• A Philadelphia couple recently billed Medicare more than $1.2 million for power wheelchairs and other medical equipment that patients did not need. A U.S. Attorney said the case “involves breaches of trust at every level—from the medical office employees who sold patients’ identity information to the people charged . . . who used the Medicare Trust as their personal ATMs.”14 Separately, a Michigan businessman fraudulently billed Medicare for $18.4 million by submitting claims for non-existent therapy services. He also paid kickbacks to people for use of their Medicare numbers, another all-too-common fraudulent practice.15
• Owners of an ambulance service in Tennessee billed both Medicare and Medicaid for unnecessary and non-compliant ambulance rides for patients, using the proceeds to buy a Corvette and a Harley Davidson. Examples of their “service” include a patient riding in an ambulance jumping out to get take-out at a restaurant, and ambulances being loaded with a patient in both the front and back—“in effect acting as a taxi, charging the government in excess of $300 per round trip.”16
• The Senate Permanent Subcommittee on Investigations identified $60-92 million in Medicare payments for services ordered by more than 16,500 deceased doctors in 2000-2007. Some doctors had been dead for more than ten years.17
• Facilities in southern California allegedly churned thousands of indigents through their sites and billed Medicare and Medi-Cal for costly and unjustified medical procedures. These facilities ran street-level operations, where runners collected indigents for unnecessary hospital services, dropping them back off on skid row by ambulance.18
• In 2005, the New York Times estimated New York state Medicaid fraud reached into the tens of billions.19 That much abuse in a single state implies a mind-blowing amount of Medicaid fraud is occurring across the country. Some cases just in New York:
• A Brooklyn dentist billed as many as 991 procedures supposedly performed in a single day.
• School officials enrolled tens of thousands of low-income students in speech therapy without the required evaluation, garnering more than $1 billion in questionable Medicaid payments. One school official sent 4,434 students into speech therapy in a single day.
• Several criminal rings duped Medicaid into paying for an expensive, AIDS-related muscle-building drug that was diverted to bodybuilders at the cost of tens of millions.
• James Mehmet, former chief state investigator for Medicaid fraud, reported that “40 percent of all claims are questionable.”
The staggering amount of fraud in healthcare simply does not exist in any other industry. That’s because the American healthcare system is mostly third party payer—the entity paying the bill for healthcare services is not the patient or doctor. That arrangement necessarily makes the patient and the doctor less concerned with using dollars efficiently for legitimate treatments and less interested in stopping fraud and abuse that may even be occurring in their name.
Another major reason for the abundant fraud is that the healthcare system is paper based. The bureaucrat is relying on out of date paper while the crook is using his Blackberry and iPhone.
HOW NOT TO PAY CROOKS
We at the Center for Health Transformation published a book in 2009 titled Stop Paying the Crooks featuring proposed solutions from a diverse group of experts to stop healthcare fraud, waste, and abuse. Here are some of their solutions:
1. Patients and taxpayers have the right to know the cost and quality produced by every facility that receives taxpayer money and how and where scarce taxpayer dollars are spent. Thus, all Medicare and Medicaid claims and patient encounter data should be made public on a depersonalized basis. That data is the mother lode of everything you would ever want to know about both programs. We would be able track all the dollars as well as the health outcomes produced by every provider in the country that accepts Medicare and Medicaid—which is nearly all of them.
Selected academics have access to Medicare data and have produced excellent reports such as the Dartmouth Health Atlas. Among their many key findings is that per capita Medicare spending by locality is inversely correlated with the likelihood of receiving recommended care.20
As good as the Dartmouth team is, it is not as comprehensive as the collective wisdom of the general public looking at the data and developing new studies, patterns, and solutions.
This data should only be released, however, after being vigorously patient de-identified, as is done in the academic world. Patient privacy must remain paramount.
2. The federally administered Medicare program and the mostly state-administered Medicaid program must improve their sharing of patient data. Their failure to do so results in significant lost opportunities to coordinate care and catch fraud. A 2009 report by the Kaiser Commission found insufficient controls and duplicate claims processing agents that invite fraud and abuse.
More than 8.8 million of Medicaid’s 58 million beneficiaries are low-income senior citizens who are eligible for both Medicaid and Medicare.21 That is close to 15 percent of Medicaid enrollment, but 40 percent of outlays. They comprise 18 percent of Medicare’s enrollment, but Medicare spent even more on their care than Medicaid did. These so-called “dual eligibles” account for roughly $300 billion in annual spending, yet the care they receive is often haphazard, uncoordinated, and reactive because Medicare and Medicaid don’t communicate with each other. The result is sub-optimization of patient health outcomes to accompany the waste and fraud.22
3. Outsource the authentication of new Medicare and Medicaid suppliers to Visa, Mastercard, or American Express. After forty years of failure, it is clear the status quo in Washington, D.C., is incapable of managing these programs, so let’s turn to experts with a track record of success.
The American credit card industry processes over $2 trillion in transactions every year, and there are 800 million credit cards accepted by millions of vendors to buy countless products. Yet fraud constitutes just one-tenth of one percent of the credit card industry. Conservatively speaking, fraud in Medicare and Medicaid is 10 percent, making it 100 times worse.
4. The CMS-855S form that prospective durable medical equipment providers must fill out lacks even a simple, “under penalty of perjury” line by the signature. That little tweak alone would help prosecutors and perhaps even have some deterrent effect. Likewise, we should make the submission of bogus claims a reason for immediately revoking a supplier’s billing number.
5. Allow seniors on Medicare the option of traveling to another city to receive major non-emergency surgeries. If a particular set of procedures costs thousands of dollars less in the next state over and the quality outcomes are as good or better, we should allow people the choice of facilities, especially if the individual receiving care can split the savings with taxpayers.
The commercial insurer Wellpoint launched a demonstration project that allows customers to travel to India for non-emergency elective procedures like plastic surgery. Surely it’s not too radical to take advantage of arbitrage opportunities here in America within the Medicare system.
6. Enhance discovery of third party liability in Medicaid. Simply maximizing self-reported third party coverage by patients could save state Medicaid programs 1-2 percent per year. That is $4-7 billion a year the insurers would legitimately be paying that the taxpayers currently cover due to bureaucratic incompetence. A GAO report shows up to 13 percent of people on Medicaid with other coverage.23
7. Medicare and Medicaid should use private-sector standards for establishing the number of suppliers for a product or service in a defined area. California’s Medicaid program has been doing this for nearly a decade in durable medical equipment. While there was some pushback from frustrated potential providers, there were no reports of access to care issues from beneficiaries.
In a related experiment last year, the South Carolina Medicaid program told its forty-eight Medicaid beneficiaries with the most number of prescriptions they could thenceforth only get prescriptions from one pharmacy, which they could
choose themselves. After eight months those individuals had 40 percent fewer prescriptions, saving Medicaid $320,000.
8. Reduce the administrative red tape and lengthy appeals that cancelled suppliers often exploit. Currently, suppliers can drag out the process for months and usually get reinstated. In 2007 and 2008 the OIG conducted 1,581 unannounced site visits to durable medical equipment providers in South Florida and found 491 either didn’t have an actual facility or were not properly staffed. All 491 billing privileges were revoked, 243 of those appealed, and 222 (91 percent) were reinstated. Of the 222 reinstated, 111 later had their billing privileges revoked again.24
The Florida Medicaid program requires suppliers to sign contracts agreeing the state has the right to terminate them at any time “without cause.” This has been effective without harming access to care. Any public or private buyer of a service should retain the right to stop buying that service whenever she sees fit.
9. Move to a system of 100 percent electronic remittances. Paper bills and the postage required to mail them cost billions unnecessarily. Furthermore, paper records guarantee the bureaucrats are always many steps and many months behind the crooks. We currently have paper clerks chasing crooks who use iPhones and Blackberries. It is a hopeless mismatch of technologies favoring the crooks over the cops.
10. Use unique ID numbers for Medicare beneficiaries instead of their social security numbers. A stolen Social Security number leaves a person much more vulnerable to theft and fraud.
11. Require more timely updates from states on Medicaid enrollment data. Even senior congressmen, as of April 2010, can only get state-by-state Medicaid enrollment data up to 2007. The latest data available for Maine is 2004.25 Compare that to FedEx and UPS, which track 23 million packages a day in real time, or to McDonald’s, which collects data or sales from 37,000 stores worldwide every night. As shown above, the existing data collection system urgently needs to be fixed.
12. Experiment with moving to biometric ID for Medicare and Medicaid beneficiaries. Cards are easily lost, stolen, copied, and forged, which contributes to uncoordinated care and fraud.
13. Recognize the shortcomings of isolated fee-for-service arrangements and follow two of MedPAC’s key recommendations: expand the use of risk-adjusted plans in Medicare, and expand the medical home model particularly for people with one or more chronic conditions. Enhanced use of medical homes would be particularly helpful in a Medicare system where specialists are overpaid relative to primary care. The standard fee-for-service model rewards volume first and foremost, with coordination of care, improvement of patient health, and fraud as secondary considerations at best. The same recommendations are appropriate for Medicaid.26
14. Encouraging better data analytics across programs and jurisdictions is a must. The entire healthcare system could benefit tremendously from the same level of inter-agency data sharing that is common in law enforcement, particularly in the tracking of sex offenders. When sex offenders move between states they are required to register immediately with local law enforcement. If they miss their deadline, they are flagged instantly by sophisticated systems pulling information from public sources. Doctors who have been sanctioned for fraud, hospital administrators who have engaged in fraud, DME salesmen with fraudulent convictions, criminal beneficiaries, and others are much freer to set up shop in a new state—or to send a new, unknown member of a fraud ring into the system—without being reported from their prior jurisdiction.
15. Require Medicare and Medicaid to pay closer attention to Medicare ID numbers that show outlier behavior. Individuals who are excessively billing at, say, emergency rooms are likely getting poor, uncoordinated, inefficient care, or their Medicare/Medicaid cards are being billed by fraudulent providers with or without the patient’s knowledge. In either case, both the individual’s health and the taxpayer’s pocketbook would be better served by being instantly identified.
16. Data sharing across departmental jurisdictions and with state and local governments should be done with the same seriousness as in national security. Prior to September 11, the CIA and the FBI rarely communicated. Now they compare intelligence frequently. There are multiple databases of Medicare and Medicaid providers and suppliers along with their disciplinary records.27 But these databases are not as universally comprehensive or as accessible as, say, the National Instant Criminal Background Check System (NICS) used to keep guns out of the hands of criminals. The National Crime Information Center is another law enforcement tool that allows a local officer to have instant, nationwide access to a suspect’s criminal background. These systems are not perfect, but they are good examples showing how individuals with criminal records and/or disciplinary actions in the healthcare field can at least be flagged early. This concept was part of President Obama’s revised health proposal unveiled on February 22, 2010, based on legislation introduced by Congressman Mark Kirk with bipartisan support. We should utilize data from the Social Security Administration and IRS for these efforts as well.
17. Require cost reports for Ambulatory Surgical Centers (ASC) similar to what is currently required for hospitals by the Centers for Medicare and Medicaid Services (CMS). It is understood there are specific differences between an ASC and a hospital, and the report requirements should be modified to accommodate this.
18. Migrate Medicare and Medicaid beneficiaries into arrangements with personal health accounts in which individuals have direct and immediate financial incentives to engage in behaviors that improve their health. The current system includes nothing to deter patients with Medicare, Medicaid, and most private plans from scheduling as many physician visits as they can. Indeed, a classic 2003 New York Times article, entitled “Patients Line Up for All That Medicare Covers,” accurately captures a culture where seniors on Medicare can get as many healthcare services as they can fit on their calendar, regardless of cost to taxpayers or the lack of medical benefit.28
There are myriad ways to structure personal accounts, the least controversial being zero-balance accounts where beneficiaries are paid small amounts of money for achieving improved health status. The vast majority of healthcare spending in the coming decades will be on people with chronic conditions. This means personal choices around care regimens will have a major, long-term impact on quality outcomes and cost. We must continue developing and deploying models of healthcare financing that maximize patient behavior change toward patterns of good health. Ultimately, that is the only way to save American healthcare. Account-based plans are the most effective way to create incentives to accomplish this goal.
The topic of healthcare fraud, waste, and abuse is too vast for one chapter, one book, or even a ten-volume series. But it is crucial for the American people to grasp just how large a problem this is, how much money is involved, and that there are solutions that would drastically reduce the problem without limiting access to medical care.
CHAPTER SEVENTEEN
Green Conservatism Versus Left-wing Environmentalism
With Terry L. Maple, President and CEO of the Palm Beach Zoo
More and more people around the world are discovering “green conservatism,” a new pathway to environmental stewardship and a compelling conservative alternative to the high-tax, big-bureaucracy, job-killing, and government-centralizing environmentalism of the Left. Green conservatives understand people can vigorously protect biodiversity and deliver cleaner forms of energy in a fiscally responsible way without the heavy-handed intervention and expansion of government. People with green core values who feel abandoned by extreme, big-government environmental positions are vastly more comfortable with the market-based, entrepreneurial approach of green conservatives.
Green conservatives are politically active in Australia, Canada, and the United Kingdom among other nations, and the label is increasingly claimed by an emerging center-right coalition in the United States. When we first applied the term in U.S. politics, we defined green conservatism as: “an optimistic, positive, science and technology-base
d, entrepreneurial, market-oriented, incentive-led, conservative environmentalism that creates more solutions faster and that will result in more biodiversity with less pollution and a safer planet.”
More simply, green conservatism describes conservatives who incorporate green concerns into their ideology.
From the business side, entrepreneurial environmentalists are the new agents of change on the frontlines of a creative environmental movement. Government’s role, rather than to dictate, is to incentivize. In homes throughout America, energy efficiency has been facilitated by government rebates and matching funds to encourage investment in efficient appliances, insulation, and technology.
Green conservatives worldwide are broadening their political platforms by including environmental initiatives. In the UK, conservative leader David Cameron has proposed a “smart power grid,” incentives for small-scale renewables, sustainable public transit, and technological innovation to cut carbon emissions. In France, a conservative president presides over a nation whose investment in nuclear energy is a model for other European countries.
And in Canada, Preston Manning, founder of the Canadian Reform Party, insists Western Canadian conservatism, with its rural and populist origins, must reconcile its support for strong growth with the necessity of environmental protection.
To Save America: Abolishing Obama's Socialist State and Restoring Our Unique American Way Page 21