The yearly amount of Medicare Fraud is massive. The Office of Management and Budget said recently that healthcare fraud in the United States in 2010 amounted to $47.9 billion. That’s right BILLION. Others in the industry think that number is low by a half. Interestingly, the major whistleblower cases involving major over billing of Medicare did not uncover a ring of lowlife crooks with a store front makeshift medical clinic. Some of the largest cases involved national healthcare companies who were purposel fudging on the services provided–rendering excessive healthcare services that had nothing to do with medical necessity or companies billing the government for tests not needed or provided at all. So how do they get away with this and WHY is it so prevelant.

Incredibly, the billing reimbursement system for Medicare is set up on the “honor system.” This means that if a healthcare provider submits a bill for services to an eligible Medicare patient and certifies that it is reasonable and for the medical needs of the patient, Medicare pays that bill. There is some after the fact auditing done but very little and the system was set up in 1966 to try to assure that doctors got paid quickly and efficiently. The problem is that this simply does not take into account the corporate drive for profits–in many cases to satisfy shareholders in publicly traded companies. So the corporations run the line and create their own protocols which skirt the issue of the needs of the patient–a specific requirement of The Social Security Act of 1965.

Hence the honor system just doesn’t work. The results are sometimes more sinister. A vast population of old, ill and dementia laden individuals are sucked into a system of healthcare for profits without recourse. Don’t believe me? Just take a look inside some nursing homes and skilled nursing facilities and see what I see. Residents are cycled in and out of treatment regardless of need. Some, who don’t have a terminal diagnosis are put into hospice care even though they are not eligible.Œ

Medically unecessary medical tests are run; stays are extended far beyond a reasonable time and Medicare foots the bill. The Department of Justice is ramping up on these frauds and new whistleblower laws allow for individuals who report this to share in the recoevery. But the fact is that the system of reimbursement places reliance on the honesty of the human soul.

It ignores the solelessness of the corporation. To quote Gorden Gekko “Greed for lack of a better word, is good.” for the stockholders but not the taxpayers. Jeffrey Newman Esq. represents whistleblowers who report Medicare Fraud.