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  • Medicare’s Low Administrative Costs Cost You $60 Billion a Year

    Once left for dead,  it now appears likely that the health legislation Majority Leader Harry Reid (D-NV) will introduce sometime this week will include a government run health insurance program. One of the biggest reasons leftists support a government run plan is because they believe government run programs, like Medicare, have lower administrative costs than private plans. First of all, as the Washington Post’s Robert Samuelson notes today, that is simply not true: on a per person basis Medicare actually has higher administrative costs than the private sector.

    More importantly, the private sector does a much better job rooting out fraud and waste than the government does. Watch this 60 Minutes story from last night detailing how government run Medicare loses $60 billion in taxpayer in fraud every year:


    Watch CBS News Videos Online

    In the story, Steve Kroft asks convicted Medicare fraudster “Tony” about the extent of the government’s anti-fraud efforts:

    “Didn’t anybody in Medicare check to see if any of these charges were valid?” Kroft asked Tony.

    “Sometimes they’ll do it. But by the time they did it, it was too late,” Tony said. “We’ve already made $300,000, $400,000, $500,000 on it. And then we will never send ‘em nothing back. And then at 30 days they’ll send an inspector to your office. And by that time…it’s all closed down.”

    They would pay first and send an auditor later.

    Kroft then talks to FBI agent Brian Waterman:

    “There’s somethin’ I don’t understand. I mean, you’re saying essentially people just fill out the phony paperwork, they send a bill to Medicare and they pay it,” Kroft remarked to Brian Waterman.

    “That’s why you have companies that can run for 60, 90 days, and bill for ridiculous things. Because there are very few checks and balances to even determine whether these things a, were medically necessary, b, were ever given, or c, even physically possible for a patient with the kind of conditions they have,” Waterman explained.

    Kroft then talks to the bureaucrat in charge of stopping fraud, Kim Brandt, Medicare’s director of program integrity:

    “Look, I’m sure that you’re aware of these problems. But it doesn’t seem like you’re doing a very good job. I don’t mean you personally, but I mean, the government. This is still like a huge problem, and getting worse, right?” Kroft asked.

    “Well, it really does come down to the size and scope of the Medicare program, and the resources that are dedicated to oversight and anti fraud work. One of our biggest challenges has been that we have a program that pays out over a billion claims a year, over $430 billion, and our oversight budget has been extremely limited,” Brandt said.

    About that there is little dispute: Medicare has just three field inspectors in all of South Florida to check up on thousands of questionable medical equipment companies.

    Clearly more auditing needs to be done and it needs to be done in real time,” Attorney General Eric Holder said.

    In other words, Medicare needs to spend much much more on administrative costs if they are going to stop losing $60 billion in taxpayer money every year. And that is before President Obama signs legislation that will put 100 million more Americans into a government run plan.

    Posted in Obamacare [slideshow_deploy]

    11 Responses to Medicare’s Low Administrative Costs Cost You $60 Billion a Year

    1. Jim says:

      60 MINUTES STORY VERY BELIEVABLE, AND THEY WANT

      TO RUN HEALTHCARE…..GOD HELP US!!!!!!! WE

      DON'T EVEN KNOW WHO ALL OBAMA IS SENDING MONEY TO

      NOW, BUT I'D BET WE'D BE PO'D.

    2. Leon, Durango, CO says:

      Perhaps you have heard of the terrifying stories of people in Psychiatry being shocked into stupidity by Electro Convulsive Therapy. The doctors kicked the TV and sometimes that did something for the patient so they thought "Let's kick all their heads with electricity!" This really is junk science, but the 'good' doctors have been doing this for years. There are terrifying and horrible "Treatments" and "Therapies" not the least being CHEMO.

      It is nice to know there is more FRAUD in some of these crazy medical practices and we have the right not to be victimized by them, even when the government is going to pay for them. "We are going to wipe your brain clean of all those troubling thoughts. But don't worry, the government will pay for it!"

      Your private Health Savings Account coupled with a catastrophic Health Insurance Policy will be the cheapest way to go. Get the deductible ($10,000 for example) for the amount you have saved up. Watch these devils in government very carefully, be sure that our mandated coverage will contain something like this. And BE SURE THE GOVERNMENT DOESN'T HAVE THE RIGHT TO ENFORCE INSANE AND BARBAROUS "TREATMENTS" ON US.

    3. PoliticallyCorrect1, says:

      So, the Internet is buzzing about the recent airing of the 60 minutes show concerning Medicare. I must say that I was pretty shocked at what I was hearing. I didn’t quite understand the entire ordeal until I came across a clip on YouTube http://www.youtube.com/watch?v=5h4AmViGPh8. The Big Talker breaks down exactly what the government is doing, It’s such a shame!

    4. Maria, NC says:

      Wouldn't most fraud be easily solved with these two simple solutions?

      1) Social security # identified patient copays on EVERY charge (including hospital, lab, device, and other charges as well as charges on public plans), resulting in a third of a billion sets of knowledgeable eyes scrutinizing every line item (information that must be sent to the social security number's taxpayer address) plus

      2) Tax policy which encourages non-employment linked high deductible catastrophic plans with HSAs covering the deductible amount.

    5. Bobbie Jay says:

      Thank God it's been exposed. 95% is fraud, which means 95% of obama's claim that everyone wants his health care plan is FRAUD!

      Clearly, the government doesn't want to remove the corruption, THEY WANT TO INCREASE AND MANAGE MORE OF IT.

      Obama claims insurance industries over charge and don't live up to their obligation? Obviously, using what the government is and has been doing and to fabricate it as a private sector concern. But the government created they're own little program at tax payers expense, called "oversight." Instead of jumping in where they don't belong, government is NEGLECTING GOVERNMENT TAX PAID DUTY?

      The people don't need your corruption or your ethic to keep it going. We deserve HONESTY AND THE WHOLE TRUTH. NO GOVERNMENT INCOMPETENCE ANYWHERE IN OUR LIVES YET, IT'S EVERYWHERE.

      This country and the people need nothing from an illegitimate government of corruption and their exorbitant actions and expenses.

    6. Mike, Wichita Falls says:

      The $60 billion in Medicare fraud is almost as shocking as the fact that 60 Minutes did this story. Thank you, CBS.

      Oh that all of the MSM actually did the job of a truly free press as the founders envisioned…expose government waste, fraud and abuse.

      Unfortunately, I am numb to this number as Medicare is in the hole $36 trillion.

      I believe that if the people had known the truth of this and all other government excesses, which are legion, we would not be in this mess. Hopefully, there is still time to save the ship for our kids.

    7. Jeanne Stotler, Wood says:

      The hospitals I worked with did not use ECT, they used drugs instead, Medicare and Medicaid fraud are present and some get by for a while, thing is there is always someone out there to abuse a system, and there always will be. Insurance companies often turn down doctors who want to try some new drug because of cost, then we need to get Pharm. cos. to lower the cost. The Pharm. cos make big money and spend big money, they have huge expensive meetings, give huge bonuses and trips etc. I recently had a colonoscopy and the prep was turned down even when my doctor told them of underling conditions, the person doing this had no medical training, just read from a manuel. I have a History of Cancer in my family, when my surgeon ordered blood work to look for predisposition, it was turned down, I did win on appeal, this was very trying.A gov't run plan will lead to more abuse and fraud, which means more people checking, and most will not have medical training or background.

    8. Alex Adrianson Alex Adrianson, Wash says:

      For an in-depth discussion of how the private sector fights fraud better than Medicare and Medicaid, see “The Government’s Health Care Fraud Problem” (http://www.insideronline.org/archives/2009/summer/HealthCareFraud_Pg18-25.pdf) by Merrill Matthews and Meredith Matthews in the Summer 2009 issue of The Insider.

    9. Pingback: $60 Billion in Medicare Fraud | www.statehousecall.org

    10. Pingback: Grassroots in Nebraska: In the News: October 22-28, 2009 | Grassroots in Nebraska

    11. Claude Cornell says:

      This certainly shows that there is just as much crime on Main Street as there is on Wall Street.

      Almost as much as there is in Washington, that's where the biggest scammers are. The lie of the century is, "We are the U.S. Government and we have all the answers."

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