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Old 02-26-2020, 10:37 AM
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Medicare for All: What to be done to reduce fraud?


(Thread meant to be a debate about only one specific aspect of Medicare-for-All: fraud - not a broader discussion of Medicare or healthcare in general)


Around a decade ago, CBS reported that Medicare was averaging $60 billion in fraud every year. I haven't seen the data in the years since, but it may have been continuously the same up to the present day as well.

Now, if Medicare is expanded to cover all of America, will it come with some major reforms to prevent fraud? The system would be much larger then, and therefore have far more claims to investigate and monitor (but presumably the Medicare administration's workforce would be greatly expanded as well.) Or would the potential criminal payouts be a lot lower since the government would be negotiating for lower prices with legit healthcare providers (therefore meaning that even phony medical billing could only net in a smaller amount as well?)
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Old 02-26-2020, 10:56 AM
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I think it will be a lot easier to pick up the patterns since Medicare will be paying for almost all of it: for example you can see that it will be impossible for a doctor to be treating this many patients--there aren't enough hours in a workday.

Also Medicare for all will be able to switch to other payment alternatives to pay for service with the existing extraordinarily complex payment schedules.
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Old 02-26-2020, 11:01 AM
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Here is a 2014 CBO report on "How Initiatives to Reduce Fraud in Federal Health Care Programs Affect the Budget", PDF: https://www.cbo.gov/sites/default/fi...mIntegrity.pdf

They invoke a "coming soon" estimate of fraud that I haven't found, and note that it's hard to quantify.

Are you interested in fraud and only fraud, or any improper payments (i.e. also waste and abuse)?

I think it would be useful to know how most medicare fraud is caught today. Audits? Internal whistle-blowers? Suspicious patients? I'll see what I can dig up.
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Old 02-26-2020, 11:07 AM
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Probably the same thing that happens in Canada and the UK. The government agency responsible for the administration of the system investigates possible cases of fraud.

These guys (https://cfa.nhs.uk/about-nhscfa/late...ter-fraud-2020) estimate that fraud costs the public 1.27 billion pounds a year, on a budget of 122 billion points per year. Or 1.04%. I cannot find it but I'm sure I saw somewhere that fraud in the medicare system in Canada is about 2% of costs.

How much money is lost to fraud in the USA under the current system?

Last edited by BeepKillBeep; 02-26-2020 at 11:12 AM.
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Old 02-26-2020, 11:29 AM
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Medicare fraud is currently estimated to be around $60 billion per year. In order to reform that they would have to change the rules so that fraud can preemptively be used to not pay. Currently all claims must be paid immediately and then Medicare has two months to prove fraud to get the money back.
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Old 02-26-2020, 12:33 PM
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As long as it prevents the rampant fraud by insurance companies and hospitals currently practiced against their customers, it will be an improvement. Even if it's the most corrupt national healthcare system ever.
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Old 02-26-2020, 01:42 PM
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why are you singling out medicare fraud? Med ins fraud in the private sector accounts for 3% - 10% of claims, which is $90B - $300B per year. And while Medicare's 9% is near the top it's still within the range.

https://www.nhcaa.org/resources/heal...th-care-fraud/
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Old 02-26-2020, 03:58 PM
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Originally Posted by BeepKillBeep View Post
Probably the same thing that happens in Canada and the UK. The government agency responsible for the administration of the system investigates possible cases of fraud.

These guys (https://cfa.nhs.uk/about-nhscfa/late...ter-fraud-2020) estimate that fraud costs the public 1.27 billion pounds a year, on a budget of 122 billion points per year. Or 1.04%. I cannot find it but I'm sure I saw somewhere that fraud in the medicare system in Canada is about 2% of costs.

How much money is lost to fraud in the USA under the current system?
Maybe Canada just runs a much tighter ship or the USA is just more prone to fraud. But going by the figures in that CBS article, it look like American Medicare fraud runs at about 11-12% of the costs compared to the two percent of Canada's.
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Old 02-26-2020, 06:31 PM
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Let's take a breath there, Speedy.
That CBS report is from 2015 and can charitably be labeled as sensational.

Let's look at numbers for 2017.
  • Medicare had a total outlay of $720B, and received $111B in premiums for a net expenditure of $609B (that includes administrative and other related expenses.)
  • The GAO lists the total fraud for that year at $52B
  • That's 8.5% of net or 7.2% of gross expenditures.
  • Fraud, or "improper payments" includes "mistakes", "inefficiencies", "bending the rules", and "intentional deception"

https://www.hhs.gov/about/budget/fy2...are/index.html
https://www.gao.gov/products/GAO-18-660T
https://www.gao.gov/assets/700/693156.pdf

Last edited by mikecurtis; 02-26-2020 at 06:36 PM.
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Old 02-26-2020, 07:30 PM
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Maybe Canada just runs a much tighter ship or the USA is just more prone to fraud. But going by the figures in that CBS article, it look like American Medicare fraud runs at about 11-12% of the costs compared to the two percent of Canada's.
Maybe, but then is this really about medicare for all? It is impossible to predict whether switching to universal healthcare (UHC) will increase fraud, decrease fraud, or have no real effect. It seems like UHC has less fraud, but as you say this could be one of those cases of "American Exceptionalism." From that context, I don't know enough about fraud in the USA to really make an intelligent statement about it one way or another. So, I'll bow out for the moment. If I have some time later, then maybe I'll try to check out some papers on medical fraud in the USA.
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Old 02-26-2020, 07:42 PM
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As long as it prevents the rampant fraud by insurance companies and hospitals currently practiced against their customers, it will be an improvement. Even if it's the most corrupt national healthcare system ever.
Not the best phrasing, however does make a point, if M-F-A even with fraud is overall more cost effective then what we currently have it's a plus for the citizens of the US.
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Old 02-26-2020, 07:48 PM
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Maybe Canada just runs a much tighter ship or the USA is just more prone to fraud.
I choose to assume Canadians are just better people. This assumptions proves useful in many situations when contrasting Canada to other nations.
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Old 02-26-2020, 07:52 PM
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I choose to assume Canadians are just better people. This assumptions proves useful in many situations when contrasting Canada to other nations.
As an American,

I'll agree.
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Old 02-26-2020, 08:18 PM
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Maybe Canada just runs a much tighter ship or the USA is just more prone to fraud.
I'd say the latter, just because in the USA healthcare is so expensive, that people who can't afford it (or who can afford it, but just don't want to pay) are motivated to commit fraud to get it. If your health expenses are covered either way, there's not nearly as much motive for fraud.
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Old 02-26-2020, 09:14 PM
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I'd say the latter, just because in the USA healthcare is so expensive, that people who can't afford it (or who can afford it, but just don't want to pay) are motivated to commit fraud to get it. If your health expenses are covered either way, there's not nearly as much motive for fraud.
Why would you think patients are the main source of fraud in Medicare (or regular healthcare for that matter)? I'm not sure how that would even work -- Grandma makes an insurance card on her laser printer, presents it for care and... well, she's found out immediately.

It seems far more likely that healthcare providers & insurers are the main source of any fraud in (this or any) system.
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Old 02-26-2020, 09:41 PM
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Why would you think patients are the main source of fraud in Medicare (or regular healthcare for that matter)? I'm not sure how that would even work -- Grandma makes an insurance card on her laser printer, presents it for care and... well, she's found out immediately.



It seems far more likely that healthcare providers & insurers are the main source of any fraud in (this or any) system.


I’m sure the providers are the main source of Medicare fraud - but as far as the patients go , if 60 year old grandma takes her 65 year old sister’s Medicare card to a new doctor, how will they know it’s not hers? Some offices have asked for ID if I’m a new patient, but not nearly all.
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Old 02-27-2020, 01:51 AM
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As long as you have payment per item of service, you multiply opportunities for fraud. The NHS largely operates on predetermined block budgets and salaried staff. Frauds tend to be around things like awarding supply contracts rather than core medical services.
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Old 02-27-2020, 02:19 AM
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Iím sure the providers are the main source of Medicare fraud - but as far as the patients go , if 60 year old grandma takes her 65 year old sisterís Medicare card to a new doctor, how will they know itís not hers? Some offices have asked for ID if Iím a new patient, but not nearly all.
Hey, you know what would really go a long way to ending fraud like that? Give the 60 year-old her own card.
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Old 02-27-2020, 04:54 AM
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Iím sure the providers are the main source of Medicare fraud - but as far as the patients go , if 60 year old grandma takes her 65 year old sisterís Medicare card to a new doctor, how will they know itís not hers? Some offices have asked for ID if Iím a new patient, but not nearly all.
In a system where everyone gets their care for "free" then the only way by which the 60 year old can defraud the system is by fooling the doctor into getting treatment she doesn't really need. I'm not sure it would be that much of a problem and the only way of guarding against that in any system is to have medical specialist assessing people..........which they do.
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Old 02-27-2020, 06:25 AM
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Hey, you know what would really go a long way to ending fraud like that? Give the 60 year-old her own card.
Yes, this is kind of important. If the "fraud" you're trying to prevent is people not eligible for the system fraudulently claiming that they are, making everyone eligible eliminates all that fraud in one fell swoop.

It doesn't do anything about doctors making false claims, but then that's a problem for every system.
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Old 02-27-2020, 06:25 AM
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Iím sure the providers are the main source of Medicare fraud - but as far as the patients go , if 60 year old grandma takes her 65 year old sisterís Medicare card to a new doctor, how will they know itís not hers? Some offices have asked for ID if Iím a new patient, but not nearly all.
I have never ever ever not been asked for ID the first time I had an appointment with a provider, and every time if it's urgent care or anywhere where they don't know me.
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Old 02-27-2020, 07:40 AM
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Maybe Canada just runs a much tighter ship or the USA is just more prone to fraud. But going by the figures in that CBS article, it look like American Medicare fraud runs at about 11-12% of the costs compared to the two percent of Canada's.
In terms of running a tighter ship, I'm surprised to hear anyone even discussing the possibility of using someone else's health card. In Ontario and every other Canadian province that I know of, health cards are issued through the same government offices that issue driver's licenses and use the same technology, including the user's photo and other security features. No one would be asked for ID when presenting a health card because a health card **is** ID. Apparently the unauthorized use of other people's health cards is the main reason they switched to the new high-security cards. I don't think fraud was a major problem even then, but this reduces it further.

I would suspect many other factors, too, related to single-payer vs the US system. When there is only one direct single payer, it's much easier to pick out unusual charging patterns. And because US health care costs are so astronomically high, there's more profit and incentive to conduct unnecessary tests, especially if the doctor has a financial stake in the medical lab (procedures like MRIs can literally cost ten times what they do in Canada). For-profit hospitals are rampant throughout the US, whereas almost all Canadian hospitals are non-profits.
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Old 02-27-2020, 08:59 AM
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Yes, this is kind of important. If the "fraud" you're trying to prevent is people not eligible for the system fraudulently claiming that they are, making everyone eligible eliminates all that fraud in one fell swoop.
I think only confused people are writing about this.
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Old 02-27-2020, 09:25 AM
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As people have mentioned, there are two types of fraud:
  1. Patients who are not eligible getting treatment
  2. Health Care Providers claiming for procedures they are not eligible for

In Canada, item 1 is greatly reduced because everyone legally resident in Canada is entitled to health care treatment. Fraud is limited to non-residents trying to get treatment. This includes people who are Canadian citizens but do not live in the country, but try and get medical treatment. If I moved to the US, say on a green card, I am no longer eligible for OHIP coverage (Ontario's implementation on UHC). I need to move back to Ontario and be resident for 3 months before I regain coverage. This does not stop people from keeping and renewing their health card every 5 years.

Item 2 will exist anywhere there are lazy or unethical providers. Claim for additional services not rendered, "upgraded" services - treatment vs consult, or sheer made up claims. This still happens here, but I think it's easier to catch since we have single payer the fraud is not spread around and the trends show up more quickly.

Last edited by FinsToTheLeft; 02-27-2020 at 09:27 AM.
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Old 02-27-2020, 10:41 AM
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why are you singling out medicare fraud? Med ins fraud in the private sector accounts for 3% - 10% of claims, which is $90B - $300B per year. And while Medicare's 9% is near the top it's still within the range.

https://www.nhcaa.org/resources/heal...th-care-fraud/
I agree with this thinking. Medicare fraud is about on-par with commercial insurance fraud, so I would expect the same processes and procedures to be in place today that insurance companies use (mainly, back-end auditing and collections, as well as law enforcement). Sure, it's not perfect, and could be improved, but I question the idea that Medicare is rife with fraud while commercial-grade insurers are much better at preventing/mitigating it. That is not a good assumption.
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Old 02-27-2020, 01:08 PM
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I think it will be a lot easier to pick up the patterns since Medicare will be paying for almost all of it: for example you can see that it will be impossible for a doctor to be treating this many patients--there aren't enough hours.
I've worked on data analysis and I think this is exactly right. Most fraud I've heard of has been concentrated in a small number of doctors who bill for procedures not performed. Since the patient is not getting billed, the patient is not going to notice.
It would be fairly easy - with all payment coming from one place - to build models of what doctors in specific regions and with specific specialties are expected to bill, and investigate discrepancies.
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Old 02-28-2020, 10:10 AM
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I've worked on data analysis and I think this is exactly right. Most fraud I've heard of has been concentrated in a small number of doctors who bill for procedures not performed. Since the patient is not getting billed, the patient is not going to notice.
It would be fairly easy - with all payment coming from one place - to build models of what doctors in specific regions and with specific specialties are expected to bill, and investigate discrepancies.
That sounds so easy but yet it is not being done now. Why not? You would think politicians would be more interested in a free $50-100 billion per year.
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Old 02-28-2020, 10:17 AM
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That sounds so easy but yet it is not being done now. Why not? You would think politicians would be more interested in a free $50-100 billion per year.
I think the idea is that it's not easy with payments coming from different places- no one entity has all the data.
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Old 02-28-2020, 02:07 PM
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That sounds so easy but yet it is not being done now. Why not? You would think politicians would be more interested in a free $50-100 billion per year.
Because doctors don't only bill Medicare. I suspect they are finding really blatant cases, but it is hard to do these kinds of studies if you have only a fraction of the data. Especially since you don't even know what percentage of the data you have.
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Old 02-28-2020, 09:12 PM
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That sounds so easy but yet it is not being done now. Why not? You would think politicians would be more interested in a free $50-100 billion per year.
You would think politicians would be interested in leveraging their position as purchasers of medications for VA and Medicare to get better deals and save money on medications those agencies buy, but Congress has barred the VA and Medicare from doing that.

Donít assume rationality in the US health care system.
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Old 02-28-2020, 09:33 PM
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I think it will be a lot easier to pick up the patterns since Medicare will be paying for almost all of it: for example you can see that it will be impossible for a doctor to be treating this many patients--there aren't enough hours in a workday.
Based on news stories Iíve seen occasionally, thatís exactly how fraud over-billing is caught in the Canadian process.

Since thereís only one payer, and itís all computerised, the Medicare officials find auditing very easy: ęComputer! Give us all the bills filed in Town X for ear-wax cleaning in 2019!Ľ

Je he computer spits out the info, and Dr Jones is off the charts for ear-wax cleaning. No other doctor in Town X has such a high rate.

So the bean-counters say ęComputer! Give us all the bills filed by all Doctors in the Province for ear-wax cleaning!Ľ

And Dr Jones is again off the charts.

So Dr Jones will get a visit from the auditors. Maybe it turns out that Dr Jones has invented a new marvellous technique for ear-wax cleaning, and is getting tonnes of referrals from other doctors, of patients with stubborn ear-wax blockages.

Or maybe Dr Jones is cheating the system.

Either way, the auditors for a single-payer system have a strong advantage over auditors in a private insurance system.

And that drives down rates of fraud (not Bryan Eckersīs theory about nice Canadians - sorry, Bryan. )

Criminologists have long been telling us that one of the best factors driving down criminal behaviour isnít the severity of the punishment, but the chance of getting caught. If single-payer gives auditors better tools for catching fraudsters, then that drives down fraudulent behaviour.
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Last edited by Northern Piper; 02-28-2020 at 09:37 PM.
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