Medical care is expensive. Insurance costs alone are a large part of many family and business budgets. State and federal government budgets are no exception, as virtually all budget shortfalls are connected in one way or another to extensive spending on programs like Medicare and Medicaid. Policymakers have long-been considering ways to cut those costs.
For example, in recent years there has been a crackdown on improper billing and fraudulent actions by providers of healthcare and support services. To combat the problem, lawmakers passed the False Claims Act. This law includes many different provisions aimed at minimizing Medicare and Medicaid payouts that are not necessary. According to some estimates, in the last three to four years alone, the U.S. Justice Department has been about to recover over $14 billion in funds that were paid out unnecessarily.
The vast majority of those reclaimed funds were received via one particular method allowed by the False Claims Act. The law includes qui tam provisions, which is essentially an incentive for whistleblowers to come forward and share information about fraudulent actions of which they may have personal knowledge. All told over $10 billion of the $14 billion total in recovery in recent years has stemmed from these whistleblower lawsuits by former employees of hospitals, nursing homes, and other facilities where fraudulent billing might take place.
Medicare Whistleblower Lawsuits
For example, just recently, information was released about a $700,000 settlement reached with a skilled nursing facility after allegations of unnecessary therapy services were revealed. Three former therapists allegedly filed the whistleblower lawsuit. The suit suggested that the facility billed Medicare for various services over a several year period that were not necessary. In particular, several dozen patients allegedly receive redundant or unnecessary therapies, including speech therapy, physical therapy, and occupational therapy. The government claimed that the care was not motivated by the best interests of the patient but instead by a desire to increase reimbursement billings.
The case was settled not long ago for $700,000. For their role in the case the three therapists each received $122,500 from the settled upon amount. Of course, the government understands that it is often impossible to fully police all billings. And so it is worth giving a portion (even a significant portion) of recovery to those who come forward as an incentive. Together, it still allows significant sums to be recovered for taxpayers and acts as a deterrent tool to nudge facilities into ensuring all of their billings are proper and in compliance with the law.
Efficient Use of Medical Funds to Limit Medical Errors
It is hard to underestimate the value of efficient medical care at all times. We often discuss the still common examples of medical malpractice. There are many different strategies that can be employed to lower rates of error, and sometimes those new approaches come with a cost. Many facilities claim that they cannot implement those efforts because of cost concerns. However, the more efficient our care becomes–like cutting back on unnecessary treatments–then the more funds can be directed toward other things, like patient safety programs.
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