Congressman Peter Roskam

Representing the 6th District of Illinois

We Must Put An End To Medicare Fraud

Nov 7, 2011
Opinion Piece

November 10, 2011

America's elderly are victims of a crime spree so expansive that on an annual basis exceeds the value of all the cocaine smuggled in to North America. The crime is Medicare fraud, and it is conservatively considered to be a $50 billion industry.  

While the federal government intercepts almost 40% of cocaine shipments to the United States, it stands virtually idle in apprehending Medicare fraudsters, recovering just $2.5 billion in fraudulent transactions and improper payments in 2009. Originating disproportionately from the Miami area, according to the FBI in September, “South Florida remains ground zero for healthcare fraud.” The unfortunate reality is that Medicare not only needs significant fiscal reforms to be around for future generations – like through the House Republican Budget: The Path to Prosperity – but its mechanics are also in dire need of substantive reform. 

Fortunately, the solution to this crime problem is not to create another "taskforce” or “war on" anything; in part it takes adapting the proven fraud prevention mechanisms of the credit card industry – an industry suffering just .044 percent fraud out of $17 trillion in annual transactions.

This is not a failure of our law enforcement community. It is the product of Medicare’s broken “pay-and-chase” system for reimbursing claims. Medicare does not effectively guard against fraud on the front end -- cutting checks without thorough fraud-check measures so law enforcement officials must pursue fraudulent claims after reimbursement. It is the equivalent of a retail store processing a customer's credit card approval long after the clothes have left the store. It’s nonsensical.

At a time when the federal government is borrowing 40 cents on every dollar, it’s hard to overstate the need for a reform solution. 

The solution introduced in the House today – which already has broad bipartisan bicameral support – would put in place preventative fraud-check measures to strengthen Medicare, saving taxpayers billions. Medicare would utilize cutting-edge technology to better identify and prevent fraud on the front end – similar to the credit card industry’s system of reviewing data in real-time at the point of sale – and phase out the current “pay and chase” system. It would also aid states in identifying and preventing Medicaid overpayments and improve fraud-data sharing across agencies and programs. Finally, it would help doctors by curbing Medicare’s pernicious physician identify theft issues.

Just like healthcare costs can be lowered long-term by encouraging and incentivizing preventative medicine and good patient health, Medicare would save similar from competent and worthwhile preventative policies, costing mere pennies on the dollar of what would be saved.

As the Super Committee looks for serious solutions to save taxpayer money and bring down our $14 trillion debt, they should take an earnest look at this solution – both saving taxpayer money and strengthening Medicare. 

We’re at a crossroads in this country. We borrow, spend and tax too much, and our federal government is painfully inefficient. Stopping Medicare fraud won’t be the cure-all of our country’s fiscal woes, but it would be a commonsense bipartisan solution to save taxpayers billions and help strengthen Medicare.