Healthcare Fraud in the U.S. – A Growing Epidemic
According to Forbes Magazine, total health care spending in the United States increased to $3.8 trillion in 2014. The Economist states that $415 billion is attributed to Medicaid services and $600 billion resulted from Medicare programs. A large portion of that financial dent is due to healthcare fraud, a crime that is becoming increasingly prevalent. Although the exact amount stolen through healthcare fraud is undefined, the former head of the Centers of Medicaid and Medicare Services along with a member of the Rand Corporation estimated in 2012 that healthcare fraud accounted for $98 billion of Medicare and Medicaid expenses. In addition, Cornell Law School states that 10 percent of healthcare spending is due to fraud. The Department of Justice recently reported on the largest Medicare bust in U.S. history. This takedown was led by a Medicare Strike Force, a combined effort of agents from the Federal Bureau of Investigation (FBI) and the Health and Human Services Division of the Office of the Inspector General (HHS-OIG). In total, charges were brought against 243 individuals who were responsible for $712 million in fraudulent billing to Medicare and Medicaid. Suspects were charged with various crimes including violations of anti-kickback laws, money laundering, aggravated identity theft and were associated with home health care providers, durable medical equipment (DME) suppliers, pharmacies, ambulance companies, and other medical entities. The defendants represented a variety of occupations including physicians, nurses, certified medical professionals, and business owners.
This takedown highlights the healthcare fraud epidemic that is consuming funding from the Medicaid and Medicare services offered by the U.S. government. Furthermore, it exposes the multiple networks of fraudulent healthcare providers operating in the U.S. today. The takedown occurred in 17 districts across the nation, including major cities like Detroit, Los Angeles, New Orleans, and New York City. In Detroit, three individuals in a hospice facility were arrested for making referrals for patients to two doctors in a healthcare fraud scheme. In New Orleans, four people were charged with running companies in Louisiana and California that billed patients for talking glucose monitors that were unnecessary. Although every case is different, a typical healthcare fraud scheme can be described as a network of different fraudulent business entities, be it a home hospice facility, ambulance company, pharmacy, that serve as nodes and the referral of patients, or beneficiaries, serves as the edges that connect these nodes. To explain further, a physician in a medical facility can offer kickbacks to patient recruiters who bring beneficiaries to their business. The exchange of beneficiaries, and subsequent profit generated from billing for false services and goods, is the basis and purpose of the fraud scheme as well as the foundation for the “business” partnership between one medical entity and another. Unfortunately, healthcare fraud networks and schemes are very intricate and it appears as though the fight against healthcare fraud will continue. For now, however, we can appreciate the large step this Strike Force takedown has made in mitigating healthcare fraud in the U.S.