Medicare Fraud and Waste

The fact is the Medicare is so massive, so complicated, and so bureaucratic while prevented from doing real management of the health care it pays for, that fraud and waste cannot be controlled. Only a major change and increased administrative efforts (and cost) has a chance of managing unnecessary spending.

Think about that when you consider Medicare for All.

Medicare covered over 58 million people in 2017 and has wide-ranging impact on the health-care sector and the overall U.S. economy. However, the billions of dollars in Medicare outlays as well as program complexity make it susceptible to improper payments, including fraud. Although there are no reliable estimates of fraud in Medicare, in fiscal year 2017 improper payments for Medicare were estimated at about $52 billion. Further, about $1.4 billion was returned to Medicare Trust Funds in fiscal year 2017 as a result of recoveries, fines, and asset forfeitures. Source: 2018: GAO Report

Your Medicare is in danger. Each year, roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Looked at another way, about $1,000 is lost per Medicare member through theft or waste each year. That is according to the federal government’s reckoning. But it could be far worse. Malcolm Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.

“The fact of the matter is, we don’t know how much is lost,” Sparrow says. “We ought to know. We shouldn’t have to guess. But the truth would be hard to swallow.”


  1. I know how much you like medical fraud. I also work for the same company you did. I recently had a hospital visit, and one of the bills I got ($1500.00) stated that since I didn’t have insurance, they would accept 40% if I paid promptly! I called the number, spoke to the gentleman, told him I did have insurance, and that I wasn’t happy that they would accept so much less if I didn’t have insurance! He then said to me, “just to be honest, if the customer complains that it is still too much, we would accept less”. I was boiling! Such a game, wonder why insurance is so expensive? I wanted to report that to my insurance company, but it’s just accepted as “that’s just how it is” .
    Crazy. Oh well, that’s my rant. Have a great day

    Sent from Mail for Windows 10



    1. Be assured that the $1500 was only that amount because they thought there was no insurance involved. The amount that would be paid by your coverage is much less, certainly no more than the 40% maybe less. The problem is payers all pay different amounts. Medicare, Medicaid, private, each insurance company.


  2. Everybody forgets that medical insurance fraud happens to other insurance companies and the VA. Things like unnecessary tests, identity thief for services, medical equipment, and compounding of drugs. Private insurance companies do not like to admitted how much is stolen from them because it is bad for business but every once in a while you hear about a big scam ring being busted on the news. When $3.5 trillion is spent on healthcare, scammers will get their cut. I just think that private insurance companies are more agile and flexible to catch scammers than any government agency which relies on Congress to fund new computers or personnel to catch fraud. There is a fine line on how much money to spend to prevent and catch fraud and can recover vs how much you will lose if you don’t investigate. Whatever that balancing point is, you can guarantee that the government will always be way behind that point. The current 2.6% recovery rate of fraud is just unacceptable and will only grow worse if every American is covered under M4A run by the government.


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