Study: Government gets back more Medicare fraud money than Medicaid

Tuesday, June 3rd 2003, 12:00 am

By: News On 6

WASHINGTON (AP) -- The federal government recovers 20 times more money from prosecuting Medicare fraud cases than from prosecuting Medicaid cases, according to studies released Tuesday.

The studies, sponsored by the Washington-based Taxpayers Against Fraud Education Fund, found that the federal government got back $1 billion from prosecuting fraudulent Medicare claims in 2001, compared with $43 million from Medicaid providers.

The funding gap between Medicare and Medicaid appears to be linked, in part, to 39 states that have not adopted a local version of a tough federal statute that gives prosecutors broad authority to fight fraud. That law, the federal False Claims Act, also protects whistleblowers who report false claims for health care reimbursements.

Because Medicaid is a joint federal-state program, the False Claims Act cannot be applied to the state's share of fraud cases. Medicaid fraud is initially investigated by state authorities, said Associate U.S. Attorney Jim Sheehan, a health care fraud prosecutor for Pennsylvania's Eastern District, which is based in Philadelphia.

Pennsylvania is one of the 39 states that have yet to adopt a state false claims statute. The Legislature has considered such a law -- without success -- for several years, said James Moorman, president of the taxpayer group.

Sheehan said the tough federal statute was key in recovering Medicare fraud: "How do we get all these cases? Whistleblowers."

The writer of one of the studies, "Reducing Medicaid Fraud," had a similar insight.

"Where there is fraud in the health care system, it tends to be pretty sophisticated," said Andy Schneider, a health care consultant. Such fraud was "very hard ... to detect without a whistleblower."

The federal government spent $238 billion in Medicare claims in 2001, the latest data available. The government spent $129 billion to fund Medicaid that year.

Medicare provides federal health insurance to elderly people and others with certain qualifying disabilities and illnesses.

Medicaid is a health insurance program for certain low-income and needy people. The federal government and states jointly share its expenses. Medicaid covers about 40 million people nationwide.

Gregory Demske, a ranking official with the Office of Inspector General for the U.S. Health and Human Services, called the reports "very helpful." The federal government, he said, won or negotiated $1.8 billion in health care fraud cases in 2002.