Increase In Medicare, Medicaid Managed Care Plans Has Led To 'More Complex' Health Care Fraud, Wall Street Journal Reports

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Medical Malpractice / Litigation;  Public Health;  Primary Care / General Practice
Article Date: 20 Mar 2008 - 10:00 PDT

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The Wall Street Journal on Wednesday examined how as the private sector is increasingly providing more Medicare and Medicaid services, new types of fraud are "cropping up that are harder to spot, more complicated to prosecute and potentially more harmful to patients," prompting the federal government to increase scrutiny of managed care.

States and the federal government began shifting Medicaid and Medicare beneficiaries to managed care plans in the 1990s to control program costs, and many believed the shift also would reduce fraud because "companies would have strong incentives to prevent overbilling by doctors, hospitals and other medical providers -- and to avoid cheating the government themselves," the Journal reports. However, some states reduced the number of health care fraud investigators, and a recent federal review of health programs for low-income children found that states mostly rely on HMOs to regulate themselves.

The Journal reports that traditional fraud prevention for government programs consisted of "policing doctors, hospitals, dialysis centers and the like to catch overcharges or billing for treatment never provided." However, according to the Journal, "[m]anaged care fraudsters profit by ... shortchanging patients or physicians to cut costs while collecting preset fees from the government," as well as by "refus[ing] to enroll unhealthy people, skimp[ing] on paying doctors or deny[ing] patients care." Regulators say "they are realizing they must become more attuned to more-complex scams carried out by sophisticated corporations," the Journal reports.

The Journal also profiled several fraud cases in Pennsylvania, California, New York, Texas and Virginia that "have provided a wakeup call for regulators" and "illustrate the potential for fraud and authorities' growing understanding of its scope" (Francis, Wall Street Journal, 3/19).

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