CNN reported last week on new allegations of Medicare fraud that some suggest might be one of the largest such cases ever. As blog readers know, Medicare and Medicaid fraud cases are quite common, stemming from situations where companies use illegal means to obtain more Medicare funds than allowable under the law. It is important to remember that these frauds are perpetrated against all of us, because taxpayers are the ones who foot the bill for these programs.
The main issue in this latest Medicare fraud case stems from wasted medicine. According to the story, two employees of the defendant-company (a doctor and nurse), had concerns about company policy regarding medication. Specifically, they were shocked that very expensive medicines were routinely thrown away. This is medicine that was paid for by the Medicare system and then never used.
The reason for the wasteful practice, say the whistleblowers, was simple: bill Medicare and Medicaid for more than necessary to increase profits. As much as $800 million may have been paid by taxpayers unnecessarily as a result. The company, DaVita, Inc. is one of the largest dialysis businesses in the country with nearly 2,000 clinics across the nation. More than ⅔ of the company’s revenue come directly from taxpayers in the form of Medicare and Medicaid payments for patients using those programs.
The allegations are that the company intentionally wasted medicine, for example, by giving patients small portions of three different doses of a drug, instead of the entire portion of a single dose. Therefore, instead of charging Medicare for one dose of the drug, they charged for three.
For their part, representatives for the company have denied the charges. They claim that the dosing decisions were made individually by doctors based on the specific needs of each individual patient. A similar suit was filed in Texas last year. The company settled that case for $55 million.
Many taxpayer watchdog groups will be watching this federal case closely. However, some explain how it is important to keep an eye on these groups, even after the lawsuit ends. One observer noted, “The way it’s set up right now, if the fraud is not caught, then taxpayers foot the bill. If the fraud is caught, stockholders foot the bill.” Afterwards, business continues as usual.
The Bigger Picture
It is easy to extrapolate too much from individual incidents. And at the end of the day this case is only about a single company’s actions. However, these sorts of incidents–which are far from uncommon–should be kept in mind anytime talk of rising medical costs and the need to eliminate the rights of patients in order to control those costs. We are still a long way from efficient care and proper care being provided all the time. The closer we get to that standard, the fewer medical errors and the more money will be saved overall.
Accountability remains a huge part of improving the system. That includes stepping up and demanding accountability in whistleblower lawsuits as well as holding individual professionals to task when they act negligently and cause harm.
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