| In August 2009, the American Medical Association | | | | Justice and Health and Human Services have |
| reported that a study conducted at the George | | | | formed a joint fraud prevention and enforcement |
| Washington University Medical Center reveals that | | | | committee to pursue and root out healthcare |
| nearly 10 percent of all healthcare costs | | | | fraud. |
| estimated to be $2.3 trillion in 2007 -- are | | | | President Obama also recently signed new law |
| fraudulent. The problem was called systemic and | | | | amendments that broaden the government's |
| found to affect both private and public insurers | | | | ability to leverage the False Claims Act to |
| who service individuals, employers group policies | | | | prosecute healthcare fraud. In addition, the Obama |
| and public aid programs. | | | | administration's proposed budget for 2010 includes |
| The most common fraud practices that drive up | | | | the allocation of $311 million -- a 50 percent |
| healthcare costs are false billing, referral | | | | increase over the previous year to beef up |
| kickbacks, wrongfully coded services, and bundling | | | | Medicare and Medicaid healthcare fraud prevention |
| of services not delivered. The report attributes 80 | | | | efforts. It is estimated that reducing healthcare |
| percent of the healthcare billing fraud to health | | | | fraud in these public programs will save the |
| care entities, 10 percent to consumers, and the | | | | government $2.7 billion in healthcare spending over |
| remainder to a mix of insurers and their | | | | five years. |
| employees. | | | | Obama's proposed fiscal 2010 budget also calls for |
| The incidence of healthcare fraud in the private | | | | infusing an additional $311 million -- a 50% increase |
| sector is less widely known and recognized by the | | | | over 2009 funding -- to strengthen Medicare and |
| public than that which occurs in the Medicare and | | | | Medicaid fraud-fighting programs. The government |
| Medicaid programs because the government is | | | | reports that working with law enforcement |
| obligated to publish this information. | | | | officials to prosecute healthcare fraud recovered |
| One flagrant example of healthcare fraud detailed | | | | $1.1 billion in 2008. |
| in the report were allegations that one large | | | | Some of the initiatives the Justice Department is |
| insurance company manipulated its billing practices | | | | taking to reduce healthcare fraud include: |
| for out-of-network physician reimbursement to | | | | Specialized training in technology for investigators. |
| drive up healthcare costs by up to 28 percent. | | | | Careful data analysis of Centers for Medicare and |
| The report also uncovered large financial | | | | Medicaid Services. |
| settlements made by several pharmaceutical | | | | Delivery of training and resources to health care |
| companies and hospital systems for fraudulent | | | | entities to enable better detection and prevention |
| billing of the Medicare and Medicaid programs. | | | | of fraud and billing errors. |
| The federal government is taking steps to stem | | | | Stronger supervision of Medicare Advantage and |
| systemic fraud in healthcare. The Departments of | | | | prescription medication plans. |