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Medicare Fraud At $13.5 Billion Millions Paid For People Who Were Dead The patients died, the bills kept coming, and Medicare kept paying. Auditors found that in 1999 Medicare paid $4.2 million to Health Maintenance Organizations (HMOs) for patients who were dead. That figure is an improvement over 1997 in which Medicare paid an estimated $20.6 million. Medicare pays HMOs a monthly fee for each beneficiary enrolled. The fees are supposed to stop following the month in which someone dies. Medicare does not always find out about the deaths or stop payments in a timely manner. As a result, the program paid HMOs $3.1 million through April 1999 for 102 beneficiaries who died prior to February 1994. In a follow-up check auditors found that as recently as September 1999, Medicare was still paying HMOs for some patients who died after February 1998. Those payments amounted to another $1.1 million. A Chicago bank found a creative way to make $12.5 million handling Medicare money. In 1999, it was discovered that Highland Community Bank, one of 20 banks across the country that act as intermediaries between the government and contractors who process Medicare bills, was withdrawing Medicare money a day earlier than necessary. The bank was able to earn $12.5 million in interest on the money by lending it out to other banks overnight. When ordered to stop, the bank’s officers complied saying they “believed that withdrawing the funds a day early was a ‘perk’ of maintaining Medicare accounts.” The government is seeking return of interest that would otherwise have accrued to Medicare’s Trust Fund. Documentation errors—when there’s little or no paperwork to determine whether services billed were actually performed—more than doubled. One of the most troubling findings in the 1999 audit was $5.5 billion in losses caused by documentation errors. In 1998, those losses were less than half that amount, $2.1 billion. Medicare’s losses to money wasted through fraud, mistakes, and abuse of the system were $13.5 billion in 1999 after falling for the past three years. In 1998, Medicare lost about $12.6 billion. Nancy-Ann Min DeParle, administrator of the Health Care Financing Administration which runs Medicare, said the 1999 losses are not statistically significant or worse than 1998’s because they are based on randomly selected claims that may have had a higher dollar value in 1999. Source: “Medicare Fraud At $13.5 Billion,” Karen Gullo, The Associated Press, March 10, 2000. “Report: HMOs Paid For Dead Patients,” The Associated Press, March 2, 2000. “Chicago Bank Profited From Medicare,” Alice Ann Love, The Associated Press, March 15, 2000.
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