6 ms·

$2.7B in made-up claims, divided by 200 accused individuals, gives us an average of $13.5M per alleged criminal. That's not peanuts!

by cs702 2y ago

kurthr 2y ago
"In the Arizona case, prosecutors have accused two owners of wound care companies of accepting more than $330 million in kickbacks as part of a scheme to fraudulently bill Medicare for amniotic wound grafts, which are dressings to help heal wounds." Total fraud in that case was $900 million, for a only 500 patients, or almost $2M per patient.
- Spooky23 2y ago
  Wound care is bullshit when it’s not fraud. My dad was getting billed $12,000 weekly for treatment of bedsores due to neglect when he was inpatient. The procedure took under 15 minutes. Compromised patient, injured due to basic incompetence, A Medicare probably paid a million dollars or more to treat it.
  - proee 2y ago
    That is insane. Did his insurance cover this? What happens if you refuse to pay such outlandish fees? I'm sorry he had to deal with this.
    - llamaimperative 2y ago
      GP says Medicare paid for it, so the US taxpayer.
    - Aurornis 2y ago
      > Did his insurance cover this? What happens if you refuse to pay such outlandish fees? The billed numbers are almost completely made up. The insurance company (Medicare in this case) will only reimburse up to a set amount. The reimbursement is calculated as min(billed_amount, allowed_amount). If the facility accidentally bills less than the allowed_amount, they get less than they could have. So to make sure they get 100% of the possible payout, they bill extremely high numbers to insurance. It's a dumb system, but it's something you have to keep in mind whenever someone talks about how much things cost in the US system. With expensive procedures, products, or drugs, virtually nobody ever pays the big number. It's just a placeholder to make sure insurance payouts are not left on the table.
      - bliteben 2y ago
        I don't understand how it isn't fraud. I looked at an ambulance bill for my mom the other day: $1798 total -$388 Medicare paid -$1324 Service adjustment $86 Amount you owe. I don't think dumb is sufficient to explain this. It's pretty easy for me to see how someone leaps from this de facto legal system to outright fraud, because the line between them is pretty thin.
        Dylan16807 2y ago
        It's only fraud if the other party (Medicare in this case) is tricked. They expect this kind of pricing/discounting.
        mindslight 2y ago
        The way medical billing works is plainly fraud, but the people who are successfully defrauded don't end up knowing any better. For everyone else it's merely attempted fraud, and if you (forcefully) call out the fraudsters they'll bargain their bill down to something more defensible and/or find someone else to pay it. I'm nearly done dealing with an instance of this myself (for someone else). Had a $1k copay that was legit per their "insurance" plan. The hospital also sent a fraudulent bill for another ~$2k rather than doing the work of figuring out how to bill "insurance" for it. Told them we'd pay in full once they presented a complete set of non-fraudulent bills. Half a year later, with me holding the hands of both bureaucracies, they finally were able to get "insurance" to pay that second bill. I told them we were ready to pay the $1k legit copay, and they told me they had taken care of it months ago using some internal charity fund. The system is an utter joke.
        Suppafly 2y ago
        Medical billing is dumb but I'm not sure why that would be or appear fraudulent. The normal cost of the ambulance service would be $1798, medicare pays a max of ~$500 for ambulances and your mom pays 20% of that. The reason the rest of us would pay $1798 is because we essentially subsidize the medicare rates. Many insurance companies negotiate rates that are some % of the medicare rate, so they might pay 2x or whatever, and pay $1000. Medicare often has agreements that they can't bill the rest of the charge to the patient so it's 'adjusted' essentially written off.
    - Spooky23 2y ago
      That was from the Medicare statement. I think the wound care courts as a surgery.
- guynamedloren 2y ago
  > Total fraud in that case was $900 million, for a only 500 patients, or almost $2M per patient. That seems so outside the bounds of reality that I'm questioning if it's what happened here. I can't imagine how that would pass any kind of sniff test by Medicare. Quote from the article: "In less than two years, more than $900 million in bogus claims were submitted to Medicare for grafts that were used on fewer than 500 patients, prosecutors said." The alternative interpretation of this is that the grafts were _applied_ to 500 patients, but potentially many many more were billed for grafts that they didn't need (and didn't receive). Maybe more feasible?
- naijaboiler 2y ago
  why do people have to be so damn greeedy. $900m on 500 patients is just asking to get caught. Even if all 500 patients had cancer and tripple bypass surgery, and required lengthy ICU stays, their costs will still barely be that. Why can't scammer just exercise some moderation and they get to keep scamming for a long time. No, they have to just get greedy. Greed always get you caught
onlyrealcuzzo 2y ago
No - but $2.7B in fraud over $4.5T total healthcare spending per year is peanuts. This appears to happen over ~5 years or more - so that's $2.7B vs $22.5T or about 0.012% of total spending. The reason healthcare is broken in the US is not because of fraud. It's due to the design. By the way, fraud is inevitable. We might be able to save about ~1% per year on healthcare if fraud was reduced to more reasonable levels. That's not going to move the needle at all.
- vkou 2y ago
  The design of the system makes normal billing practice indistinguishable from fraud. I will go as far as to say that charging $200 for a Tylenol, bundled with a million other different line items in a treatment is fraud.
  - Terr_ 2y ago
    It's only fraud when the victim isn't an individual patient. /s
  - samt 2y ago
    Yes. As usual the worst fraud is completely legal and right there for all to see.
  - Suppafly 2y ago
    >I will go as far as to say that charging $200 for a Tylenol That's a common example but that's not actually what happens at all.
- Aloisius 2y ago
  It’s not like this is the only fraud we’ve found in years. It’s not even the first billion dollar fraud incident case this year. The FBI estimates fraud accounts for upwards of 10% of healthcare expenditures.
  - WarOnPrivacy 2y ago
    > The FBI estimates fraud accounts for upwards of 10% of healthcare expenditures. One of my clients had their business roped into a multi-million dollar medicaid fraud scheme. The FBI eventually handled it but it months and a lot of work to get the feds interested.
sidewndr46 2y ago
if they were smart they paid taxes on the fraudulent gains. So they netted US $5 million or more each
loeg 2y ago
Medicare fraud is really profitable (until you're caught)! There's a reason it keeps cropping up.
- Suppafly 2y ago
  >Medicare fraud is really profitable (until you're caught)! There's a reason it keeps cropping up. Seriously, if they'd just been content with a few million and jetted off to the Caribbean it would have never been noticed. All of these medicare fraud things are always in the multi-millions before they get noticed.

$2.7B in made-up claims, divided by 200 accused individuals, gives us an average of $13.5M per alleged criminal. That's not peanuts!

by cs702 2y ago

$2.7B in made-up claims, divided by 200 accused individuals, gives us an average of $13.5M per alleged criminal. That's not peanuts!

kurthr 2y ago

"In the Arizona case, prosecutors have accused two owners of wound care companies of accepting more than $330 million in kickbacks as part of a scheme to fraudulently bill Medicare for amniotic wound grafts, which are dressings to help heal wounds." Total fraud in that case was $900 million, for a only 500 patients, or almost $2M per patient.

Spooky23 2y ago
Wound care is bullshit when it’s not fraud. My dad was getting billed $12,000 weekly for treatment of bedsores due to neglect when he was inpatient. The procedure took under 15 minutes. Compromised patient, injured due to basic incompetence, A Medicare probably paid a million dollars or more to treat it.
- proee 2y ago
  That is insane. Did his insurance cover this? What happens if you refuse to pay such outlandish fees? I'm sorry he had to deal with this.
  - llamaimperative 2y ago
    GP says Medicare paid for it, so the US taxpayer.
  - Aurornis 2y ago
    > Did his insurance cover this? What happens if you refuse to pay such outlandish fees? The billed numbers are almost completely made up. The insurance company (Medicare in this case) will only reimburse up to a set amount. The reimbursement is calculated as min(billed_amount, allowed_amount). If the facility accidentally bills less than the allowed_amount, they get less than they could have. So to make sure they get 100% of the possible payout, they bill extremely high numbers to insurance. It's a dumb system, but it's something you have to keep in mind whenever someone talks about how much things cost in the US system. With expensive procedures, products, or drugs, virtually nobody ever pays the big number. It's just a placeholder to make sure insurance payouts are not left on the table.
    - bliteben 2y ago
      I don't understand how it isn't fraud. I looked at an ambulance bill for my mom the other day: $1798 total -$388 Medicare paid -$1324 Service adjustment $86 Amount you owe. I don't think dumb is sufficient to explain this. It's pretty easy for me to see how someone leaps from this de facto legal system to outright fraud, because the line between them is pretty thin.
      - Dylan16807 2y ago
        It's only fraud if the other party (Medicare in this case) is tricked. They expect this kind of pricing/discounting.
      - mindslight 2y ago
        The way medical billing works is plainly fraud, but the people who are successfully defrauded don't end up knowing any better. For everyone else it's merely attempted fraud, and if you (forcefully) call out the fraudsters they'll bargain their bill down to something more defensible and/or find someone else to pay it. I'm nearly done dealing with an instance of this myself (for someone else). Had a $1k copay that was legit per their "insurance" plan. The hospital also sent a fraudulent bill for another ~$2k rather than doing the work of figuring out how to bill "insurance" for it. Told them we'd pay in full once they presented a complete set of non-fraudulent bills. Half a year later, with me holding the hands of both bureaucracies, they finally were able to get "insurance" to pay that second bill. I told them we were ready to pay the $1k legit copay, and they told me they had taken care of it months ago using some internal charity fund. The system is an utter joke.
      - Suppafly 2y ago
        Medical billing is dumb but I'm not sure why that would be or appear fraudulent. The normal cost of the ambulance service would be $1798, medicare pays a max of ~$500 for ambulances and your mom pays 20% of that. The reason the rest of us would pay $1798 is because we essentially subsidize the medicare rates. Many insurance companies negotiate rates that are some % of the medicare rate, so they might pay 2x or whatever, and pay $1000. Medicare often has agreements that they can't bill the rest of the charge to the patient so it's 'adjusted' essentially written off.
  - Spooky23 2y ago
    That was from the Medicare statement. I think the wound care courts as a surgery.
guynamedloren 2y ago
> Total fraud in that case was $900 million, for a only 500 patients, or almost $2M per patient. That seems so outside the bounds of reality that I'm questioning if it's what happened here. I can't imagine how that would pass any kind of sniff test by Medicare. Quote from the article: "In less than two years, more than $900 million in bogus claims were submitted to Medicare for grafts that were used on fewer than 500 patients, prosecutors said." The alternative interpretation of this is that the grafts were _applied_ to 500 patients, but potentially many many more were billed for grafts that they didn't need (and didn't receive). Maybe more feasible?
naijaboiler 2y ago
why do people have to be so damn greeedy. $900m on 500 patients is just asking to get caught. Even if all 500 patients had cancer and tripple bypass surgery, and required lengthy ICU stays, their costs will still barely be that. Why can't scammer just exercise some moderation and they get to keep scamming for a long time. No, they have to just get greedy. Greed always get you caught

onlyrealcuzzo 2y ago

No - but $2.7B in fraud over $4.5T total healthcare spending per year is peanuts. This appears to happen over ~5 years or more - so that's $2.7B vs $22.5T or about 0.012% of total spending. The reason healthcare is broken in the US is not because of fraud. It's due to the design. By the way, fraud is inevitable. We might be able to save about ~1% per year on healthcare if fraud was reduced to more reasonable levels. That's not going to move the needle at all.

vkou 2y ago
The design of the system makes normal billing practice indistinguishable from fraud. I will go as far as to say that charging $200 for a Tylenol, bundled with a million other different line items in a treatment is fraud.
- Terr_ 2y ago
  It's only fraud when the victim isn't an individual patient. /s
- samt 2y ago
  Yes. As usual the worst fraud is completely legal and right there for all to see.
- Suppafly 2y ago
  >I will go as far as to say that charging $200 for a Tylenol That's a common example but that's not actually what happens at all.
Aloisius 2y ago
It’s not like this is the only fraud we’ve found in years. It’s not even the first billion dollar fraud incident case this year. The FBI estimates fraud accounts for upwards of 10% of healthcare expenditures.
- WarOnPrivacy 2y ago
  > The FBI estimates fraud accounts for upwards of 10% of healthcare expenditures. One of my clients had their business roped into a multi-million dollar medicaid fraud scheme. The FBI eventually handled it but it months and a lot of work to get the feds interested.

sidewndr46 2y ago

if they were smart they paid taxes on the fraudulent gains. So they netted US $5 million or more each

loeg 2y ago

Medicare fraud is really profitable (until you're caught)! There's a reason it keeps cropping up.

Suppafly 2y ago
>Medicare fraud is really profitable (until you're caught)! There's a reason it keeps cropping up. Seriously, if they'd just been content with a few million and jetted off to the Caribbean it would have never been noticed. All of these medicare fraud things are always in the multi-millions before they get noticed.