Fraud in Medicaid?…not so much where you think

Recently, I commented on the over attention to fraud and abuse as “the problem” with health care spending. So the big players in healthcare managed to sidestep closer scrutiny by diverting attention to “stopping abuse” as opposed to real reform. The politicians got to feel good(or maybe just got to think they look good) by doing “something”, while the regulars continued their daily exploitation of the system. The feds spend $102M to recoup $20M. Now it is good to rid the system of fraud and abuse, but the business types will recognize the terrible “return on investment”. The loss, of course, is only on the part of the feds. The auditors made out just fine.  [ http://www.washingtonpost.com/national/gao-report-feds-spent-102m-on-medicaid-fraud-contracts-but-only-identified-20m/2012/06/14/gJQACAzJdV_story.html ]
Did you know the Auditors are actually part of the establishment exploiting the system. This is just one more way to wring dollars from the feds. The expenditures will be chalked up to another cost of healthcare that people say can’t afford. More to the point is where the auditors find most of their “fraud”. I am involved in reimbursement issue reviews at the national level for emergency medicine. I can tell you the dollars being spent are not going to look for fraud in many places everyone knows it exists because the most successful scammers are much harder to find and prosecute. Rather, the time and money goes into a cat and mouse games with legitimate providers quibbling over whether billing follows published rules. The rules are vague. Some might cynically say they are vague to allow for just this type of payer abuse. I know of insurance companies filing large claims for fraud against Emergency groups for over billing visits. One challenge claimed the group never saw visits at the highest level, essentially NEVER saw really sick patients, (the average ER sees about 40% of its patients in this category). I was involved with a larger groups hit with such charges of abuse but appealed and prevailed in every one of hundreds of challenged bills. However, many smaller groups don’t have the resources to fight and just “settle” by paying something to get them off their backs under threat of further charges and extrapolation of audit findings to years of charges that could put them at risk of bankruptcy. The auditors see this extortion as easy money collection. I would have categorized the audits themselves as abuse.
Now at this point you might say “wait weren’t we discussing federal Medicare, not private insurance”. Well yes, but guess who the auditors are. They are offshoots of the same group. You see while government may be responsible of for the actual dollars for Medicare costs, they subcontract the administration of these claims to private insurers. Yes, Medicare will dish out some very lucrative contracts for administration of claims payment to the very same insurance companies who look for every possible way possible to get more of the $3 trillion in healthcare cost that the nation spends. Is this really what you want?
By the way if you think this is bad, consider while the rules for coding visits under Medicare are vague, private insurance companies are permitted to have their own rules, which they can change as they like, and never disclose their policies to the providers. They also are permitted (in most states) to decide what and how much to pay in almost any way they please. I once was brought to task by my hospital because they wanted me to me to sign contracts with Blue Cross and also US Healthcare. I refused because of abusive contract language and “black box” clauses that subjected us to changes without notice and coding criteria deemed propriety and therefore not open to disclosure. I refused. In the long run it did not help my standing with administration, on the other hand, they eventually adopted my position and also opted out of these contracts. (after I left).