Auditors Flag Billions In Medicare Fraud

I’ve got some good news and some bad news.

The good news is: auditors from a special program designed to target waste, fraud and abuse identified over $2.5 billion in wrongful Medicare payments to hospitals, helping the government – and taxpayers – recoup the funds.

The bad news is, the auditors used to find $4 billion in fraud every year until special interests and their lobbyists got their grimy hands in the mix.

Such is the tale of the Medicare Recovery Audit Contractors (RACs) program, a small oasis of common sense amid a desert of exasperating government waste.

The auditors are private citizens who work on commission, receiving, a portion of the funds they help the taxpayers recoup. Of course, the payments they flag are reviewed, and the most recent report from the Centers for Medicare and Medicaid showed they had a 96 percent accuracy rate.

In total, the auditors identified more than 1.1 million claims for improper payments in 2014, the report showed.

Which, if you’re alarmed at entitlement spending sending our country towards bankruptcy, is great news. The problem is the program is only scratching the surface of rampant fraud and abuse.

The government estimates that it pays around $50 billion annually in fraudulent Medicare payments, or roughly twice the entire annual budget of the Department of Justice, for example.

At $50 billion, the fraud isn’t just maddening, it’s a significant line-item in the gargantuan federal budget. But year-after-year passes by without too much attention on it.

Across the entire government, there’s nearly twice that amount in fraud. The Government Accountability Office recently estimated that improper payments constituted $124 billion in 2014.

Just to put that in perspective, that would pay for the “sequester” cuts that Democrats, and even many Republicans, are always complaining about being so draconian.

One of the reasons why is that the beneficiaries of those improper payments, largely hospitals that exploit loose billing standards to rake in millions of dollars in illegitimate profits, have a small army of lobbyists who fight tooth and nail to stop any program that cuts in to the payments.

Leslie Paige, a vice president at Citizens Against Government Waste (CAGW), explains that the lobbyists have practically tied auditors’ hands behind their backs.

“Unfortunately for taxpayers, instead of using every possible tool to cut the amount of Medicare improper payments, CMS officials and members of Congress continue to actively undermine the RAC program,” Paige said.

A recent example is CMS extending an enforcement “moratorium” on a rule designed to take away a key billing loophole that hospitals had exploited for billions of dollars in ill-gotten gains. The loophole was actually initially discovered via the RAC program, leading to efforts to stop the illegal practices. Except now the government refuses to enforce the rule as a sop to special interests.

The scary part is under Obamacare, health care spending is on track to increase sharply, meaning that we may only be seeing the tip of the iceberg when it comes to fraud, waste and cronyism.

CAGW ought to be commended for leading this fight, but other conservatives need to pick up the mantle as well. Private auditors could form a very effective model for combatting waste in other parts of the government as well.

The lobbyists that fight this program can only succeed in the dark. It’s time to shine a light into their cozy setup and yank those illegal, fraudulent payments right out of their hands.


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