry."

From 2002 to 2012, there were ten other government settlements with the same company on cases involving performing unnecessary but profitable heart operations and patient deaths, Medicare overcharges, kickbacks, and fraudulent claims.

Knowing all that, the government's claim of not tolerating health care fraud, of making it a priority and of success in fighting it and preventing it, is deceptive and undermines the public anger needed to stop it.

A February 2016 Department of Justice press release explained how the government "protects consumers and taxpayers by combating health care fraud"; how the government is "committed to reducing fraud, waste, and abuse"; and how since 1997, the government's Health Care Fraud and Abuse Control Program has returned more than $29.4 billion to Medicare Trust Funds.

There are no hard numbers on Medicare fraud.  Several years ago, the FBI published an estimate that 3% to 10% of health care expenditures is lost to fraud.  Using that range, the total of Medicare's fraud losses over the same period may have been somewhere between $225 billion and $745 billion.

Suddenly, $29.4 billion in recoveries does not sound like a number worthy of cheers.  It may amount to as little as 3.9% of the total fraud out there over this period.

A few years ago, Rep. Peter Roskam (R-Ill.) was sitting in a congressional committee hearing on Medicare fraud.  He was listening to Dr. Shantanu Agrawal, the government official in charge of program integrity at the Centers for Medicare and Medicaid Services (CMS).  Dr. Agrawal was saying things like "enhancing program integrity is the top priority for the administration" and "we have made important strides in reducing fraud," and the government "is committed to  protecting taxpayer dollars by preventing or recovering payments for wasteful, abusive, or fraudulent services."

Finally, Rep. Roskam had enough.  He said:

CMS's own number in 2010 in terms of fraud, and abuse, and waste, and so forth, was $48 billion. A year later it jumped up, according to GAO, to $64 billion. The last assessment from the FBI is $75 billion plus and climbing. So, Doctor, with due respect, in my view you don't get to use words like "top priority," "robust," and "strongly positive." They should be out of your lexicon. This is a scandal. This is an embarrassment.

If the public is ever going to support what needs to be done to stop the loss of hundreds of billions of health care dollars to fraud, the government should drop the soothing words.  "Freak out" is the appropriate response.