The Clarion-Ledger reported on Friday’s guilty verdict in federal court in Jackson of 54–year old Cassandra Faye Thomas. The Jackson doctor was accused of orchestrating a fraudulent scheme to defraud Medicare and Medicaid of $6.9 million. The doctor was convicted of bilking the system through unlawful claims for therapy services. The verdict brings attention to a massive problem that costs U.S. taxpayers billions of dollars every year.
Here is an 2009 overview of healthcare fraud by Sara Rosenbaum, Nancy Lopez and Scott Stifler of the George Washington University Medical Center. Some of the findings include:
- estimates of healthcare fraud range from over $68 to over $200 billion annually;
- 3–10% of healthcare spending is on fraudulent claims;
- 80% of healthcare fraud is committed by healthcare providers; and
- victims tend to be low income and elderly persons.
Entire businesses are set up to game the system. For instance, many nursing home operations reap huge profits from billing Medicare for therapy services during a nursing home resident’s first 100 days in a facility. In a crooked nursing home operation every Medicare resident will receive physical therapy, occupational therapy and speech therapy during their first 100 days in the facility—whether they need it or not. The nursing home bills Medicare for each of these services.
The same nursing homes stop providing therapy as the resident reaches their 100th day in the facility, since Medicaid does not pay for individual services and many residents go to Medicaid as their pay-source after 100 days. Some residents get therapy even though they don’t need it. That results in Medicare fraud.
Equally bad is these nursing homes’ system of not providing therapy to Medicaid residents. Many residents who would benefit from therapy do not receive it because they are not on Medicare and have no pay source other than Medicaid.
As the prosecution of Dr. Thomas shows, the federal government does what it can to stop healthcare fraud. But more needs to be done. This is particularly true since Medicare spending is projected to substantially increase in the coming years. Fraudulent claims are fat in the system that can and needs to be cut, saving taxpayers billions.