There has been a great deal of talk in Washington about the enormous amount of money we spend on Medicare. The common theme in this talk is that the program spends too much money for no real benefit. According to Republicans there is a great deal of fraud in the system. The problem is however is that while they are completely correct that there is a great deal of fraud, it turns out that the fraud is actually coming from the business and medical communities, not from the masses of people who desperately need these programs. A single arrest this week by the United States Justice perfectly illustrates the extent of this problem. One businessman (and yes, until he was caught he was seen as a “businessman”, (just like Ken Lay and Bernie Madoff were), was found to have bilked Medicare out of tens of millions of dollars by setting up fake clinics and medical supply companies.
Companies like this buy stolen databases and set up clinics and medical supply companies that actually offer no services. When someone visits their businesses however they turn out to be empty. The companies actually provide no medical services or products. They use the stolen databases to bill the government for services never rendered. While the FBI says it is impossible to determine exactly how much operations like this cost the tax payer, the National Health Care Anti-Fraud Association (NHCAA) gives a conservative estimate of more than $60 billion a year and could be as high as $250 billion a year.
Interestingly enough, while the Justice Department has been aware of this problem for nearly 30 years, it was not until 2007 that an FBI “Task Force” was actually formed. The problem is however that the problem, because of neglect, has grown to such epic proportions and the tiny group of investigators is simply not large enough to investigate even a small percentage of the cases. When George Bush formed the Department of Homeland Security it took less than 12 months before this huge government police agency was fully operational and investigating and arresting American citizens at world class rates. The only lesson that can be learned from this is that when Republicans want to “solve” a problem using either the military or police that they can do it very quickly.
But it is not in the Republicans political interest to solve a problem it never seems to happen. The above statistics on fraud is available to every Republican in Congress. Yet when they are speaking there is not one single word about exactly who is committing the fraud. Investigations have revealed that not only are corrupt business persons engaging heavily in this, but that they would not be able to without the active participation of doctors and hospitals. The question is then, if the business community and medical community are mostly responsible for the fraud, then how does cutting benefits for everyone going to solve the problem.
One of the largest problems is the False Claims Act, 18 U.S.C. § 287. Under this Act the penalties are a mere $500,000 fine and 5 years in prison-maximum. One fake clinic bilked more than $20 million in one month and with resources like this it is unlikely that they will be sentenced to anything near the maximum sentence. A person who is caught with a tiny amount of crack cocaine however can face a sentence at least twice as long. Then when they are released and try to get their lives back together they are banned from getting things like scholarships and grants, or any other help from the government and in many cases they will be banned from even renting an apartment. When do we ask ourselves who does more damage to our nation, crack users or medicare cheats?