An Epidemic of Fraud

Last year in California, an ophthalmologist was convicted of bilking Medicare out of more than a million dollars for phony eye surgery. The surgery he billed for doesn't even exist. It was just a name he made up for the insurance form. It's an example of a growing problem that is driving medical costs sky-high: medical insurance fraud. Insurance fraud is one of the easiest crimes to commit. The only tools you need are a pen and a claim form. A recent issue of the Journal of the American Medical Association tells about an Illinois psychiatrist who billed Medicaid for nearly 5000 hours of work one year. If that were true, he would have worked 13 hours every single day of the year. The Journal also tells about a physician who took an African-safari vacation, and then presented Medicaid with a bill for $3000 for the same period. Another doctor billed for abortions on women who weren't pregnant. And there are dentists who've charged for extracting more teeth than a person has in his head. The most common form of insurance abuse is padding claims. The Journal tells of a gynecologist who paid an independent laboratory to do Pap smears, billed Medicaid for more than he actually paid, and pocketed the difference. Another tactic is to mark up fees. At one psychiatric hospital, Fred Flintstone vitamins were billed at $3.60 a pill. At a drug store, you can buy them for 13 cents. Advil was billed at over $4 a pill. At a drug store, they cost only 11 cents. Some of the biggest rip-offs have to do with medical equipment. Phony salesman contact Medicare recipients and offer them equipment at vastly inflated prices. In one scheme, a foam pad to prevent bedsores that normally costs about $30 was sold for over $1000. Last year, a New York company was convicted for submitting phony Medicare claims for nearly $4 million in medical equipment. We're hearing a lot these days about the rising cost of health insurance, and politicians are waxing eloquent over what the government should do. Well, here's one simple remedy: Go after people who commit insurance fraud. Keep in mind that most physicians earn 2 to 4 hundred thousand dollars a year. When a poor man steals to feed his family, we can at least understand why he does it. But when a doctor steals from an insurance company, there's simply no excuse. It's flat-out greed and dishonesty. Remember the saying, Physician heal thyself. It's time for physicians to heal their own profession of the deceit and fraud that has crept into it. Insurance companies, too, need to work harder to uncover and prosecute insurance fraud. It's said that crime doesn't pay. But we could restate that even more strongly: Crime costs. It can extract a terrible cost from its victims. When well-heeled physicians cheat insurance companies, it's people with low and moderate incomes who are the victims--who pay the cost in terms of higher insurance premiums. Politicians are talking today about creating huge new programs like national health care to help the poor. But they're ignoring a solution that's right under their noses. The cost of health care could be brought lower by simply using the laws already on the books.


Chuck Colson


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