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Around the country, a never-ending stream of Medicare and Medicaid rip-off stories suggest many people now use these programs as personal tills. In July 2010, authorities exposed and shut down a more organized scheme, charging 94 conspirators from five cities who had stolen $251 million from Medicare.

Three months later, in October 2010, 52 members of an Armenian American organized-crime ring were arrested and charged with $163 million in fraudulent billing.

Scores of reports over the last decade catalog completely implausible Medicare and Medicaid claims paid, apparently without a hiccup, for patients who were dead, imprisoned or previously deported from the country and forbidden to return. A significant number of claims involved prescribing physicians who were long-since dead.

What makes these healthcare programs so vulnerable to fake billings and at such a scale? It's not so much the healthcare policy itself, nor the program design; the vulnerability stems from the payment mechanism the government has chosen to use. Most Medicare and Medicaid funds are paid out electronically and automatically, in response to electronic claims received from a vast spectrum of providers. Most claims are adjudicated by computers using rule-based systems, with no human intervention at all.

Fraud perpetrators have only to learn the rules; then they can submit thousands of claims electronically and with relative impunity. If they get things wrong, they'll receive helpful computer-generated messages explaining their mistake. Those committing fraud find it easy to get paid for fabricated claims because the government's systems check for billing correctness but not for truthfulness. The simple rule for getting rich quick through healthcare fraud is "bill your lies correctly."

This problem is not restricted to healthcare. Federal and state agencies increasingly disburse funds through such "electronic signal in, electronic payment out" (ESI-EPO for short) systems. The economic stimulus package, for example, included 56 tax provisions projected to cost $288 billion. Ten of these have already been designated high risk because of the likelihood of fraud made easier with electronic processing. Submit a qualifying tax return electronically, and if it has been completed correctly, out will come an electronic payment with no human intervention and little or no validation of the supporting evidence.

Payments for the stimulus fund's first-time home-buyer credit were found to have included $9 million to 1,300 prisoners, 241 of whom were serving life sentences when they purportedly bought homes. More than 10,000 taxpayers received credits for homes also claimed by other taxpayers, and one home was claimed by 67 claimants. The home-buyer program paid out more than $23 billion in total, and claims sampled after the fact showed dead people and young children showing up as "home buyers," in patterns eerily reminiscent of healthcare fraud.

kalm wrote:Yep, you cant trust the government to accurately account for anything. BTW, the largest Medicare fraud penalty in history was paid by the current governor of Florida.

Z, never run for office. You're not nearly crooked enough.

AZGrizFan wrote:

kalm wrote:Yep, you cant trust the government to accurately account for anything. BTW, the largest Medicare fraud penalty in history was paid by the current governor of Florida.

Z, never run for office. You're not nearly crooked enough.

Oh, that I know. But for every right they break, there's probably 50 doing the exact same thing 24/7 on these computerized systems....raping and pillaging and laughing all the way to the bank.

kalm wrote:

AZGrizFan wrote:
Oh, that I know. But for every right they break, there's probably 50 doing the exact same thing 24/7 on these computerized systems....raping and pillaging and laughing all the way to the bank.

Agreed, which drags me closer and closer to libertarianism.

BDKJMU wrote:Well, if this electronic billing is enabling billions in fraud every year, why not just eliminate electronic billing?

D1B wrote:

BDKJMU wrote:Well, if this electronic billing is enabling billions in fraud every year, why not just eliminate electronic billing?

Lazy, piece of shit, white collar criminals make welfare moms and bums look like saints. Focus on the true criminals, dumbfuck.

DJH wrote:

D1B wrote:
Lazy, piece of shit, white collar criminals make welfare moms and bums look like saints. Focus on the true criminals, dumbfuck.

Yeah, don't focus on the actual problem. Just blame someone else.

D1B wrote:

DJH wrote:
Yeah, don't focus on the actual problem. Just blame someone else.

Where's your hatred for HMO's and Doc fucking us over and stealing our tax dollars?

You dork.

AZGrizFan wrote:

D1B wrote:
Where's your hatred for HMO's and Doc fucking us over and stealing our tax dollars?

You dork.

Easy, killer. One criminal at a time.

Cap'n Cat wrote:

AZGrizFan wrote:
Easy, killer. One criminal at a time.

You know, if you really think about it, it's all the black's fault.

AZGrizFan wrote:

Cap'n Cat wrote:

You know, if you really think about it, it's all the black's fault.

Which black?

Grizalltheway wrote:

AZGrizFan wrote:
Which black?

89Hen.