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Not Just Medicare: Fraud Is A Systemwide Problem

The Politico Pulse reported this morning that Sens. Tom Carper (D-DE), Tom Coburn (R-OK), Michael Bennet (D-CO), Mike Enzi (R-WY), Bob Corker (R-TN), Scott Brown (R-MA), and Amy Klobuchar (D-MN) all “plan to introduce a bill today that they say would enact stronger penalties for Medicare fraud, curb improper payments and establish stronger fraud and waste prevention strategies, curb the theft of physician identities, identify more Medicaid overpayments and improve fraud data sharing.” The measure would “improve security of the database of Medicare providers to ensure “dead” doctors can’t place Medicare orders.”

All this is well and good — anti fraud legislation can save a significant amount of money and usually attract bipartisan support. But these measures can also provide cover for politicians to argue that Medicare (aka “government health care”) is full of the kind of waste and fraud that is absent in market-driven private health insurance.

The National Health Care Anti-Fraud Association (NHCAA) estimates that 3 percent of all health care spending — or $68 billion — is lost to health care fraud, but notes that fraud is a “systemic problem affecting public and private insurers alike, in the individual market, the employer-sponsored group market, and public programs.” Medicare patients may be particularly susceptible to fraud given their age and vulnerability. As a recent report from George Washington University concluded, “Medicare and Medicaid fraud may reflect the vulnerable nature of the populations that depend on the program rather than any failing on the part of either program. As a result, simply moving away from Medicare and Medicaid coverage and toward a system of private health insurance subsidies would in and of itself do nothing to curb fraud; it simply would privatize the victimizing of the poor and vulnerable.”

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