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Judicial Watch • Audit Reveals Medicare Fraud Cover-Up

Audit Reveals Medicare Fraud Cover-Up

Audit Reveals Medicare Fraud Cover-Up

AUGUST 22, 2008

After lying to Congress about drastically curbing fraud, waste and abuse, officials running one of the federal government’s biggest and costliest programs pressured auditors to ignore the ongoing crisis that has for years cost U.S. taxpayers billions of dollars.

A soon-to-be-released inspector general’s audit of Medicare reveals that officials operating the problem-plagued health insurance program rigged a 2006 assessment of waste and directed outside auditors to ignore government policies that would have accurately measured fraud as required by law.

For instance, auditors were ordered not to compare invoices from salespeople against doctors’ records, as required by law, to assure that medical equipment went to actual patients. As a result, Medicare concealed that more than one-third of spending for medical equipment in fiscal year 2006 was improper.

A draft of the scathing audit—prepared by the U.S. Department of Health and Human Services’ Office of Inspector General—was obtained by a national newspaper, which reported that Medicare officials told Congress they had reduced the cost of fraud in medical equipment reimbursements to $700 million in 2006 when in fact the actual loss was nearly $3 billion.

Corruption has long infested the massive $466 billion program that provides health insurance to around 44 million Americans, mainly elderly but also those deemed disabled by the government or infected with AIDS. Fraud is especially bad in the outpatient care provided in urban areas.

South Florida leads the nation as the capital of Medicare fraud, with an annual loss of at least $2.5 billion. A local newspaper recently published a multiple-part series documenting the rampant corruption in two regional healthcare fields; medical equipment suppliers and drug-infusion clinics for AIDS patients. The series points out how Medicare officials have ignored the crisis for years.

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