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It’s Time Medicare Clamps Down on Fraud

With access to the Medicare claims database to track Medicare expenditures, the Wall Street Journal (WSJ) reported, yesterday, as part of their Secrets of the System series on Medicare expenditures,  that the Norton hospital in Louisville, KY performed the third-most spinal fusions on Medicare patients in the country! The story was prompted by whistle blowers from Medronix, the manufacturer for hardware used in spinal fusions, who testified that Medtronix has paid “royalties” for using their hardware for spinal fusions. One surgeon at Norton Hospital has had royalty-bearing agreements with Medtronic, Inc. since 1996. The company paid him more than $27 million from 2001 to 2006, according to internal Medtronic documents reviewed by the Journal. On its website, the company discloses paying him another $13 million in royalties in the first three quarters of this year alone.

Although this is definitely a conflict of interest and may be illegal, I was more interested in the spinal fusion data the WSJ obtained from Medicare’s very own database. What I am curious about is why Medicare hasn’t prosecuted those surgeons who clearly are abusing the system?In fact, many of them are committing fraud. And, these are only the ones billing for unnecessary spinal fusions, what about all the other procedures, like the tens of thousands of unnecessary cardiac stents? Listen to this, from 2004 to 2008, Medicare paid Norton Hospital $48 million for the 2,475 spinal fusions it performed on Medicare patients. Like I said, above, this hospital in Louisville, KY ranks third in the country for spinal fusions. Lots of bad backs there! Must be from picking tobacco. Wouldn’t these numbers alone raise a red flag? Until now, it hasn’t.

Never mind the 100,000 deaths, unnecessary procedures adds about $700 billion to our healthcare costs annually. That’s one-third of our total healthcare costs!Yet, Medicare has to be pushed into action with the help from whistle blowers and articles like those in the WSJ. With these data, you don’t need FBI sting operations, you just need to identify the offenders and prosecute them. 

Another way the data could be useful to prevent fraud is to publish a list of individual physician billing practices. That way we can see how our doctors check out before signing any consent forms. However, Medicare is barred from doing this. The American Medical Association, the doctors’ trade group, successfully sued the government more than three decades ago to keep secret how much money individual physicians receive from Medicare. 

Thislack of transparency is pervasive throughout the healthcare system. I don’t know about you, but I don’t want to go to a doctor who performs countless of unnecessary operations so he can bilk tax payers for millions of dollars and receive “kick backs” from medical device companies. But, how do we find out who is honest? Well, all we can do right now is hope that investigative reporters such as those at the WSJ expose these crooks for who they are and embarrass Medicare into doing something about them. Also, we can ask our doctors about whether they receive kick backs from manufacturers before we give consent to any procedures. Listen, never mind bankrupting the system, but our lives are at stake whenever we go to these unscrupulous “practitioners”.

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4 Responses to “It’s Time Medicare Clamps Down on Fraud”

  1. American Medical Association December 29, 2010 at 8:16 pm #

    The American Medical Association has zero tolerance for health fraud, and we are working with the U.S. government to fight it. Fraud takes resources away from patient care, and the government, which has access to the full-range of Medicare data, is aggressively ferreting out fraud. The federal courts have found that publicly releasing personal physician payment data does not serve the public interest. Releasing physician information can have negative unintended consequences, including the theft of physicians’ personal identities. We support the release of information that will help physicians improve the care they provide, but the release of personal physician payment data does not meet that standard, and physicians, like all Americans, have the right to privacy and due process.

  2. Jeff Kreisberg December 30, 2010 at 11:02 am #

    I’m happy to hear the AMA is working with the government to fight fraud. It’s just that everything I read says the opposite. For example SB 2128 (background checks) and SB 2274 (payment fraud act)are strongly opposed by the AMA.

  3. American Medical Association January 4, 2011 at 4:25 pm #

    The vast majority of doctors have nothing to do with fraud. Innocent physicians should not be considered targets of suspicion by flawed attempts to stamp out Medicare fraud.

    Broadening the release of Medicare payment and claims data will increase the problem of physician identity theft and make it easier for criminals to defraud Medicare.

    That was amply demonstrated by the recent FBI crackdown against an L.A.-based Armenian-American crime gang in mid-October. The gang married stolen doctor information (birth dates, Social Security and Medicare-billing numbers) with legitimate beneficiary information (also stolen) to bill Medicare $163 million from 118 bogus clinics in 25 states.

  4. Jeff Kreisberg January 4, 2011 at 4:34 pm #

    I refer you to, http://m.healthcarefinancenews.com/news/michigan-doctor-convicted-183m-medicare-fraud-scheme. All you need is a few hundred like her and you’re talking serious bucks.

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