President Barack Obama is seen through the eyepiece of a video camera as he delivers remarks on health care reform at Arcadia University in Glenside, Pa., March 8, 2010. (Official White House Photo by Samantha Appleton)
President Barack Obama is out and abroad stumping like mad for his embattled health insurance “reform” plan, claiming now that his administration will “crack down” on $100 billion in annual “waste and fraud” in the Medicare and Medicaid systems.
This new tough rhetoric is meant to win over some of the conservative opposition that sees all government programs as inherently wasteful, inefficient and corrupt.
But the claim itself is bogus.
The figure comes from a study done annually by the Centers for Medicare and Medicaid Services (CMS), and that study makes it clear that it is not looking at fraud, but at errors. And there are two things that can be said about those errors, most of which appear to involve problems like illegible signatures on doctors’ orders, or lost paperwork needed to document that a treatment being billed for actually happened.
The first point to make here is that such errors are equally prevalent in the private sector, only the chances are that in the private sector, the errors more often lead to shortchanging or denying care to the patient, while in the public sector, they as often lead to somebody or some institution getting paid more than they deserve for treating a patient.
Second, the errors in the Medicare program (there has been no systematic study, according to a spokesman at CMS, of error and fraud in the Medicaid program, much of which is funded and managed by the various states), cut both ways, with some errors leading to an overpayment or a payment for a service that wasn’t actually provided, and some errors leading to an underpayment for a service that was provided. Also not reported at all are errors that led to a person’s being improperly denied care altogether. (The same is true for the Veteran’s Administration, by the way, which is notorious among veterans for improperly denying claims of service-connected disabilities.)
According to the latest CMS report, the error rate for Medicaid parts A and B–the hospital and physician part of the program, was 7.9 percent or approximately $24 billion. Of this, $23 billion was said to involve overpayments, and $1.1 billion was said to involve underpayments. The underpayment figure looks suspicious, because in prior years, when the overpayment figure was roughly $9-$10 billion annually, the underpayments came in at about $1 billion also. It seems unlikely that overpayment errors in 2009 would more than double, while underpayment errors would stay the same.
Nearly all the underpayment errors–$800 million worth in 2009–were for inpatient care. This compared to $6 billion in overpayment errors. In otherwords roughly two out of every 15 errors involved the patient or the patient’s physician or hospital being shorted by Medicare.
CMS claims that the estimated error rate for Medicaid in 2009 was 8.7% for the federal government and 10.5% for the states and counties that administer the program locally. That would be $39 billion of the $98 billion in errors and fraud found in both programs combined for the year by CMS, and cited by President Obama in his “$100 billion in waste and fraud” claim.
But bear in mind that unlike Medicare, Medicaid is a welfare program, which means that the bias is towards denying benefits to applicants, as anyone who has had experience with Medicaid can tell you. Furthermore it is a program administered by both state and federal bureaucrats.
Back in 1977, when I was county government bureau chief for the Los Angeles Daily News, I got an urgent call from my editor, telling me to hop on a story based upon a release by the L.A. County Department of Social Services claiming to have discovered that 5.83 percent of welfare recipients were being overpaid because off errors and fraud, and that a campaign was being implemented to attack the problem, which was costing the county millions of dollars a year. Naturally, the editor saw this as a page one piece, perhaps a banner headline, for the next day’s edition.
I called the head of the Department of Social Services and asked a simple question: What is the error rate in the other direction? What percent of welfare applicants and recipients were being undercompensated because of errors? After a little investigation, she returned and informed me that the underpayment error rate was exactly the same: 5.83%! When I reported this back to the City Desk, there was an audible groan on the phone. The story had lost all importance to the editor. And yet, I thought, wasn’t an underpayment of welfare benefits to a poor family of far greater consequence than an overpayment is to the taxpayers? Getting shorted $100, or even $20, for a family living on, or below, the edge, would be catastrophic.
My guess is that a good study of underpayments and overpayments in the Medicaid program of the federal government and the states would more than likely give the same kind of result: an error rate in terms of underprovision of benefits that is equal to in percent and dollar amount the overpayment of benefits. And in fact, with welfare type programs like Medicare, there is also an unmeasured or unmeasurable problem, which is people who are wrongly denied benefits at all. They aren’t underpaid because they are simply turned away from public assistance for health care when they are actually eligible.
The point here is that if there is an error rate of about 9.5% in Medicaid (I’m averaging the federal and state error rate estimates for 2009), then either half of that $39 billion is probably underpayment errors, or, if they are only counting overpayment errors, there is almost certainly another $39 billion that should have been paid out for care of poor families that was not paid out.
Either way, the president’s incendiary claim that there is $100 billion in waste and fraud in the Medicare and Medicaid program is way off the mark.
If the president were serious about the problem, he would call for an honest investigation to make certain that everyone potentially eligible for medical coverage and assistance in both programs gets the full benefits to which they are entitled, to minimize inadvertent overpayments to providers, and to prosecute to the full extent of the law those who defraud either program.
That would be fine and appropriate. But at the same time, the president is also disingenuous in the extreme when he just attacks fraud and waste in Medicare and Medicaid, as though there is not massive fraud and waste in the private insurance industry and the rest of the medical industry. Indeed, much of the fraud in the Medicare program is in that part of it that is contracted out to the private insurance firms that offer the so-called MediGap insurance policies.
Nearly all the rest of the actual fraud is perpetrated by private physicians, private hospitals and by other medical industry firms and pharmaceutical companies, which submit false invoices and charge for services and goods not delivered. And as CBS’s “60-Minutes” program and other news organizations have reported, there has been little or no effort devoted to prosecution of such fraud, though it totals in the tens of billions of dollars per year.
That’s not a problem with “government-run health care”–a bogeyman that the president regularly pulls out to pillory–but with private healthcare.
The president knows this, but since his whole “reform” proposal is built around the private insurance sector, he’s not going to say that.
Then again, what political strategist guru in the White House came up with the idea that attacking alleged “waste and fraud” in “government health care” would be a good way to win support for Obamacare?
Dave Lindorff is a Philadelphia-based journalist. He is author of Killing Time: An Investigation into the Death Penalty Case of Mumia Abu-Jamal (Common Courage Press, 2003) and The Case for Impeachment (St. Martin’s Press, 2006). His work is available at thiscantbehappening.net
“According to the latest CMS report, the error rate for Medicaid parts A and B–the hospital and physician part of the program, was 7.9 percent or approximately $24 billion.”
It’s hard to take serious a journalist who makes such a fundamental flaw … Medicare has Parts A & B not Medicaid.
We all remember the TV show “Roots” could this have been the real inspiration for AmeriChoice Health. The 101 Dumbest Moments In Business 2003 EDITION Whiffed pitch No. 6: blatant stereotyping. By Mark Athitakis April 1, 2003 (Business 2.0)– GRAND PRIZE WINNER, DUMBEST MOMENT OF 2002
In September, insurance company AmeriChoice brings trucks to blighted neighborhoods in New York City and gives away coupons for free chickens as an incentive for the underprivileged to switch their Medicare coverage. New York state senator Carl Kruger files a complaint with the state attorney general. The 101 Dumbest Moments In Business 2003 EDITION – April 1, 2003 Apr 1, 2003 … Just don’t tell him about the “Chinese health balls.” ….. In September, insurance company AmeriChoice brings trucks to blighted … New York state senator Carl Kruger files a complaint with the state attorney general….. Falling on his sword, Welch announces he’ll give up most of the perks,…
2009 and 2010 $120,000 from your tax dollars at work
Philadelphia PA Mayor Nutter received two years in a row $60,000 checks to help keep open and operate the city swimming pools. These checks came from AmeriChoice Health and on the surface seems like fine gifts. Yet, they are Bribes non the less, these checks come from a company who receives all its money from the Federal State Governments as a vendor for Medicare Medicaid services is not allowed to offer bribes kickbacks and money gifts of any kind in order to promote its share of the market place. This is also not allowed as a use of your taxpayers dollars yet it happens.What does it really cost the City of Philadelphia to receive this money? Americhoice Health has a long history of corruption over the years yet seems to be protected by those who are responsible to over see their actions why is that? Sorry must apologize just received a notice that AmeriChoice Health was under the impression they thought they were suppose to have started their very own stimulus and economic program package and the one they implemented, they had no idea it violated all the Stark ,Health and Kickbacks laws. Some one will have to notify the following departments it was all a mistake or error in judgement, the Department of Justice, CMS, Dept of health and Human resourses,the FBI,and IRS, and any other agency effected by this tragedy or unfortunate misunderstanding. No harm, no fowl, forgive and forget, OK, then how about some coupons for a free whole fried chicken…..
Among its provisions, the anti-kickback statute penalizes anyone who knowingly and willfully solicits, receives, offers or pays remuneration in cash or in kind to induce, or in return for: A. Referring an individual to a person for the furnishing, or arranging for the furnishing, of any item or service payable under the Medicare or Medicaid program; or B. Purchasing, leasing or ordering , or arranging for or recommending purchasing, leasing or ordering, any goods, facility, service or item payable under the Medicare or Medicaid program. Violators are subject to criminal penalties, or exclusion from participation in the Medicare and Medicaid rograms, or both. A violation of the anti-kickback law is a felony offense that carries criminal fines of up to $25,000 per violation, imprisonment for up to five years and exclusion from government health care programs.The federal anti-kickback statute, 42 U.S.C.§ 1320a-7b(b), prohibits individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid or any other federally funded program.
If this were any one person not a corporation they would be in jail now, if the FBI were called in on this matter they would be in jail now, if the IRS were notified they would be in jail now. Since all Ameri-Choice checks come from the United Health’s home office they should be held equally responsible for any bribes, kickbacks, Stark, Fraud and inducements violations that have occured. Federal and State Governments have developed such a depended position with this company that laws and rules no longer apply for them.This role is nothing new for the AmeriChoice people and its been going on for years, look at some of the prior news articles that date back for years only now they can afford to hire the best of Law firms and give the most for Political contributations all on the back of the taxpayer. Sure the Laws have become tighter but you can still dance away their problems.
Three years ago they were reported to these Federal agency’s and as of todays date not only were they allowed to continue doing business but were never charged once. Protected vendor status sure, politics sure,limited government budgets sure, Federal and State officals looking the other way sure, and rather then stop these activities a strong desire not to rock the boat existed. Even with the vast changes in the laws and budgets,a hands off policy remains, you tell me what’s wrong with this picture? The Government created this monster and now they don’t know what to do about it, like shooting yourself in your own foot etc. Tons of money to advance their national growth, its market positions, tons of money for political donations, tons of money to send 75 millon back to its home office from New York state alone, tons of money to suppot National TV shows, tons of money to pay hugh State fines, tons of money to hire the very best law firms, tons of money to pay for bribes and kickbacks, tons of money for hugh salarys and bonuses, all done on the back of the American taxpayor, you see this company receives all its money from the Federal government. Should your tax dollars be held to a higher standard? Should the government agencys responsible for there review be held to that same standard?Should the IRS audit their corruption? Why has this company not been charged? How long can the buck be passed here in more ways then one? Hey, it’s your tax dollars don’t complain now then don’t complain later.tax dollars for bribes // Oct 6, 2010 at 8:57 am
Election Year Medicaid Medicare Inducement issues left open for November not openly discussed.Politics have gone from heated to man on fire thoughts. Also the Judicial dilemmas, since all are offically allowed to bear arms again, the big city Mayors are concerned about how the poor will be able to rearm themselves, and are looking for some type of financial relief from Federal State Medicaid programs to maintain their status quo.The higher courts face tough issues this term since making honest fraud legal, there agenda now turns toward making honest kickbacks and honest bribes equally as legal. This topic remains high as a shared issue by the medicaid medicare enrollment providers since they are looking to expand inducements past the complicated pregnancy stage.
The DOJ has serious concerns that if legalized marijuana in California for medical reasons could be used as a inducement or inticement to help secure new enrollments for the Federal State Medicare Medicaid programs.The State of California is concerned that if the Feds step up their effort in killing off the marijuana crops it could cause higher tax problems that effect Medicaid currently under consideration by the State ‘marijuana tax control board’. Limo drivers cancel their planned Medicaid Cuts DC rally and leave for California to protect this years crop. Wow, don’t think I would like to be in Politics for this years elections. Govenor Schwarzenegger indicated that if the Tea Partys membership keeps holding their rallies at our Marijuana burning fields they will have to be taxed for their free use of inhalants, prior to having them bused back to Arizona. Senator Mccain wants the deportation of illegal Mexicans to stop immediatley claims their State has gone to POT and insists California return his landscapers at once.
UnitedHealth to bestow its name on local units Washington Business Journal – by Ben Fischer Date: Wednesday, October 27, 2010, 4:51pm EDT Read more: UnitedHealth to bestow its name on local units | Washington Business Journal
Article: UnitedHealth to bestow its name on local units By Ben Fischer, Washington Business Journal, Health Care Focus, October 27, 2010 Summary: UnitedHealth Group Inc., the country’s largest health insurer and No. 3 in the Washington market, is consolidating its brand by emphasizing its ownership of some local health plans and giving its business units more straightforward names. Unison Health Plan of the Capital Area, a Medicaid-managed care plan in DC, will now be part of a subsidiary known as UnitedHealthcare Communities and States. Previously, the division handling government-funded plans was known as AmeriChoice. UnitedHealth’s Medicare supplemental plans and other products for retirees, formerly called Ovations, will now be known as UnitedHealthcare Medicare & Retirement. The rebranding addresses will emphasize the company’s size and broad range of services, which can help manage medical costs by providing data and efficiencies. The company also wants to simplify its own segment of a confusing health care marketplace.
Confronting Health Care ‘Demons’ Anthony Welters Took an Unlikely Route to Head AmeriChoice, an HMO for the Poor
The Washington Post May 27, 2002 By Bill Brubaker Anthony Welters grew up in a one-room tenement in Harlem, sleeping behind a curtain with his three brothers, he says. Today, he lives in a five-bedroom, seven-bathroom house on five acres in McLean. He has a 75-acre farm in the Blue Ridge Mountains. For a change of pace, there is a 5,000-square-foot house in Aspen, Colo., recently assessed at $3 million. Welters, 47, made his fortune in health insurance, serving a specialized market. The market is the poor. Federal and state audits concluded in the early and mid-1990s that ineffective oversight by Pennsylvania officials had enabled Welters and his partners to make too much money from their taxpayer-supported business. The audits said the Welters group had paid itself millions of dollars in management fees — paid to other companies they controlled — and millions more in bonuses.
Welters’s health-insurance business expanded to New York in 1994 and New Jersey in 1996. In both states, the HMO was known as Managed Healthcare Systems (MHS). In New York, state investigators discovered something was not right about two clinics that MHS retained to serve patients in the borough of Brooklyn. They determined that from 1995 to 1997 the clinics were being staffed largely by “unsupervised physician assistants or nurse practitioners,” New York state Attorney General Eliot Spitzer announced in May 2000. The investigation also found that patients were “consistently complaining that they were having difficulty getting services or being seen by a doctor.” MHS “failed to take any corrective action or properly oversee” the clinics. Spitzer announced a settlement in which MHS repaid more than $2 million to the Medicaid program for services the clinics never provided. In October 2000 MHS changed its name to AmeriChoice of New York. Anthony Welters, Chairman of AmeriChoice Corp.: “What [should] a person who takes a $200,000 investment and turns it into a billion-dollar company … receive? I don’t know. But I know this: I’m not going to apologize for it.”
<http://www.washingtonpost.com/wp-dyn/articles...
Comment: Medicaid's chronic under-funding threatens access to care for the low-income individuals covered by this program primarily because many providers will not participate at rates that frequently do not even pay overhead expenses. Several state governments have turned over their Medicaid funds to private corporations to administer these programs. Mr. Welters exemplifies how well these plans fulfill their corporate responsibility to their shareholders and executives.
Congressional response don’t asks don’t tell.
Full Name: Wayne Berman Title: Vice-Chair; Finance Co-Chair; Adviser.What would Elmo say about this.
Over the course of three years, Berman’s lobbying firm was paid $660,000 to lobby on behalf of UnitedHealth subsidiary Americhoice, a managed care HMO providing health insurance to Medicaid, Medicare, and SCHIP recipients. Specifically, according to the lobbying report, they lobbied on Medicaid issues in the Deficit Reduction Act of 2005.[Americhoice Lobbying Reports 2004 – 2007; Americhoice.com ] Berman Also Lobbied For “Absurdly Low” Rates for Medicaid Managed Care Companies to Pay Out of Network Hospitals. Also included in the DRA, and mentioned as a lobbying issue on Berman’s Americhoice lobbying report, was a provision setting rates managed care companies must pay to out-of-network providers — mainly hospital emergency rooms — for care received by Medicaid beneficiaries. Rather than forcing managed care companies to reimburse out-of-network hospitals an amount comparable to network providers, the legislation set the default amount to the state’s “fee-for-service rate,” which often is “absurdly low.” The provision thereby shifted financial responsibility for services to Medicaid beneficiaries from the managed care companies to the hospitals themselves, permitting managed care companies to rake in huge profits, while hospitals incurred added losses.[Modern Healthcare, 1/29/07; Text of S. 1932] To Save Money, Bill Cut Services to Medicaid Beneficiaries, But Left Managed Care Providers Untouched. Under the final budget package, substantial Medicaid spending cuts were achieved by imposing new premiums and increased co-payments on Medicaid beneficiaries; some costs were also shifted to the states, who in return were awarded new powers to drop coverage or reduce benefits to certain beneficiaries. In a letter to Senate Majority Leader Bill Frist, the AARP CEO decried the final bill, saying it “protects the pharmaceutical industry, the managed-care industry and other providers at the expense of low-income Medicaid beneficiaries.”[Inside CMS, 12/29/05; Los Angeles Times, 12/22/05; World Markets Analysis, 12/21/05; The Hill, 12/20/05]
The Players and whats up for grabs. Profits United Health Group 2010 $4.293 billion
Here are some other 2010 budget numbers: Wonder what it cost CMS ( Can’t Manage Sxxx) to operate each year.$453 billion Medicare///$290 billion Medicaid ///$78.7 billion Department of Health and Human Services/// UnitedHealth Group Awarded TRICARE Managed Care Support Contract … Jul 13, 2009 … UnitedHealth Group Awarded TRICARE Managed Care Support Contract for more than $20.3 billion. BILLIONS awarded and still to be awarded United’s AmeriChoice unit is the largest government contractor administering state Medicaid programs for the poor and federally sponsored plans for children. AmeriChoice’s revenue rose 34% last year, to $6 billion. United Health Group and its subsidiarys must be exhausted from signing Corporate Integrity agreements each and every year and as reward for their violations well what happens? they are awarded more contracts and more money and maybe even an ambassadorship here and there and if anybody should question what the heck is going on, then send them a Elmo doll.(Americhoice co-sponsors Sesame Street) Up side, Billions to be made, down side pay some fines (cost of doing business) move on and nobody goes to jail or gets excluded from the game. Get up the next day put on your Elmo costume and its back to work as usual. WOW, even in the Casino world or Mob world this would be a no no,suprised Hollywood has not done a movie on this or maybe even great TV.