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Medicare Fudged Fraud Figures: Report

Claims to have cut bogus charges overstated

By Rob Quinn, Newser Staff

Posted Aug 21, 2008 8:50 AM CDT

(Newser) – Medicare's boasts of having reduced fraud by billions are misleading, a draft report obtained by the New York Times finds. Auditors were told to ignore procedures that would have accurately measured fraudulent claims for medical equipment, the draft report says. Proper methods would have revealed an estimated $2.8 billion in fraud in 2006, instead of the $700 million reported to Congress.

Auditors failed to compare sales invoices to doctors' records to make sure that medical equipment actually went to patients, the report from a federal inspector says—a method which would have revealed that a third of 2006's equipment spending was improper. Some lawmakers said the irregularities amounted to corruption and called for heads to roll, while a Medicare spokesman called the $2.8 billion figure "preposterous."

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Herb Kuhn, deputy administrator, Centers for Medicare and Medicaid Services (CSM) testifies on Capitol Hill in Washington, Wednesday, July 9, 2008, during a hearing looking into Medicare fraud. (AP Photo/Lawrence Jackson)

A report has found that failure to use accurate auditing methods means Medicare fraud has been greatly understated. (Shutter Stock)

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This is like letting the fox guard the henhouse. The supplier has an incentive to supply fabricated documents.
- Malcolm Sparrow, a Harvard professor who focuses on health care fraud.

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Medicare Fudged Fraud Figures: Report