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Provider fraud needs wider exposure in health-care debates

A few weeks ago I was telling a friend that during my mother-in-law’s final stages of renal failure she had been billed for a four-day stay by a hospital where she hadn’t been a patient. If not for the scrupulous oversight of my father-in-law, whose health coverage for his wife and himself included caps for catastrophic illnesses, his insurance company simply would have paid the hospital. When he notified that hospital, pointing out its erroneous charge, there was no apology for the “mistake.” Instead he was told to prove his wife had not been at their facility.

“Oh, that’s nothing,” said my friend, who related that her family had recently received a bill for a tracheotomy performed three months earlier on her father. Problem was her father had been deceased for more than a year. Her brother called the hospital and asked why it was necessary to exhume a body for the operation. The hospital’s CFO wasn’t amused; he insisted on seeing a death certificate before the charges could be dismissed. He too, did not apologize.

I suspect neither of these cases involved simple oversights or mistakes; I think they were concerted efforts by the offending hospitals to see if they could slip a fraudulent bill through and get payments they didn’t deserve for treatments not performed.

After all, few patients or family members would expend the effort to read through inch-thick, single-spaced entries on hospital or clinic invoices. Some medical providers believe these deceptions are worth pursuing. According to the Health Care Financing Administration, which oversees Medicare, the government loses 30 cents on every dollar from fraudulent practices within the medical community. This fraud often involves repeat billings, charging for a hospitalization beyond the days of a patient’s residency, or for services not provided, among many others.

$60 billion to $70 billion per year
Lewis Saccoccio, executive director of the National Health Care Anti Fraud Association, told National Public Radio last August that such fraud totals $60 billion to $70 billion dollars per year. Other sources claim his estimate is low.

Patients who require long-term expensive procedures like kidney dialysis, for example, may run up medical charges in excess of a million dollars over their protracted treatment, resulting in lengthy, difficult to understand invoices. Some patients never audit their statements and many who do often can’t comprehend them..

My father-in-law was one of the few who thoroughly examined each billing, uncovering several other questionable claims during and following his wife’s terminal illness. He was able to successfully challenge these charges, but many people aren’t up to this task. They are already stressed by the serious ailment of a loved one.
In August, 2008, three surgery centers in Southern California were indicted after paying recruiters to find indigents on skid row, give them false diagnoses and send them to hospitals, which then billed Medicare of Medi-Cal (California’s version of Medicaid) for treatment of patients’ nonexistent conditions. During the three years before being caught the fraudsters were paid $300 million.

And last June eight people in Miami were indicted for billing Medicare and Medicaid $100 million for services that were never rendered.

While these egregious transgressions have been uncovered, thousands of others remain unsolved

A worthwhile investment
Proposals in the House health care overhaul bill include $100 million to help the government eliminate medical fraud, though critics charge this amount is excessive. But if the allocation aids in substantially reducing the annual $70 billion paid for fraudulent claims, the investment will reap dividends.

Fraudulent billing has been a back-burner issue during the current discussion of health care reform, drowned out by screeds denouncing socialized medicine that leftist politicians want to impose against citizens’ will.

Should the ranters and shouters prevail, there likely will be few disincentives for medical service providers to cease profiting from fraud.

Michael Fedo is the author of “The Lynchings in Duluth,” “The Man From Lake Wobegon” and other books.

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Comments (2)

  1. Submitted by John Olson on 10/12/2009 - 07:57 am.

    There is another flavor of this that you have overlooked in the article: double-billing.

    Many years ago (in another state), our son spent the first two weeks of his life in a neonatal intensive care unit. Two insurance companies were involved. Several weeks after, the bill arrived to the tune of several thousand dollars.

    In the end, I found that many procedures and supplies were billed to both companies….and paid by both. Other charges were not paid by either company. Some were paid by one, but not the other.

    I tallied the amount that was not paid by either insurer and had a cashier’s check drawn up for that amount. After reviewing my analysis, they took the check.

    Ask for a detailed listing of everything billed to your insurer. If there is a second insurer involved, be sure to get a detailed listing of charges submitted to that insurer too.

  2. Submitted by Michael Friedman on 10/13/2009 - 03:06 pm.

    I once had an experience like the author’s in which I detected a hospital’s duplicate billing for an MRI — and then called my rather uninterested insurance company. Despite all the presumption of rigid insurance scrutiny, I am left to conclude that insurers are incapable of fraud monitoring and cannot justify their middleman expense on this basis. Single Payer solutions such as the Minnesota Health Plan not only provide Medicare-like coverage to all, but remove the billing problems associated with Medicare by negotiating global budgets with providers — thus eliminating per procedure billing fraud (or sloppiness), or the private (or public) costs of monitoring.

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