Medicare Spending Growth Coming Under Control as Obama Cracks Down on Fraud
The federal authorities in Dallas arrested a Texas doctor and six others Tuesday in a home health care scheme that the authorities said cheated the government out of nearly $375 million in Medicare and Medicaid fees. It was so brazen, they said, that it involved registering homeless people for home health care services they never received.
The case against Dr. Roy and his associates is the most recent of several large investigations by the Department of Justice aimed at cracking down on Medicare fraud. Last year, the owner of a mental health care corporation in Miami was sentenced to 50 years in prison after pleading guilty to billing Medicare for treatments that were not necessary or never provided.
Since 2009, Medicare fraud strike forces — teams that are run by the Department of Justice in nine locations around the country — have charged more than 800 defendants with fraud totaling more than $2.2 billion, according to department officials. The case represents the largest fraud amount orchestrated by a single doctor in the history of the Medicare strike force operations, federal officials said.
It seems to be having a noticeable effect on the growth in Medicare spending:
Here’s some good news to start the New Year. Without any major change in its structure, Medicare’s spending growth has started to slow down on its own.
Medicare costs have risen by an average of about 12% a year since the early 1970s, and they grew by about 9% a year between 2000 and 2009. But things started to change in 2010 according to the nonpartisan Congressional Budget Office. That year’s increase was only 4.3%. And in 2011, it was even lower, at 3.8%. Projections now put the growth rate in 2012 at close to zero.
The spending slowdown for Part B of the program, which covers physician and other outpatient services, has been especially dramatic. The program’s chief actuary sees spending growth declining to the lowest levels ever.
But wait! Republicans have assured us that Obamacare would bust the budget!
In fact, Obama has finally brought the runaway growth of Medicare under control by cracking down on fraud and waste. The crackdown on fraud is already underway by the Justice Department, and the crackdown on waste is the part of Obamacare which Republicans demonize as “death panels,” but which is actually an effort to get rid of wasteful spending on treatments that aren’t necessary or don’t work and instead focus spending on best practices.
That part of the law has yet to come into effect, but should help to further control costs if it is allowed to work.
Another big insurance fraud bust came across the wires after I posted this page:
A $250 Million Fraud Scheme Finds a Path to Brighton Beach
The plot involved 10 doctors, 9 separate clinics in New York City and 105 different corporations, all in service of a health care fraud ring that federal authorities say conspired to steal more than a quarter of a billion dollars from insurance companies. And when the details were announced on Wednesday, they cast an unflattering spotlight on how immigrants from the former Soviet Union have often dominated such schemes in the city.
This one, like many others, was rooted in Brighton Beach, Brooklyn, the locus of the city’s Russian-speaking immigrant population, many of whom grew up under a Communist system that bred disdain for the rules and a willingness to cheat to get around them.
Brighton Beach has one of the highest rates of health care fraud in the nation, according to federal statistics. In fact, an analysis of data from the Centers for Medicare and Medicaid Services, the federal agency that regulates those two programs, shows that more health care providers in the Brighton Beach ZIP code are currently barred from the programs for malfeasance than in almost any other ZIP code in the United States. (The top spot is in southern Florida, with its high proportion of older residents.)
“This is the Russian mind-set, and this is why it’s endemic in the system,” said one law-enforcement official who has investigated organized-crime groups from the former Soviet Union. “If you’re not scamming the system, if you’re not scamming the government, you’re not doing what you’re supposed to be doing — you’re looked upon as a patsy.”
Peter Orszag notes that the decline in the growth rate of Medicare spending has been faster than the decline in the private sector, despite the fact that most Medicare recipients have Medigap insurance to cover co-pays.
over the past few years, Medicare spending has decelerated more than commercial health-care spending has.
it has been hard to see why Medicare spending growth should fall more in response to an economic decline than other types of health spending would, when most Medicare beneficiaries have Medigap insurance that covers co-payments, and a larger share of their income (through Social Security) is protected from economic fluctuations.