Medicare fraud is a very real problem and one that is affecting every American citizen, regardless of whether or not they make use of Medicare services. This is summed up by the Director of the FBI, James B. Comey, who stated in a testimony to the Senate Judiciary Committee at the beginning of the month that: “We have witnessed an increase in health care fraud in recent years, including Medicare/Medicaid fraud, pharmaceutical fraud, and illegal medical billing practices. Health care spending currently makes up about 18 percent of our nation’s total economy. 
These large sums present an attractive target for criminals. Health care fraud is not a victimless crime. Every person who pays for health care benefits, every business that pays higher insurance costs to cover their employees, and every taxpayer who funds Medicare is a victim.”
Understanding that Medicare fraud is being recognized as a very serious problem, both for individuals, employers, and on a Federal level is important. However, the really interesting question doesn’t center on the amount of Medicare fraud taking place, but on the reason that it is taking place. What is motivating this increase?
A System that is Easy to Cheat
The current healthcare system in place is fundamentally flawed, and therefore lends itself to be defrauded without any real chance of repercussions: Because the industry is so large, and there are so many different types of fraud within it, many cases simply go unnoticed. What’s more, many cases of fraud are very difficult to challenge: one doctor chooses to have an expensive scan for their patient which another doctor feels was unnecessary. Who is to say which of those highly qualified medical professionals is right and which is wrong? Contrary to popular belief, it seems that this is the kind of fraud that is most on the increase, and costing the economy the most amount of money, rather than low level individual fraud which occurs when individuals who are in need claim health benefits they might not necessarily be entitled to. This kind of Medicare fraud is the most understandable type of fraud, where people in need of urgent medical attention or help to relieve their pain make what are bad decisions out of a form of desperation. Whilst still wrong, this isn’t the kind of Medicare fraud that time and energy should be focused on tackling. Instead, the current focus of investigation is on medical ‘big business’ fraud.
The simple answer to the question of what is motivating the increase in Medicare fraud is money: the incentive is almost exclusively financial. Serious healthcare fraud is now organized crime, with many of those individuals who are running fraudulent health care centers and committing the most financial lucrative crimes having no healthcare experience whatsoever. Physicians are hired to process falsified claims from these centers in exchange for large ‘kick backs’ and even vulnerable potential or would-be patients, such as homeless individuals, are encouraged to accept cash instead of treatment in return for the use of their details on falsified claims. The most common denominator in all of these cases of Medicare fraud is simple greed.
Not an Exclusively Public Sector Problem
It is important to note that this increase in medical fraud is not exclusive to medical fraud within the public sector. There is a myth (particularly among those loudest supporters of big business) that private medical care is somehow more effective than Medicare, however this simply is not the case. Fraud, greed, and exploitation exist in every aspect of the US Healthcare business, because it is vulnerable to exploitation. Health care fraud across all aspects of the sector makes a very attractive proposition for criminals and in a system that focuses on processing accuracy rather than claim verification, there is massive potential for that exploitation to take place.
Guest Blog by Helen Bray
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Citations
“Health care fraud takes many forms”, CNBC News Investigations, http://www.cnbc.com/id/46967717
“Testimony: Oversight of the Federal Bureau of Investigation”, The FBI, https://www.fbi.gov/news/testimony/oversight-of-the-federal-bureau-of-investigation-8
“Covering Health” , http://www.quotezone.co.uk/health-insurance.htm
“Collusion to defraud medical aids increasing”, Sunday Times Business, http://www.timeslive.co.za/sundaytimes/businesstimes/2015/11/23/Collusion-to-defraud-medical-aids-increasing
“Medicaid Fraud and Abuse”, National Conference of State Legislatures, http://www.ncsl.org/research/health/medicaid-fraud-and-abuse.aspx
“Medicare’s rising costs – and the urgent need for reform”, Heritage.org, http://www.heritage.org/research/reports/2013/03/medicares-rising-costsand-the-urgent-need-for-reform
“Growing bureaucracy and fraud in US healthcare, The Huffington Post, http://www.huffingtonpost.com/john-geyman/growing-bureaucracy-and-f_b_8750740.html
