Editor's Note: This week, former House Speaker and founder of the Center for Health Transformation Newt Gingrich is providing the question and serving as guest host for the blog.
The U.S. health care system wastes between $505 billion and $850 billion every year -- 22 percent, or approximately $200 billion, of which is fraudulent Medicare claims, kickbacks and other scams -- according to an October Thompson Reuters report. A few weeks ago, "60 Minutes" estimated that Medicare fraud costs U.S. taxpayers about $60 billion a year and has become among the most profitable crimes in America today, with increasing participation by organized crime.
I remember a 2005 New York Times article that revealed that New York's Medicaid program had become so massively complex and so lightly policed that it was easily exploited by a new breed of criminals. Stories like a dentist who billed 991 procedures in one day and one Buffalo school official who sent 4,434 students to speech therapy in a single day without talking to them or reviewing their records never cease to amaze. James Mehmet, the former chief inspector, estimated that up to 40 percent of all claims were questionable.
This New York Times story was the spark that eventually led to our book Stop Paying The Crooks. It provides an in-depth look at the fraud, waste and abuse crippling the U.S. health care system and offers solutions designed to end it. We believe it totals at least $100 billion each year in Medicare and Medicaid alone.
Unfortunately, current draft legislation does nothing proactive to eliminate fraud, waste and abuse in our health care system. Congressional Budget Office projections put savings at less than 1 percent of what they could be. We need real solutions that would dramatically reduce health care fraud so that savings could serve as a major pay-for for health information technology and covering the uninsured.
• Reuters estimates $200 billion and 60 Minutes says $60 billion in annual Medicare fraud. We at CHT believe it is at least $100 billion in yearly Medicare and Medicaid fraud. Are these figures reasonable? If not, how much fraud do you think is actually out there?
• Are the anti-fraud efforts contained in the leading Senate and House bills likely to produce significant savings?
• What sort of provisions should be contained in order to maximize savings?
-- Newt Gingrich
What The Bills Would Do
John Iglehart wrote a primer on the issue over the summer in the New England Journal of Medicine ("Finding Money for Health Care Reform -- Rooting Out Waste, Fraud, and Abuse").
Here's how the major health reform bills propose to tackle fraud, according to the Kaiser Family Foundation.
• The Senate HELP bill would establish an integrity coordinating council; a fraud, waste and abuse commission; and two federal positions to oversee and coordinate oversight of health care fraud, waste and abuse in public and private coverage.
• The House committees approved bills that would allow provider screening, enhanced oversight periods and enrollment moratoria in areas at elevated risk of fraud in all public programs; they would also require Medicare and Medicaid providers and suppliers to establish compliance programs.
• The Senate Finance Committee bill calls for intensive screening of providers, the development of a database to capture and share data across federal and state programs, increased penalties for submitting false claims, and an increase in funding for anti-fraud activities.