Democrat Leaders Agree: Medicaid is Fraught with Waste, Fraud and Abuse

Tackling Corruption Is a First Step for Preserving Medicaid for Those Most in Need

Democrat leaders from President Obama on down agree that waste, fraud and abuse are plaguing Medicaid and that something must be done about it in order to protect Medicaid for those most in need:

PRESIDENT OBAMA: “President Obama will announce support later today for efforts to crack down on fraud in Medicare and Medicaid, among other government programs, one of the few areas of bipartisan consensus during last month’s health care reform summit.” (Jake Tapper, “President Obama Will Try to Build Support for Health Care Reform through New Effort to Combat Medicare/Medicaid Fraud,” ABC News, 3/10/2010)

MORE OBAMA: “Every good idea that we’ve heard about reducing fraud and abuse in the Medicare and Medicaid system, we’ve adopted in our legislation.”(“Healthcare Summit”, CNN, 2/25/2010)

SEN. CHUCK SCHUMER (D-NY): “Because, frankly, the Republican Party has always stood for getting rid of the waste, fraud and abuse in the system. In ’97, it was the centerpiece of your program. And all of a sudden this year we’re hearing, don’t — don’t do any of that. That’s something that I think we can come together on. I thank you.” (“Healthcare Summit”, CNN, 2/25/2010)

MINORITY LEADER NANCY PELOSI (D-CA): “We simply must make the cuts in waste, fraud, and abuse in Medicare so that the benefits and the premiums are untouched.” (Nancy Pelosi, “Remarks by the President, Senator Alexander, Speaker Pelosi, and Senator Reid in Opening Statements at Bipartisan meeting on Health Care Reform,” The White House, 2/25/2010)

REP. STENY HOYER (D-MD): “And, in addition, you speak eloquently and correctly about wringing fraud, waste and abuse out of this system. I know you’re happy to have seen in our bill — in the House bill — and in the Senate bill, very substantial investment in doing just what you suggest.

“We want to go after fraud, waste and abuse. I reiterate that.” (“Healthcare Summit”, CNN, 2/25/2010)

SEN. PATRICK LEAHY (D-VT): “The scale of health care fraud in America today is staggering,” Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.) said at a hearing. “Now, as health care reform moves through the Senate, I want to make sure we do all we can to tackle the fraud that could undermine efforts to reduce the skyrocketing cost of health care.” (Jane Zhang, “Lawmakers Target Medicare and Medicaid Fraud,” The Wall Street Journal, 10/28/2009)

Medicaid and Medicare fraud in FY ’10 alone was estimated at $70 billion:

CENTER FOR MEDICARE & MEDICAID SERVICES FY ’10 FRAUD AND ABUSE ESTIMATE: $70 BILLION. “In fiscal year 2010, the Centers for Medicare & Medicaid Services (CMS)–the agency that administers Medicare and Medicaid–estimated that these programs made a total of over $70 billion in improper payments.” (“Medicare and Medicaid Fraud, Waste, and Abuse: Effective Implementation of Recent Laws and Agency Actions Could Help Reduce Improper Payments,” U.S. Government Accountability Office, 3/9/2011)

GOVERNMENT ACCOUNTABILITY OFFICE: MEDICAID IS “PARTICULARLY VULNERABLE TO FRAUD, WASTE, ABUSE”: “GAO has designated Medicare and Medicaid as high-risk programs because they are particularly vulnerable to fraud, waste, abuse, and improper payments (payments that should not have been made or were made in an incorrect amount). Medicare is considered high-risk in part because of its complexity and susceptibility to improper payments, and Medicaid because of concerns about the adequacy of its fiscal oversight to prevent inappropriate spending.” (“Medicare and Medicaid Fraud, Waste, and Abuse: Effective Implementation of Recent Laws and Agency Actions Could Help Reduce Improper Payments,” U.S. Government Accountability Office, 3/9/2011)

To that end, a number of news reports have extensively documented the lack of oversight of state Medicaid programs and the egregious instances of fraud and abuse that have materialized as a result. Will Democrats follow through on their rhetoric and work to protect Medicaid?:

THE NEW YORK TIMES, 2005: “[Medicaid] has drawn dentists like Dr. Dolly Rosen, who within 12 months somehow built the state’s biggest Medicaid dental practice out of a Brooklyn storefront, where she claimed to have performed as many as 991 procedures a day in 2003. After The New York Times discovered her extraordinary billings through a computer analysis and questioned the state about them, Dr. Rosen and two associates were indicted on charges of stealing more than $1 million from the program.

“It has drawn van services, intended as medical transportation for patients who cannot walk unaided, that regularly picked up scores of people who walked quite easily when a reporter was watching nearby. In cooperation with medical offices that order these services, the ambulettes typically cost the taxpayers more than $50 a round trip, adding up to $200 million a year. In some cases, the rides that the state paid for may never have taken place.

“School officials around the state have enrolled tens of thousands of low-income students in speech therapy without the required evaluation, garnering more than $1 billion in questionable Medicaid payments for their districts. OneBuffalo school official sent 4,434 students into speech therapy in a single day without talking to them or reviewing their records, according to federal investigators.

“Medicaid has even drawn several criminal rings that duped the program into paying for an expensive muscle-building drug intended for AIDS patients that was then diverted to bodybuilders, at a cost of tens of millions. A single doctor in Brooklyn prescribed $11.5 million worth of the drug, the vast majority of it after the state said it had tightened rules for covering the drug.” (Clifford Levy and Michael Luo, “New York Medicaid Fraud May Reach Into Billions,” The New York Times, 7/18/2005)

GAO: 65,000 ILLEGAL PRESCRIPTIONS, INCLUDING FOR DECEASED PATIENTS. “[A]  report out Wednesday finds that state and federal officials failed to detect millions of dollars in Medicaid prescription drug abuse.

“An audit of the government program in five large states found about 65,000 instances of beneficiaries improperly obtaining potentially addictive drugs at a cost of about $65 million during 2006 and 2007 — including thousands of prescriptions written for dead patients or by people posing as doctors.” (Kathy Kiely, “GAO Report: Millions in Fraud, Drug Abuse Clogs Medicaid,” USA TODAY, 9/29/2009)
FLORIDA MEDICAID FRAUD: “Florida and federal agencies are cracking down on corruption in the state’s Medicaid program after revealing $124 million in improper payments and more than $56 million in fraud and abuse last fiscal year.

“The Center for Medicare & Medicaid Services last week said it had revokedthe billing privileges of more than 1,100 medical equipment suppliers in South Florida and Southern California and suspended payments to home health agencies in Miami-Dade County. It also said it would require certain suppliers of medical equipment, prosthetics, orthotics and supplies to post a $50,000 surety bond this year.” (Kimberly Morrison, “Florida’s Medicaid Reports $56M in Fraud,” Jacksonville Business Journal, 1/16/2009)