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Health Care Fraud – The Perfect Storm

by Mary Sewell

Today, healthcare fraud is all over the news. There undoubtedly is Fraud in health care. There is no question that healthcare providers who abuse their position and our trust to steal are a problem. So are those from other professions who do the same. The same is true for every business or endeavor touched by human hands, e.g., banking, credit, insurance, politics, etc. Why does healthcare fraud appear to get the ‘lion’s share of attention?

Could it be that it is the perfect vehicle to drive agendas for divergent groups where taxpayers, healthcare consumers, and healthcare providers are dupes in a healthcare fraud shell game operated with ‘sleight-of-hand’ precision? Take a closer look, and one finds this is no game of chance. Taxpayers, consumers, and providers always lose because the problem with healthcare fraud is not just Fraud. Still, it is that our government and insurers use the fraud problem to further agendas while at the same time failing to be accountable and take responsibility for a fraud problem they facilitate and allow to flourish.

Astronomical Cost Estimates

What better way to report Fraud than to tout fraud cost estimates, e.g.

– “Fraud perpetrated against public and private health plans costs between $72 and $220 billion annually, increasing the cost of medical care and health insurance and undermining public trust in our health care system… It is no longer a secret that Fraud represents one of the fastest-growing and most costly forms of crime in America today… We pay these costs as taxpayers and through higher health insurance premiums… We must be proactive in combating healthcare fraud and abuse… We must also ensure that law enforcement has the tools to deter, detect, and punish health care fraud.” [Senator Ted Kaufman (D-DE), 10/28/09 press release]

– The General Accounting Office (GAO) estimates that Fraud in healthcare ranges from $60 billion to $600 billion per year – or anywhere between 3% and 10% of the $2 trillion healthcare budget. [Health Care Finance News reports, 10/2/09] The GAO is the investigative arm of Congress.

– The National Health Care Anti-Fraud Association (NHCAA) reports that over $54 billion is stolen yearly in scams designed to stick our insurance companies and us with fraudulent and illegal medical charges. [NHCAA, web-site] NHCAA was created and is funded by health insurance companies. Unfortunately, the reliability of the purported estimates is dubious at best. Insurers, state, and federal agencies, and others may gather fraud data related to their missions, where the kind, quality, and volume of data compiled varies widely. David Hyman, professor of Law

The University of Maryland tells us that the widely-disseminated estimates of the incidence of healthcare fraud and abuse (assumed to be 10% of total spending) lack any empirical foundation at all; the little we do know about healthcare fraud and abuse is dwarfed by what we don’t know and what we know that is not so. [The Cato Journal, 3/22/02]

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