The Daily

Quality Fraud Drives Medical and Insurance Costs Up

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In 1999, HHS announced 371 criminal indictments for health care billing fraud, up 61% from the previous year[1]. DOJ convicted 396 Defendants for health care fraud, filed 2,278 civil matters relating to health care fraud and excluded 2,976 providers from billing Federal programs like Medicare and Medicaid as a result of fraud[2]. These cases included a $61 million settlement against a Florida company using shell corporations to disguise acquisition fees as “management fees” – effectively using Medicare money to fund its purchase of facilities. In another case, an anonymous University was secretly using an unlicensed drug on patients while billing Federal Grant funds illegally. In yet another case, a private doctor and his billing office were barred from Medicare and Medicaid after reaching a $15 Million fraud settlement.

On December 14, 2000 Columbia / HCA subsidiaries pled guilty to Medicare billing fraud and substantial criminal conduct, paying more than $840 Million in criminal and civil fines and penalties. In the continuing DOJ investigation of HCA, the following headline appeared on June 26, 2003.

“LARGEST HEALTH CARE FRAUD CASE IN US HISTORY SETTLED – HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION”[3]

Combined with the 2000 penalties were another $250 million for the ongoing fraudulent claims submitted by Columbia / HCA to the Federal Government, particularly to Medicare and Medicaid.

Florida Governor Rick Scott started Columbia in El Paso Texas in 1987. By 1997, Federal agents were already investigating the company for Medicare and Medicaid fraud.[4] Scott retired four months after the investigation was publicized in July 1997. In the end, Columbia admitted to fake tests billed, fake diagnosis codes billed and marketing ads billed as “community education” – all amounting to the staggering penalty of almost two billion dollars. It is rarely mentioned that this fraud took place within the first ten years of the company’s existence – all during Rick Scott’s tenure before resigning.

In 2010, Scott was interviewed by his hometown paper, the Naples Daily News, during his first run for Governor. This question and answer took place.

NDN: You’re campaigning on bringing choice and competition to health care. How do you do that?

Scott: As you know, I’ve spent a lot of my career in health care. Everything I ‘ve always done in health care – it’s how do we drive the cost of health care down? How do we improve patient satisfaction? How do we improve outcomes? A year and a half ago when President Obama got elected, I organized a group called Conservatives for Patients’ Rights. We’ve put out four pillars to have positive meaningful health care reform And they were right. The first is choice. You as an individual should have the right to choose the doctor and the insurance plan that you want. Same thing, we need competition, we need transparency, so you know what things cost as an individual. You should own your own health-care policy, and the way that will happen is if you get the same taxes your employer does, then you’ll start owning your own policy just like you own your own auto policy. And then, you should be rewarded for taking care of yourself. If you don’t smoke, you eat right, you exercise, your health care costs are clearly going to be lower, so your insurance ought to be lower. Those are the things we ought to be doing, and if we do that, health care costs will go down, and it will have a dramatic impact on the uninsured. We still need to make sure we have a safety net for those that can’t afford health care.[5]

In one quote, Florida’s Governor managed to misrepresent what he did at Columbia / HCA and also what he intended to do as Governor. After two terms as Governor, he has still not made health care more transparent. He refused the Medicaid expansion funds that would have covered children like Abby (See, the previous post at http://thethompsonlawfirm.net/child-left-behind/). The Governor blocked Amendment 7 from taking effect, hiding the costs associated with poor care from consumers. Governor Scott never encouraged competition. He stood by and applauded the government monopoly of health care in Lee County and blocked the implementation of Obamacare insurance markets designed to drive insurance prices down and help the uninsured obtain coverage. Like Abby, millions of Floridians have lost health care as a result of Governor Scott.

Quality fraud and deceptive market practices drive the cost of healthcare up. So far, Florida’s answer has been to take consumers rights away while constantly changing the healthcare delivery system, limiting funds and continuity of care for the most vulnerable.

 

[1] 1999 HHS/DOJ Health Care Fraud and Abuse Report

[2] Id.

[3] https://www.justice.gov/archive/opa/pr/2003/June/03_civ_386.htm

[4] Politifact, March 3, 2014, Rick Scott ‘Oversaw the Largest Medicare Fraud’ in US History

[5] Naples Daily News, August 19, 20110, Ryan Mills, Video Interview of Florida Governor Candidate Rick Scott