Stop Paying the Crooks: Solutions to End the Fraud That Threatens Your Healthcare.
Article Type: Book review
Subject: Books (Book reviews)
Author: Orient, Jane M.
Pub Date: 06/22/2011
Publication: Name: Journal of American Physicians and Surgeons Publisher: Association of American Physicians and Surgeons, Inc. Audience: Academic Format: Magazine/Journal Subject: Health care industry Copyright: COPYRIGHT 2011 Association of American Physicians and Surgeons, Inc. ISSN: 1543-4826
Issue: Date: Summer, 2011 Source Volume: 16 Source Issue: 2
Topic: NamedWork: Stop Paying the Crooks: Solutions to End the Fraud That Threatens Your Healthcare (Nonfiction work)
Persons: Reviewee: Frogue, James
Accession Number: 267810806
Full Text: Stop Paying the Crooks: Solutions to End the Fraud That Threatens Your Healthcare, by James Frogue, ed., softback, 209 pp, $19.95, ISBN 978-1 933966-04-5, Washington, D.C., CHT Press, 2009.

This collection of papers by health policy wonks, many of whom would be familiar to readers of this journal, is published by the Center for Health Transformation, founded by Newt Gingrich, who wrote the foreword.

Editor James Frogue is the Center of Health Transformation's chief liaison to state policy projects. He was director of the Health and Human Services task force at the American Legislative Exchange Council for three years, and also worked with the Heritage Foundation. The book is highly praised by Sen. Tom Coburn, M.D., Rep. Michael Burgess, M.D., and Rep. Paul Ryan.

The short summary of the book is that there is an incredible amount of fraud, and the solution involves more health information technology (no surprise from Newt Gingrich's center), more enforcement, and more compliance plans.

Escalating from the earlier estimate of a 10 percent loss to fraud, bandied around for many years by the Center for Medicare and Medicaid Services, Sen. Coburn asserts that as much as 20 percent is lost to fraud in Medicare and Medicaid, while 25 to 30 percent might go to waste.

"Waste, fraud, and abuse" are often conflated, and is not clear whether Sen. Coburn is making a distinction. This book gives no basis for determining any of the percentages, or any means for distinguishing fraud from waste or abuse. The highest estimate Gingrich quotes is from James Mehmet, former chief state investigator of Medicaid fraud and abuse for New York City. He believed that 10 percent of Medicaid spending was "flat-out fraud," and another 20-30 percent was unnecessary spending, meaning that up to 40 percent of all claims were questionable.

One reason for this appalling situation is lack of data integrity, according to a very long chapter by Tom McGraw, Ingenix senior vice-president for government solutions. Yes, this is the same Ingenix that was the subject of $300 million settlement in a class-action suit brought by out-of-network providers for United HealthCare. High-quality data is key, McGraw writes. He states that linkages and cross analysis with vital records could help prevent payment of Medicaid benefits to people who have been dead for years. McGraw doesn't seem to notice any difficulties with having the government prescribe standards for interoperable health information technology for physicians, when government's own Medicaid system can't communicate with its vital records system.

Problems with data management dictate the need for the Provider Enrollment Chain and Ownership System (PECOS), according to the paper by Mark Birdwhistell, who has worked at the Medicaid program for 25 years.

It is acknowledged by Chris Kryder and Barry Johnson of the Verisk health data analytics firm that the rules are complex, time-consuming, and overhead-wasting. No one seems to have noticed that the very complexity of the rules favors enterprises that are devoted to electronic claims filing for fraudulent purposes, whereas most of the enforcement efforts are directed toward trapping individual physicians who do not manage to be in 100 percent compliance. In fact, nowhere in the book is there any acknowledgment of the abusive prosecutions of private physicians while Medicare carriers seem to get a free pass. The book seems to advocate ever more sophisticated data mining methods, rather than the rather simple one of looking at large numbers of digits to the left of the decimal point, or huge numbers of checks being written to the same entity.

To stop paying the crooks ought to be a fairly obvious solution. We should also stop paying the parasites who take advantage of the complexity of the system. But all of the authors seem to take for granted that we will continue with the same structure that they admit caused the problem in the first place: third-party payment.

AAPS has long advocated the simple expedient of outlawing the assignment of benefits. If all checks go to the beneficiaries, then there is no profit in billing for fictitious or dead beneficiaries, since the "provider" (or actually non-provider) would not be getting the money. If the beneficiary had to pay a portion of the cost, or even had to pay upfront the total cost and wait for reimbursement, then it is certain that many fewer unnecessary services would be obtained. It is puzzling why some experts who give at least lip service to the concept of consumer-directed healthcare do not see involvement of patients as essential for stopping fraud. Could this be because so many enterprises, aside from outright crooks, have a vested interested in skimming off a lot of the money that flows through the third-party payment system, without directly contributing anything to the healing of the sick?

While missing the main point on the solution to the problem, the book has a lot of references and considerable useful information. Unfortunately, the lack of an index seriously limits its usefulness as a reference. I will probably keep the book on my shelf because of information in the appendices. Appendix D is a chart of Medicaid spending per enrollee in 2006, by state. The range was from about $5,000 per enrollee in Alabama to more than $11,000 in New Jersey. There is also a list in Appendix A of state schemes for gaming the federal match. It appears that government itself may be the worst crook of all.

Jane M. Orient, M.D.

Tucson, Ariz.
Gale Copyright: Copyright 2011 Gale, Cengage Learning. All rights reserved.