To dig up more Medicare fraud …

By Marshall Allen (contact)

Wednesday, April 15, 2009 | 2 a.m.

The numbers don’t lie: The federal government does not put its money where its mouth is in terms of fighting Medicare fraud.

Everyone talks about the importance of policing Medicare fraud, but consider the following annual figures:

• Medicare billing totals more than $400 billion, and that’s mostly taxpayer money.

• Kim Brandt, who leads Medicare’s anti-fraud efforts, said some estimate the agency loses up to $80 billion to fraud, though she thinks that number sounds too high. (The truth is, no one is sure. All they know is that the more they look the more they find, Brandt said.)

• In 2008 Medicare recovered about $20.4 billion related to fraud.

• Medicare spends only about $120 million on fraud investigation.

If the problem is so large, and if every dollar spent on enforcement is multiplied exponentially in the form of recovered taxpayer money, why doesn’t Medicare spend more money to ferret out fraud?

“That would be a call for the administration and Congress to make,” Brandt said. “From our perspective we always try and do the best we can. There’s always going to be more fraud than the resources we have to meet it.”

Medicare spends most of its fraud-fighting budget on contractors who comb through billing data, searching for aberrations. They search to see whether providers or geographic areas show an unusually high number of claims for electronic wheelchairs or diabetic shoe inserts, for instance. They check to see whether physicians’ claims for patient visits are dramatically more than the average.

Medicare flags unusual activity but the question of whether the billings are fraudulent is left for other agencies to determine, Brandt said.

Medicare also spends $2 million annually to maintain offices in Los Angeles, Miami and New York, which are considered the hotbeds of Medicare fraud. But the locations are staffed by only about 20 investigators combined. A few other investigators work in Chicago and Dallas.

The dearth of Medicare ground troops is one of the biggest critiques of Medicare made by Pat Burns, spokesman for the advocacy group Taxpayers Against Fraud.

“If you go through paperwork you won’t find fraud,” Burns said. “The paperwork is there to support the fraud, not illuminate it. You find fraud by ground-truthing — go to places and find out what’s going on.”

Burns said the best way to root out fraud is to recruit whistleblowers and observe what’s happening in the community.

The Sun recently reported that two Las Vegas infectious disease specialists are being accused of billing Medicare for examinations they did not provide. Burns said documenting such allegations is easy: Follow the doctor for 25 minutes. Any fraud “would be evident very quickly. Or talk to the nurses.”

A Medicare audit revealed that one of the specialists, Dr. Dhiresh Joshi, billed for more than 80 Medicare patients in one day, when a typical specialist can see about 30. Medicare made Joshi repay the money for that day, but took no additional action.

Burns compared the audit’s discovery to finding a rat — if one is in sight, hundreds more are in hiding. Auditors should have pulled Joshi’s bills over a period of time to see whether there’s a pattern of wrongful billing, he said. But there’s little incentive for them to be that aggressive, he said.

Medicare’s fraud enforcement efforts could be far-reaching, because the people cheating the government could be ripping off private insurance companies, too. Private insurers estimate they lose $68 billion to $226 billion to bogus claims — and that’s money passed on to consumers in the form of higher premiums and health care costs.