Time to get serious about health care fraud

Government could raise billions by stepping up investigations

I often wonder why the mainstream media takes so little interest in the fraudulent activities of unscrupulous health care operators. Case in point: Yesterday, the Department of Justice announced one of its largest ever health care fraud indictments. It involved a Florida-based telehealth operator, who allegedly tried to steal $784 million from Medicare in a physician payment kickback scheme, of which $247 million was eventually paid. Other than a brief mention on the Modern Healthcare website, no media organization covered the story.

Call me old school, but I remember a time when someone trying to steal three-quarters of a billion dollars from a government program was enough to shock even the most jaded reporter or editor. Perhaps no one covers the Justice Department anymore (unless, of course, it involves ongoing investigations into the depredations of Donald Trump).

Here’s why paying more attention to health care fraud is timely: It’s a potential source of revenue to help pay for the $3.5 trillion reconciliation package Democrats hope to push through Congress over the next few months. According to the DOJ’s Health Care Fraud Strike Force, every dollar spent investigating fraud in Medicare and Medicaid returns $4.30 in revenue to the government.

This scheme was particularly brazen. The fraudsters solicited illegal kickbacks from durable medical equipment suppliers, who in turn deposited the money in off-shore shell companies. Creaghan Harry, 53, then transferred some of the money to a telemedicine company to pay physicians to write unnecessary orders for their patients. He used most of the money to finance what the DOJ press release called a lavish lifestyle.

Two of Harry’s business partners have already pleaded guilty in what looks like a classic case of getting underlings to rat out the ringleader. Harry has also been charged with four counts of income tax evasion.

How big is the overall problem? The Payment Integrity Information Act of 2019 requires the Centers for Medicare and Medicaid Services to estimate how much of its spending might be “improper.” Its most recent report estimated the agency shelled out $25.7 billion in improper payments in its fee-for-service program and $16.3 billion in improper payments to Medicare Advantage insurers. Improper payments in Medicaid could be twice as high, the report said.

The latest annual report from the inspector general at the Health and Human Services Department, released last month, shows CMS recovered just $1.8 billion from fraud investigations last year. Given the scale of the problem, quadrupling the task force’s budget could easily raise about $10 billion a year (or $100 billion over ten years) to fund additional Medicare benefits, early childhood education and other priorities outlined in the Democrats’ $3.5 trillion spending plan.