Medicaid Fraud Dragnet ls Missing the Point, States AAPS


Attorney General Jeff Sessions, who has been referred to as the top “Medicaid Fraud Dogg,” has announced  an “historic” roundup of 601 doctors, nurses, and other licensed medical professionals, in a $2 billion bust.

Fraud in Medicaid is indeed “stunning,” according to a report released by the Senate Homeland Security and Governmental Affairs Committee. “But $2 billion is much less than 1 percent of the $554 billion of taxpayer money taken in by Medicaid each year, up from $299 billion in FY 2014,” stated AAPS executive director Jane M. Orient, M.D. “Funds are diverted from the needy poor in many ways. Hundreds of thousands of ‘beneficiaries’ are ineligible or deceased. Managed-care monoliths are raking in billions in profits from Medicaid, while the poor lack decent care. States game the system to bring in more federal dollars; there is even a verb ‘to Medicaid.’”

Then there are huge kickbacks (“rebates”) that would be illegal in other industries but are permitted in “safe harbors” for Group Purchasing Organizations (GPOs) and Pharmacy Benefits Managers (PBMs). The resulting buyers’ monopoly may drain $200 billion from medical services according to some estimates, Dr. Orient pointed out.

There is nothing new in the attack on physicians who serve Medicare, Medicaid, and Tricare patients, Dr. Orient noted. It began in 1996 with provisions in the Health Insurance Portability and Accountability Act (HIPAA), which criminalized billing errors or providing “medically unnecessary services”—one of the crimes that General Sessions states he is pursuing.

The last “largest-ever federal health care fraud takedown” occurred in 2011. Then, as now, some of the accused were probably guilty of running egregious scams. “There is no excuse for intentionally defrauding the taxpayer,” stated Dr. Orient, “but many physicians have had their lives ruined because of inadvertent violations of complex billing rules while they were working very hard, caring for patients.”

“Physicians feel that they are not only being blamed, but hunted,” Dr. Orient said.

The criminalization of medical practice is not the answer, in the view of AAPS. In contrast, Kirk B. Johnson, General Counsel of the AMA, testifying before the Senate Judiciary Committee on May 25, 1994, stated: “The AMA does officially support junkyard dogs, but as long as they are FBI agents.”

“All physicians who accept payment from a government health program are at risk,” Dr. Orient stated. “But putting them in prison for decades won’t rescue Medicaid. The really huge swindle of the American taxpayer will go on.”

The Association of American Physicians and Surgeons (AAPS) is a national organization representing physicians in all specialties, founded in 1943.