What's Driving The Enormous Medicare Fraud?

Comparison of Medicare fraud losses to other expenses in the federal budget (From AARP Bulletin, April, p. 10-11)

In my book, 'The Elements Of The Corporatocracy',   I noted that when a genuine social insurance program exists in a predatory capitalist society it is in constant peril from parasites, scammers, con men, assorted grifters and corporate predators.  Thus, it is no surprise that both Social Security as well as Medicare, the two most viable current social insurance programs, are under sustained attack.

In the case of the first, we learned from one website ('Lifelock'):

"There are a lot of ways to commit Social Security fraud. Not all of them are obvious. Fraud often occurs anytime someone receives Social Security payments they’re not entitled to. The Office of the Inspector General of the Social Security Administration (SSA) cites a few common examples:

• Hiding work activity while receiving disability benefits.
• Getting Social Security benefits for a child not under your care.
• Failing to let the SSA know that a beneficiary has died and continuing to receive and cash the checks sent to the deceased.

Consider this: About 6.5 million people who had active Social Security numbers in 2015 appeared to be at least 112 years old, a government audit found. The real number of living Americans more than 112 years old is closer to five."

In the case of Social Security the yearly losses from fraud are estimated to be in the billions of dollars. But this may still be an order of magnitude less than the fraud losses ($60 b) exacted on Medicare, as reported in the most recent AARP Bulletin ('Medicare Under Assault', April, p. 10)  Reading through the assorted strategies vermin use to defraud the program is enough to make a citizen vomit.  Probably the most odious, in my opinion (p. 20),  was the "recruiting" of homeless people to create fake patients.  These hapless pawns are then trotted into doctors' offices to be approved for services and the physicians themselves may or may not be in on the scheme  In return for signing off on falsified documents, the phony patient is paid a small amount (e.g. $20- 30) for showing expensive care never delivered.  As the segment notes: "Homeless shelters are fertile ground for recruiters involved in this type of fraud."

Well, I wouldn't go so far as to call them "recruiters" - they are bugs, vermin - who merit extermination, just like roaches.  Am I being too "hard", too "judgmental", too "inhumane"? Nope, I am calling it exactly as I see it: anyone who preys on a homeless person, giving him or her chump change to help undermine a health insurance system that serves tens of millions,  is a feral rat who deserves to be put down.   Let's further note, for emphasis, all these modes of fraud undermine the ability of real patients to find treatment - which may lower reimbursement rates for doctors and facilities - and even push some providers to stop accepting Medicare. 

The assorted other modes of  Medicare fraud include:

1) Medical identity theft:

Here, the scammer or thief manages to get hold of your Medicare card or the beneficiary number.  This can then be used to access medical services under your name - say to get treatment, devices or medicines. This interference can also impinge on your medical care (say if the wrong treatment is administered because providers believe you are the frauduter)

2) Upcharging:

This is also known as "up code billing" and it occurs whenever Medicare is billed for a more expensive device or procedure than the one you actually received.  This is why seniors need to be vigilant in checking Medicare statements, especially the CMS Summary sheets. Any discrepancy noted ought to be followed up by calling the doctor to rule out an innocent billing code error.

3) Phantom billing - double dipping:

These fraudulent tactics would also show up on one's Medicare statements.  "Phantom billing" is charging Medicare for services not delivered. Double dipping is filing duplicate claims for one service or procedure. If not caught and rectified they can hurt futur health coverage.

4) Fake freebies:

These are used by scammers to sucker the unwary into receiving devices or services,  e.g. wheel chairs, walkers, back braces you may not need. They're usually offered at "no cost to you"  but Medicare is billed for them. Often they are inferior products, e.g. walkers that collapse.

5) Prescription fraud:

In this fraud, Medicare crooks take your Medicare number and use it to fill prescriptions, e..g. for hydrocodone, then sell them on the black market.  Very often people discovere they have become a victim when their prescriptions are denied.

It follows from all that's been discussed that eternal vigilance has to be the motto of every Medicare recipient. It is in the self-interest of all of us to look over every statement carefully, and guard our Medicare cards and numbers as zealously as we would our car or house keys.

Highlight of '60 Minutes': Social Security's Thieves Will Be Caught!

Last night's '60 Minutes' was mind-blowing for two reasons: 1) the Americans (still living) accidentally declared dead and placed on Social Security's 'Death Master File', thereby rendered unable to get credit or do banking. And (2) the number of fraudsters (near 6.5 million) collecting the Social Security payments of the beneficiaries (often parents) who've long since died. In this last case, the continued collections appear to show 6.5 million people "have reached the age of 112".

Of course, this is preposterous, as Patrick O'Carroll, the Social Security Inspector General pointed out to reporter Scott Pelley.  What has really occurred is that the actual beneficiaries are deceased but relatives continue collecting their S.S. checks either out of ignorance of the law or true malice. In either case they end up as felons when finally caught - and they will (most) eventually be caught.

In regard to (1), the four citizens Pelley interviewed all described the shock  of first learning their Social Security records turned them up as "deceased" on the Death Master File - which effectively left them dead financially. All credit closed, all bank accounts shut down, no ability to use any kind of account to pay for needed services, or goods. (One of the women had to live out of her car for more than 6 months and ultimately took 5 years to get her existence acknowledged.)

The Inspector General observed most of the problems are to do with the states who are responsible for reporting deaths to the feds. As O'Carroll put it "some states have very good data, and in other states it's done on a more haphazard level. So there will be some falling through the cracks."

But as gnarly as this is, the theft of Social Security monies by fraudsters is much worse, possibly bilking the system of billions each year - even while congress continues its raids. (See previous post). O'Carroll pointedly told Pelley that "live people falling through the cracks isn't what keeps him up at night". The much more costly problem is "the millions of Americans who do die but are not recorded."

Thus, Social Security has no death data for six and a half million people, and in terms of ages, that would make them all over 111 years of age. But as O'Carroll noted, in fact there are at most ten such oldsters in the country making all the rest liars and thieves. (If the death isn't recorded in the Death Master File the payments keep coming, but it is the responsibility of the offspring or caregivers to report it, not the Social  Security Administration to do the notification and tracking down)

One of the sad cases highlighted in the piece was that of Sandra Kimbrough, a wife and mother and former caregiver to her mom until she died 30 years ago. She had taken in her aging, ill mother and had a joint back account with her. When her mother died, in 1984, the benefits from Social Security kept coming.

Pelley asked her if she reported the death to Social Security and Sandra replied:

"I did not. I thought perhaps it would have been taken care of by the funeral director at some point"

Compounding this bad assumption was the incorrect information conveyed by the mother herself before her death, telling the daughter she "would be entitled to her benefits after her death."

And so she went on that assumption and collected $160,000 over thirty years.

Of course, this is total nonsense. No offspring is "entitled" to collect the benefits of a deceased parent and she could have found this out with just a bit of energy and some Googling. Now, she is a felon facing at least a year in prison because of her bad assumptions and acting on bad information.

Others collecting S.S. monies under such false assumptions would do well to stop and do some serious research to get their brains in order. Lest they also receive a call from a Social Security agent.

How will they be found out? O'Carroll notes that audits are now being done to check whether a person (supposed dead but not reported) has been getting any access to Medicare over the past three  years. If they haven't been the Social Security office will make contact, usually by phone and inquire as to the case. If the actual person can't be produced for interview or contact, those relatives collecting the checks will be in trouble.

The best course of action for anyone who has been collecting S.S. monies while an ill parent has been in their care, and who is now deceased?  Get thee to a computer pronto, and send a letter - along with a copy of the death certificate- to the Social Security Administration. It is YOUR responsibility to inform them, not theirs to seek out the needed info from obituaries.

Do not, under any circumstances (or out of false beliefs or assumptions) continue to collect payments that you no longer have  any right to! Better, inform yourself of current Social Security law so you know what your obligations are - as well as the real benefits - due YOU.