The fraud you paid for, America
Something historic happened in the second week of February.
Washington’s Department of Health and Human Services (HHS) published Medicaid data on a public platform. Medicaid is a taxpayer-funded, joint federal-state program meant to meet the medical expenses of vulnerable Americans.
Glaring “red flags” popped up pointing to staggering fraud, possibly on the order of $100 billion annually, more than eleven percent of what taxpayers spend each year on Medicaid.
That’s a lot of dough — Medicaid is 9.1% of all federal spending.
The states spend 15.1 percent of their budgets on top of what the federal government sends their way.
The problem of fraud should make not only taxpayers deeply unhappy, but also the recipients of Medicaid. After all, money siphoned by fraud from the system eventually translates into even greater struggles than patients now have to find physicians who will participate in the Medicaid program.
Why?
Medicaid pays physicians so little for services to patients — in Georgia, for example, about a third of what commercial insurers will pay — that physicians decline or limit Medicaid patients as a matter of professional survival.
Continuing to flush money down the fraud toilet will eventually mean the weakening and elimination of taxpayer-funded programs of support for those who really need them.
Medicare (a federal program for assisting seniors) and Medicaid were instituted in 1965.
But it wasn’t until 49 years later, in 2014, that data on Medicare payments to physicians became publicly available.
It took pressure from the Wall Street Journal to induce the feds to shine light on what was really going on. Lo and behold, $60 billion in fraudulent payments turned up! That was how little care in just one year the federal government had shown for dollars ponied up by taxpayers.
As a result of these findings, physicians who had gamed the system went to jail. The federal government clawed back at least some of the stolen public money.
With Medicaid data from 2018 to 2024 now signaling probable massive fraud against a program that must be kept solvent for the needy, we must see similar consequences imposed again.
Every state must dig into this disclosed data and spot the “red flags.” The problem goes beyond the six states — Texas, California, New York, New Jersey, Florida, and Minnesota — that have already raised the greatest levels of suspicion because of industrial-strength shenanigans.
The digging is now much easier than merely relying on citizens to notice aberrations, as happened in Minnesota, where the fraud could total $9 billion. Minnesota’s difficulties raise the issue of how some states even investigate these “red flags” — the state hired Optum, an arm of United Healthcare to do the audit. Headquartered in Minnesota, United Healthcare offers Medicaid managed care to Minnesotans.
We could also question how the federal government has been attempting to thwart fraud. United is currently under investigation by the federal government for potential fraud in the Medicare Advantage space. Curiously, United’s Optum arm has partnered with federal health customers for 20 years to “mitigate fraud, waste, and abuse.”
It’s imperative that potential conflicts of interest be kept out of the investigatory process.
Time is of the essence: In Minnesota, Florida, Maine, and California, it is possible that money is funneled offshore, further complicating the pursuit of justice and the recovery of fraudulently obtained public money.
Below are just three “red flags” found in the newly published data. They cry out for vigorous investigation.
1. Money spent on home care and community services more than doubled during the Covid emergency, from $9.7 billion to $23.5 billion. One percent of all agencies that submitted bills to Medicaid for care provided in a patient’s home during this period accounted for 42.5% of all the money spent through Medicaid for this purpose. Nine of these agencies submitted claims totaling more than $1 billion. Seven are in Brooklyn, New York.
Wow! And you thought “one-percenters” referred to another group of people.
Measures adopted during the Covid emergency — such as waiving criminal background checks, allowing non-physicians to order services, providing telehealth allowances, and suspending audits — remain in place in several states. It is conceivable that fraudsters continue to exploit these relaxed standards, providing no care while gobbling up money that should be saved for those in need of home care and community services.
2. One person operating out of a van in rural New Mexico billed Medicaid for $76 million from 2018 to 2024.
3. Half a billion dollars of Medicaid money was paid to 1,175 providers who had been previously forbidden from federal health care programs due to criminal activity or misconduct.
These discoveries represent a multi-alarm fire in the mismanagement of the money collected from taxpayers. When we ponder the level of fraud that is probably out there, we run out of language to describe not only the thievery but the indifference to it on the part of government — both state and federal.
The people we elect need to get off their collective duff and start digging into the reality of fraud.
Now!
By law, every state has a Medicaid Fraud Control Unit.
These units should be assisted by the HHS Office of Inspector General (OIG), the U.S. Department of Justice (DOJ), and the Government Accountability Office (GAO).
They may be busy, but they cannot be too busy to uncover waste in a program that accounts for 10 percent of a bloated federal budget.
In Pennsylvania, the Medicaid Fraud Unit has claimed to be the busiest in the nation.
Up until now, like most such anti-fraud units, they have relied on tips from whistleblowers.
The information released to the public earlier this month on Medicaid spending is as loud a whistle as can be blown. It’s a tip provided to every Medicaid Fraud Control Unit in the country.
How did we get here, America?
How could this have happened?
Our lawmakers authorize the collection of taxes.
We then let them “do their thing” with the money that’s been collected.
We assume that they care very deeply about managing that money properly.
But why should they?
It’s not their money.
Some recipients of the money have no obvious interest in restraining the flow.
Why should they?
It’s not their money.
Those who make a lot of money through fraud against the taxpayer-funded Medicaid program will continue to do so until the consequences become intolerable.
It’s as though everyone we pay to be awake at the gates to the public treasury has been slumbering.
C’mon people.
There’s “woke” and then there’s really waking up.
Let’s demand that our legislators and regulators investigate and see the job through.
Claw back the money paid to fraudsters. Put them behind bars where they belong.
Marion Mass, M.D., is a practicing pediatrician in Bucks County, a leading member of the Free2Care movement and a member of The Independence’s advisory board.
