Legislative Update: Medicare Fraud is Picking Our Pockets

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Legislative Update: Medicare Fraud is Picking Our Pockets

Ruby Peters recently wrote to TSCL, “I will net a 5 cents a month increase in my Social Security benefits in 2003 after the $4.70 deduction for the Medicare premium increase and an $8.25 increase in my supplemental insurance. How’s that for a raise?” TSCL has heard from scores of seniors whose benefits are losing the race with health care costs.

The news is not getting any better. A recent government report states that America’s healthcare spending increased more than three times faster than the growth in the economy in 2001—the fastest increase in 10 years. Prescription drug spending continued to grow faster than all other areas, 15.7% in 2001. Increases in hospital spending accounted for a whopping 30% of the increase in total spending.

In the past, cost increases of this size have been closely followed by government policy changes to put the brakes on health care spending. Indeed, President Bush has proposed sweeping long-term changes for Medicare to accompany a prescription drug benefit. TSCL is carefully monitoring proposals that may include higher costs to beneficiaries, including new co-payments and higher deductibles. TSCL believes, however, that savings will not be achieved until the government comes to better grips with Medicare fraud.

According to “The Wall Street Journal,” in 2001 Medicare’s new Inspector General, Janet Rehnquist, relaxed anti-fraud measures, outlining new criteria for Corporate Integrity Agreements (CIAs). These agreements are settlements made with the government, such as the $1.7 billion settlement with HCA, Inc. (see “Record Medicare Fraud Settlement Announced” at http://www.tscl.org/NewContent/101805.asp). Under these agreements, providers must promptly repay Medicare for overcharges. Rehnquist’s policy changes affected not only new settlements, but older ones as well. Some Members of Congress are concerned this could undermine the earlier agreements.

Overcharges to Medicare mean higher costs to beneficiaries. A relaxation of anti-fraud measures may be responsible for a significant portion of the recent Medicare premium increase of 8.7%. We urge you to contact your new Members of Congress and insist on zero tolerance for fraud. Money stolen from Medicare is money stolen from beneficiaries, the taxpayers, and puts the solvency of the program at high risk for the future.

Sources: “Report Details National Health Care Spending Increases In 2001,” Centers for Medicare & Medicaid Services, January 8, 2003. “Frequently Asked Questions Related to OIG Corporate Integrity Agreements,” Department of Health and Human Services, November 20, 2001.

April 2003