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Congress Hears That Bilking Medicare Out of Millions Is “Incredibly Easy”
Monday, March 7th, 2011
In a report that was prepared for the House Ways and Means Subcommittee on Oversight, one of the three congressional committees that held hearings last week to discuss healthcare fraud, it was reported that nearly 10% of all Medicare payments are fraudulent. These fraudulent claims and other improper payments caused the federal government to lose $48 billion in 2010. That estimate only includes Medicare fee-for-service and Medicare Advantage plans — not Medicare’s Part D drug benefit, or any other government health insurance program such as Medicaid.
During its hearing on Wednesday, the oversight committee heard a much higher estimate from Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association, who estimated that monetary losses from healthcare fraud range from $75 billion to $250 billion annually. Saccoccio’s estimate included fraud in the private insurance market as well; he noted that those who take money from the government pull the same scams on private insurers.
Also at the hearing, a convicted felon told lawmakers that Medicare fraud is not only a crime that pays and pays, but is also a crime that is “incredibly easy” to implement and commit. According to Aghaegbune “Ike” Odelugo, who was convicted in April and is cooperating with authorities while he is awaiting sentencing, it took him less than a month to put his scheme into practice, eventually swindling Medicare out of nearly $10 million over a three year period.
Although some fraudulent schemes can be very complex, many schemes, such as Odelugo’s medical equipment scam, are very simple to put into action. Odelugo testified that “the primary skill required to do it successfully is knowledge of basic data entry on a computer.”
In his case, Odelugo dealt with fourteen different providers of durable medical equipment, or DME, which includes wheelchairs, power scooters, and knee braces. “Marketers” would provide names of patients who supposedly needed DME and physicians would write phony prescriptions for the medical equipment. Odelugo said DME providers often “maintain an appearance of legitimacy” by filing real claims, but he estimated that those legitimate claims constituted only about 40% of all billings.
Odelugo said that high reimbursement rates make this area a particularly attractive area for those seeking to scam the system. He also offered lawmakers various ideas on how to reduce the number of fraudulent claims in the Medicare system.
Tags: fraud, Medicaid, medicare, medicare fraud, Odelugo
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