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How record Medicare fraud bust could give a boost to Obamacare (+video)

More than 240 people have been arrested in a nationwide sweep for allegedly submitting $712 million in false billings. HHS is investing in new tools to stop fraud before it happens, including a capacity to screen out questionable providers.

Federal authorities announced on Thursday the largest takedown of Medicare fraud in US history. The operation by the Medicare Fraud Strike Force resulted in the arrest of 243 people for allegedly submitting $712 million in false billings.

"The defendants charged include doctors, patient recruiters, home health-care providers, pharmacy owners, and others," Attorney General Loretta Lynch said at a press conference. “They billed for equipment that wasn't provided, for care that wasn't needed, and for services that weren't rendered.”

Some examples from Justice Department documents:

  • In Los Angeles, a doctor is accused of fraudulent billing and referrals amounting to almost $23 million. Items included more than 1,000 power wheelchairs.
  • In Dallas, six owners of a physician house-call company face charges for allegedly submitting nearly $43 million in billings under the name of a single doctor, often billing 90 minutes or more for an appointment that lasted less than 20 minutes.
  • In Detroit, 16 people allegedly submitted some $122 million in false claims, including physician visits that never occurred and pills that were billed but never dispensed.

The investigation spanned 17 districts in eight states. It's the most recent effort by the Obama administration to crack down on the fraud that is driving up Medicare costs and threatening the long-term viability of health-care reform.

Cleaning up the billions in Medicare fraud is key to paying for Obamacare, The Associated Press reported.

A Department of Health and Human Services (HHS) report listed fighting fraud in Medicaid and Medicare among its top management and performance challenges, underscoring the importance of those efforts to health-care reform.

While there is no exact number for the amount that the federal government loses to Medicare fraud, estimates hover around $60 billion annually.

The Justice Department’s Medicare Fraud Strike Force has now charged more than 2,300 people with falsely billing more than $7 billion to Medicare since 2007, according to Reuters.

A provision of the Affordable Care Act is to provide an additional $340 million in anti-fraud funding over 10 years, according to NPR. Health officials view the extra money as an investment in health-care reform. 

The departments of HHS and Justice reported last year that from 2011 to 2013, every dollar spent on health-care-related fraud and abuse investigations reaped $8.10 in recoveries – the highest three-year return in their history.

With increased resources from the Affordable Care Act, HHS is investing in new tools to stop fraud before it happens, including a capacity to screen out questionable providers or suppliers.

Lou Saccoccio, head of the National Health Care Anti-Fraud Association, said that the new methods, as well as more-advanced computer systems, allow authorities to shift away from the "pay and chase" mentality, where the government pays out the money and then has to go catch and prosecute the individual.

Compiling all the Medicare claim data from various sources and using the new technology to analyze it identifies potential fraud and can "stop that money before it goes out the door," Mr. Saccoccio told the Kaiser Health Network.

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