We knew there was Medicaid fraud. But THIS much fraud?
Like, a hundred billion dollars worth?
A year.
At least, that’s RFK Jr.’s estimate. And that’s just Medicaid.
For example, from Kennedy:
“We found a hotel room with 29 hospices in it. I mean a hotel, every room was a hospice, and none of them had any patients. They were just addresses.”
“The guys who own them, they were Estonians and Armenians and people from Eastern Europe who were getting the patient numbers. They were stealing them from doctors’ offices.”
“They were also going into poor neighborhoods in Los Angeles and they’d say to the people, ‘We’ll give you this $375 flat-screen TV. You give us your patient number and we’re going to enroll you in this hospice. You don’t ever have to go. We’re just going to enroll you,’ and then we’ll charge Medicaid $6,000 a month forever. And the guy never dies, of course, because he was never sick.”
“We didn’t get a single call from a congressman or from a business owner saying, ‘Oh, you shut down my hospice and all these patients are on the street.’ None of them, because they were all crooked and they knew they were crooked.”
John Hinderaker, who wrote the post, adds that in Minnesota (his home state), it is estimated that “at least one-half of the total spending on 14 Medicaid programs went to fraud.”
I always knew there was some fraud, and that it wasn’t a small amount. But no, I didn’t think it was as large as that. Even worse, I think I had assumed that the fraud was at least somewhat difficult to detect. But that turns out to be wrong, too. It was ridiculously easy to detect, particularly in the computer age which we’ve been in for decades.
So why was it not detected? Is it a case of astoundingly colossal incompetence? Possibly, but I don’t think so. It’s more likely to be a case of winking at it in order to gain the support of those who participate in it – who are not limited to members of immigrant communities, but those communities seem to be over-represented in the fraudster population.
[ADDENDUM:
I was looking up earlier posts of mine on heath care fraud, and much to my surprise I found one from 2017 that contained that same $100 billion a year figure. I certainly hadn’t remembered that. Please take a look.]
The “Powerline” blog of John Hinderaker has been talking about the fraud for years.
Ray:
Yes, I’ve followed the fraud and written it before, too. I think my first post on it was back in 2017 (see this).
And I see there – much to my surprise – that that 100 billion dollar estimate was already known. That was nearly ten years ago. I hadn’t remembered that figure from the earlier post. I’m going to add an addendum to this post.
That would pay for two Carrier Battle Groups, and fix all our roads, I would think.
The size of Federal programs is so large, almost $1 trillion in Medicaid alone, that $100 billion in Medicaid “fraud” is not all that surprising. (2/3 of Medicaid is picked up by the Federal government.)
“Fraud” there is not sneer quotes. I’m trying to capture that people are using a word very loosely. FWA (fraud, waste, abuse) is the term used within healthcare and health insurance. None of the three should happen, but they are not all “fraud”, for what it’s worth. Some kinds of it are easy to detect, but most kinds of it are hard to detect, and the vast majority of it is done by a very small percentage of providers. A typical year much less than 1% of Medicaid payments are identified as FWA and something put in motion to recover them.
You can’t find what you don’t look very hard for, of course. Primary responsibility for Medicaid program integrity is at the state level, and some states care more than others. Most Medicaid spending is in the form of managed care, where the state pays United or whoever to handle it for them, and that’s another layer of opacity. All the managed care organizations of course do a great deal of work looking for and recovering what they ought not to pay, because for the most part they get to keep what they don’t spend, at least in the short term. But it’s just that much harder to figure out what’s going on in the totality.
I didn’t invent the aphorism, of course, but somebody or other once said “it’s not what’s illegal that’s scandalous, so much as what is legal.” For Medicare and Medicaid this is especially so, but many of the issues that come up here are also accurately described by it.
A lot of perfectly legal things have happened that have pumped Medicaid and Medicare dollars into pockets that have nothing to do with providing health care. Some it is stuff you read about in the news, and some of it is stuff that never gets in the news. Quite aside whether there’s been $100 billion in fraud this year, I’m quite confident that I-can’t-believe-that’s-legal is at least that much.
The rules for collecting Medicaid and other similar welfare benefits are so vague, the programs so huge and multifarious and enforcement of standards so lax that it is inevitable that money will leak out of the treasury like air through a screen door. Politicians (mostly democrats but also republicans who go along so as not to be called nasty names like “grandma killer”) set these giveaway programs up, then fund them generously so they can go back to their constituents and tell them how much they care for them while seeking their votes. The gibsmedats aren’t sutpid; they know they aren’t putting any money into the system, so why not take out as much as possible since nobody is really looking too closely at what goes on? That’s why people are literally getting paid for caring for one or more relatives who they claimed to be “disabled” (which could be something as ubiquitous as obesity) or elderly or “autistic.” (And who in this day and age can’t qualify as “autistic”?) Meanwhile, the financial can is continually kicked down the road by means of deficit spending. This is one of the big reasons why the federal budget and debt have balooned over the past decade or so. It is nauseating.
Not really fraud, but as you know I’ve been deep inside the medical system the past 2 years. I have UHC Medicare Advantage. Every month I get a statement of what I’m costing. My gross cost is close to $1mil. Net payment to providers is around $750k. There’s some sort of payment schedule where the provider bills a huge amount and the insurance pays a much lesser amount, and everyone is ok. Seems like buying used cars to me.
The worst part about the fraud is that it’s a well-known fact to our political class, and yet with few notable exceptions, few are stepping up to correct course in Congress. And there are even some that are facilitating the crisis even further, knowing full well what it means.
If the fraud is on this scale, the only solution from the perspective of the public trust, is to implement a strategy of placing every medicaid subsidy lasting more than a few months, on probation, and then requiring proof to continue for real, valid disabilities.
But the counter-argument would always be a plaintive, ‘think of the children’ heartstrings argument.
So many of our societal problems are based on the quietly insidious abuse of the public trust as the most effective way to exploit its vulnerabilities.
“Think of the undocumented (and imaginary) children.” Then you get infinite empathy points.
Fixed it for you.
Since the Doge days, I’ve seen people speculating that most/all of the federal deficit is fraud, that if they got rid of the fraud, the budget would be balanced. I initially thought that was a joke, exaggerating to get attention. Now I think there’s a solid chance that could be true.
I strikes me that nobody knows any real numbers about the amount of Medicaid fraud. If we had real numbers, they would vary greatly over time. Not the same $100B number year after year over a decade or more. The fact that they haven’t changed strongly suggests that we don’t have anything real. Just made-up drivel for the masses.
@physicsguy:Net payment to providers is around $750k. There’s some sort of payment schedule where the provider bills a huge amount and the insurance pays a much lesser amount, and everyone is ok.
Billed charges vs allowed charges vs what is actually paid, which may be a different number yet.
Billed charges is the number they write down for everyone who comes in, that’s the $30 band-aids. Allowed charges are what they have negotiated with the insurance carrier. In aggregate what a hospital bills averages only 30-40% of what they are ever paid (and what the hospital actually spends reflects what it’s paid, not what they bill). It’s just how everybody has always done it.
The ratio of a hospital’s costs to its charges (RCC) is public information. Usually a hospitals financial statements are also public information. Take a look sometime, it’s eye-opening. Working people with insurance through their employer typically pay 2-3 times what Medicare people pay, and Medicare in turn is 30%-ish above what Medicaid pays.
How much of the federal deficit is fraud?
@Mary Catelli:How much of the federal deficit is fraud?
Unfortunately not the whole $2 trillion. But the fraud is not a layer of fat, it’s marbling, and the “can’t-believe-this-is-legal” is another kind of marbling.
You can’t trim marbled fat, you just have to put the animal on a diet…
An ‘nconceivable amount.
neo pointedly asks; “Like, a hundred billion dollars worth?
A year.”
One trillion is 1000 billion, which is 100 billion times 10. So 100 billion is 10% of one trillion…
Now 10% lost to waste & fraud is IMO unacceptable but I’d bet that as long as the monies coming in… its simply excused as ‘charging what the ‘market’ (public) will bear’.
Most people stealing from the public trough don’t think of it as ‘stealing’ because its ‘nothing personal, just business’.
It’s the 100 Billion every year that’s a killer. At that rate, 10 years racks up a TRILLION DOLLARS… which btw increases the interest payments on the federal debt.
Of course, our fiat money system enables the ‘powers that be’ to kick the can of global bankruptcy down the road. Of course, a large minority of fiscally irresponsible citizens adds their weight onto the fiscal scale.
Far too many foolishly refuse to acknowledge that fiscal realities ignored and subverted through subterfuge will eventually exact a terrible price and, upon many of them.
Corruption is a slow poison that eats away at a society’s underbelly.
In aggregate what a hospital bills averages only 30-40% of what they are ever paid
Ugh, this is the opposite of what I meant. “In aggregate what a hospital is ever paid averages only 30-40% of what they bill” is what I should have written.
Interest on the national debt is $1 trillion per year at this point. It won’t stay there long… fraud is only one of the fiscal problems this country has, though it is the least defensible one. Cleaning it up might buy us some time.
Soylent Green is canadian health care.
neo: I always knew there was some fraud, and that it wasn’t a small amount. But no, I didn’t think it was as large as that.
Likewise.
Kinda makes you wonder how many elections Democrats actually won.
om:
And here I thought Soylent Green was people.
huxley:
It does.
neo:
Good point. Does Ottawa consider canadians to be people or burdens?
In the Democrat/DSA world thinking is dangerous.