The Obama administration and its allies like to brag about how the executive branch is cracking down on fraud and abuse in Medicare and Medicaid, which many believe costs the federal government in the range of $60 billion each year. (Reliable fraud totals are hard to come by, but most experts agree that it’s a very expensive problem, and official estimates indicate that the program made at least $48 billion in “improper payments” last year, including fraud.) StopMedicareFraud.gov, a project of the Centers for Medicare and Medicaid (CMS), touts President Obama’s “historic support for anti-fraud efforts” under a headline noting that fraud-fighting efforts are a “top priority” for the administration. John McDonough, a former Mitt Romney advisor who consulted with the administration on ObamaCare, points to a record number of prosecutions in fraud cases and argues that ObamaCare gives the government tools to “re-engineer the system” to help stop fraudsters, an argument that the Obama administration has used as well.
As I pointed out in my October print-edition feature, “Medicare Thieves,” fraud in government health programs has been a significant, well-known problem for years. According to the Cato Institute’s health policy director, Michael Cannon, the Government Accountability Office has issued 159 reports on fraud since 1986. So why has it taken until now to tackle the problem?
In part it's because the system is designed to work in such a way that makes fraud easy: Doctors, who are well-liked and carry significant political influence, don’t want a system that forces them to deal with much anti-fraud bureaucracy, especially given that Medicare’s payment rates are already low compared to private insurers. And Medicare patients tend to be wary of any reforms that might upset doctors and drive them from the system.
Which helps explain why Modern Healthcare is reporting that CMS has put two of its vaunted new fraud-fighting programs on indefinite hold after opposition from doctors and other health providers. A historic commitment to a policy priority apparently doesn’t stand up to a thumbs down from the health providers who make big parts of their living off the program.
For much more on Medicare fraud, read "Medicare Thieves."