- 10 percent of Medicaid payments are lost to fraud or incompetence
- Medicaid expansion will likely exacerbate fraud in the program
- Taxpayers should be leery of promises by the government to be good stewards of tax-dollars
Medicaid has long been a program ripe for fraud. Since its inception in 1965, the national health insurance program for low-income Americans funded by a combination of federal and state funds has been highly susceptible to billing schemes and fraudulent kickbacks. Estimates claim that for every $100 spent on Medicaid, $10 is a result of improper payments or fraud.
A simple Google search of “Medicaid fraud” produces thousands of stories documenting popular scams to the taxpayer-funded program. Some “medical centers” exist for the sole purpose of billing Medicaid for patients never treated or seen in any fashion. The program is so ripe for fraud it’s often referred to as a “get rich quick scheme” because of the all too common news reports of physicians and medical professionals who nefariously bill the program and then live luxurious lifestyles with money paid for by taxpayers.
In one of the latest local instances of Medicaid fraud, on May 24 the U.S. Justice Department announced sentencing for a Durham man for defrauding the program of $4 million.
For a government over $22 trillion dollars in debt, and quickly sinking deeper because of entitlement spending, it seems like rooting out fraud would be a bigger priority. Unfortunately, reports note that even when the government investigates and successfully prosecutes the perpetrators, taxpayer funds are seldom recovered.
In 2017 alone, an estimated $36.7 billion in improper payments from Medicaid funds were made by the federal government. The entire budget of Homeland Security in 2017 was $42.4 billion. According to the Office of the Inspector General, only $1.8 billion of Medicaid fraud expenditures were recovered by March of 2018.
Part of the problem is that Medicaid is a joint spending venture between the states and federal government, with the federal government picking up roughly two-thirds of costs and states covering the remaining third. True ownership of the program tends to be murky, where states sometimes demand federal authorities do more and vice versa.
As North Carolina debates the expansion of Medicaid, fraud should be a growing concern to taxpayers. In the fiscal year 2018, North Carolina State Auditor Beth Wood said that the State Department of Health and Human Services paid $100 million for improper claims for the Medicaid program. Amazingly, in 2017 Louisiana spent $85 million on residents who weren’t even eligible for the program when the state expanded Medicaid.
When thinking about permanent expenditures for programs like Medicaid, taxpayers would do well to ask whether their money is being spent in the manner it is intended. Clearly, around 10 percent of the money is being spent to enrich scammers or just lost to government incompetence. All that fraud drives up the cost of healthcare for everyone and results in poorer medical care for those who need it most.
Expansion could easily add as many as 600,000 recipients to Medicaid alone in North Carolina, exacerbating a problem government has not fixed for decades. Even more reputable businesses like Walgreens have been overbilling for Medicaid. Attorney General Josh Stein recently announced that North Carolina will be receiving over $3 million in reimbursements from a $60 million national settlement from the retail chain. Stories like that merely reinforce just how widespread and susceptible the program is to abuse.
Despite promises from past political leaders to clean up Medicaid fraud, citizens should remain wary to expand a program that encourages the fleecing of dollars from hard-working taxpayers. Holding state and the federal government accountable is one of the hallmarks of our Republic. That we have failed to do so for so long when it comes to Medicaid is a significant blight on the government’s capacity to be stewards of the public purse in the quest to help the least fortunate in our midst.
