While some Medicaid fraud does take place within the user community, the majority is committed by Medicaid providers like hospitals, nursing homes, doctors, dentists and pharmacies. From bills for services not actually rendered, to billing a second time for the same medicine, Medicaid fraud has reached epidemic proportions. Health care experts have estimated that fraud totals upwards of $30 billion per year, or about 10 percent of the program's cost.
History
Medicaid became law in the U.S. on July 30, 1965 when president Lyndon Johnson signed the bill, seated next to former president Truman, who first proposed the measure a quarter century earlier. Virtually each year since it's signing, Medicaid has undergone some significant improvement, including ways to deal with the growing instances of fraud.
Size
Medicaid began serving low-income families from the very start. And in 2007, almost 50 million people received treatment for various illnesses. The Medicaid program is administered by the states; and in each of them, fraud has become a major problem. For instance, of New York State's budget of $116 billion, $50 billion is spent on the program. As much as $18 billion of that amount is fraudulently claimed.
Features
Besides the two examples given in the overview, fraudulent claims take other forms. For instance, Medicaid can be billed for more costly services than actually were performed. Then there are doctors who are performing unnecessary procedures and billing Medicaid for them. Or they are billing for separate services that should have been combined into one. Pharmacists are committing fraud when they bill Medicaid for branded drugs when they actually dispensed generics.
Considerations
The biggest losers are users of Medicaid services because the states will have to either raise taxes or reduce services to deal with the mounting problem of fraud. For that reason, many prosecutions for fraud begin with information from users. For example, they might inform Medicaid of treatments or procedures they believe are unnecessary. Or when they are offered so-called free services in exchange for their Medicaid number. And those who visit with a patient in a nursing home whose bill is being covered by the program may report that he is not getting the level of care provided by the program.
Potential
The cost of health care in the U.S. is growing far faster than inflation, and is quickly becoming out of reach for many Americans who are spending close to 20 percent of their incomes on it. Contributing to that is the fraud existing in the Medicaid program that has to be covered by honest citizens through higher taxes and health care premiums. If fraud continues, the average citizen will continue receiving fewer services due to higher costs.
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