Have you ever gotten a call or an e-mail from a credit-card company asking if a recent charge on your account was legitimate? Credit-card companies are on the hook for fraudulent charges for amounts over $50, even if the customer doesn’t report the fraud. So it is in their powerful self-interest to spot phony charges quickly. That’s why they have programmed computers to alert the company to charges that are out of pattern. Say your American Express bill usually runs between $400 and $600 a month, with the usual bump at Christmas time. Suddenly there is a spate of charges for expensive clothes, electronic equipment, airplane trips, etc. You can bet you’ll be getting a jingle from Amex to make sure things are on the up and up.
If they are not, they cancel the card, send you one with a different account number, and try their best to track down the bad guys.
Such obvious precautions, it seems, are beyond the capacity of Medicare, which pays out half a trillion dollars a year to medical-service providers. At least $60 billion — one dollar in eight — of that is paid out for claims that are not legitimate. CBS’s 60 Minutes, not exactly a member of the vast right-wing conspiracy, ran a story on it last Sunday that you can find here (h/t Instapundit). The reporter, Steve Kroft, warns that the report will raise your blood pressure. That it certainly will.
As the report shows, Medicare fraud is ridiculously easy to carry off, little effort is put into preventing it, and few resources are committed to catching suspected attempts at it. All you need is a physical address, a list of Medicare recipients (available on the black market for about $10 a name), and a list of Medicare billing codes. Medicare is required by law to pay these claims within 30 days. Every few months you shut down the ABC Medical Supply Company and open up the DEF Medical Supply Company at a different address. Medicare direct deposits the money you bill them right into your bank account — none of those annoying $100 bills to launder — and you don’t have to worry about being gunned down in a parking lot by a rival criminal. No wonder the FBI thinks it is now a larger criminal enterprise in South Florida — where the report was filmed — than cocaine-trafficking.
How bad is it? One woman interviewed says that she has been reporting an endless stream of false charges on her Medicare statement for six years. Medicare keeps saying they’ll look into it, and the phony charges just keep coming and just keep being paid. A retired federal judge who has his God-given arms, reports that Medicare was billed for two artificial ones for him at the same time. Medicare paid the bill without question, despite the fact that losing two arms simultaneously is, to put it mildly, a rare medical event.
And this is the model for ObamaCare. The mind boggles.