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Stop the gaming of the system

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How best to curb fraud and abuse in the Medicaid and Medicare programs? It's a multibillion-dollar question. State and federal prosecutors say they are bracing to crack down on the problem, and stepping up enforcement means increased resources.

Every angle of the Medicaid and Medicare programs is ripe for fraud and abuse. Federal and state prosecutors already are targeting two hot spots — South Florida and California — where disabled patients, senior citizens and other special populations are pawns in scams that are gaming the system. Here's the general snapshot Health and Human Services Secretary Mike Leavitt recently presented to Congress: "The types of fraud committed by the [durable medical equipment, prosthetics, orthotics and supplies, or DMEPOS] in South Florida and the Los Angeles metro area included billing for services not rendered, billing excessively for services rendered, and billing for services not 'medically necessary.' CMS and its contractors identified thousands of Medicare beneficiaries living in both metropolitan areas who are receiving medical equipment — like power wheelchairs, orthotics and equipment for testing their blood sugar — they do not require, based on their medical history. Thousands upon thousands of these devices are being billed for — and paid — in connection with the names of Medicare beneficiaries, despite the fact that the patients never received the equipment, nor had their physicians ever ordered them. Other concerns involve the co-pays beneficiaries paid for equipment their doctors didn't order and was not delivered, generating incorrect records suggesting these beneficiaries have DMEPOS items in their possession should future legitimate needs occur. Numerous physicians in both locales said they never saw the patients for which given medical devices or equipment had been ordered; nor, correspondingly, had they ordered the suspect DMEPOS."

That's the national picture. Smack in front of federal lawmakers' faces in the nation's capital is yet another. As Jim McElhatton reported in Friday's editions of The Washington Times, D.C.'s Medicaid director has requested federal prosecutors "to investigate the findings of an internal health department review of two D.C. Medicaid health plans that found more than $15 million in excessive costs." In the case of one firm, auditors found $7.7 million in "potentially excessive or unsupported costs." In the other, auditors uncovered $8.1 million in "improperly" charged fees.

What's more is that the request from the city follows another audit, this one by the D.C. Office of the Inspector General, which found the city had overpaid three managed-care firms tens of millions of dollars over several years. Moreover, last month Mr. McElhatton reported that four of D.C. Medicaid's top 10 medical-equipment suppliers are under investigation, and the offices of yet another firm were raided by the FBI. The need for broader federal prosecution in the District is undeniable.

The fraud and abuse are, of course, cheating taxpayers across the country. What's worse is that the real losers are Medicare and Medicaid beneficiaries. Telling patients who don't have diabetes that they do is unconscionable, and then the providers bilk the system for unnecessary blood-sugar-testing equipment. Authorities are also prosecuting: doctors who are billing for unnecessary and never-performed procedures; clinics and transportation firms that actually never see patients (some of whom are actually deceased); medical suppliers, pharmacies and nursing homes that are actually using foster-care children, senior citizens and disabled patients as unwitting pawns. One of the most recent scams, unveiled just last week, has led to a 41-count indictment that charges four Houston women with billing more than $7 million worth of equipment and accepting nearly $3.5 million in payments. The indictments say the women conspired to obtain fraudulent paperwork from doctors who would then claim that wheelchairs and scooters were medically necessary for their patients. The indictments also say the women used bogus paperwork to bill Medicare and Medicaid for the high-dollar chairs, then pocketed the difference after delivering the cheaper models.

How much money is diverted from the actual delivery of health-care services to fraud and abuse? That definitive figure is immeasurable. The cost to Medicare alone is estimated at $13 billion. The Senate Committee on Homeland Security and Governmental Affairs estimates diverted Medicaid costs at $33 billion. Both Democrats and Republicans were anxious to pass the Medicare drug entitlement without first arresting the growing waste, fraud and abuse. The Bush administration is requesting an additional $183 million to curb fraud and abuse this fiscal year. The proposal is a solid start to combat what obviously is a nationwide problem. Congress should act approvingly.

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