Private Eyes Slow at Detecting Medicare Fraud

In 2007, private eyes identified $835 million in fraudulent Medicare payments, but recovered only $55 million.  Private detectives retained by Medicare required an average of six months to refer fraud cases to law enforcement officials, according to congressional investigators. The average lag time was 178 days – and by then, many cases are so cold that catching the perpetrators is virtually impossible, as is recovering taxpayer dollars. Recently, an inspector general report had questions about the contractors who play a leading role in Medicare’s efforts to rein in fraud.  In 2007, private contractors identified $835 million in problematic Medicare payments.  The government was able to recover only about $55 million or seven percent of the total, according to the report.

Medicare overpayments – which typically range from a billing error to a brazen swindle – totaled more than $36 billion in 2009, according to the Obama administration.  That’s why President Obama has placed a high priority on fighting fraud and waste in the hope that the savings will help fund the new healthcare law.  The opposition – in the form of Senator Charles Grassley (R-IA) – questions whether taxpayers are getting a good deal from Medicare’s private eyes.  His office is reviewing Medicare data from the last four years to determine why it took so long to refer fraud cases to law enforcement officials.  According to Grassley, “Medicare is already a pay-and-chase system when it comes to fraud, waste and abuse.  Providers are paid first; then questioned if there’s a problem.  Add to that mix contractors who sit on cases of ongoing fraud when they should be referring them to law enforcement, and you have a recipe for disaster.”

Medicare retains seven private companies – collectively known as “Program Safeguard Contractors” – at work to find fraud, a program that was started in the late 1990s.  These contractors, who oversee specific areas, investigate accusations of misconduct and work with the government’s criminal investigators.

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