Here is what “low administrative costs” and a claim policy that is pay and pursue get you. $1 billion in fraud not caught for fourteen years. If Medicare followed procedures common with private insurance companies, this would be very unlikely.
Patients and doctors hate pre-authorization and medical necessity scrutiny and it can be annoying, but this case is just one of way too many examples of what happens when you have a loose claim policy. Government oversight groups have been pointing this out for years and yet little has been done.
The New York Times
U.S. Says Florida Network Defrauded Medicare and Medicaid of Over $1 Billion
By ERIC LICHTBLAU
JULY 22, 2016
WASHINGTON — In the largest case of health care fraud ever brought by the Justice Department, federal prosecutors on Friday charged three people at a network of Florida nursing and assisted-living facilities for their suspected role in a scheme to defraud Medicare and Medicaid of more than $1 billion.
Prosecutors charged that Philip Esformes, 47, of Miami, who owns 30 nursing homes and assisted-living facilities in the area, created a fraudulent network built on billing Medicare for performing lucrative procedures that were not needed.
Over a period of 14 years, Mr. Esformes’s facilities would take in Medicare and Medicaid recipients who did not actually qualify for skilled nursing or assisted-living facilities, then bill the government programs for their care, prosecutors charged.