Treasury prints money, HHS burns it

Like invasive vines, so-called improper payments seem totally resistant to agency efforts to cut them down. You won’t find it on the home page, where most agencies put only happy news, but Health and Human Services has warned improper payments through Medicaid are rising fast.

They’ll hit an estimated 11.5 percent this year, or $30 billion. The rate last year was 9.8 percent. The dollars were about $15 billion in 2013.  Medicare is even worse at 12 percent in its fee-for-service programs.

This despite an Obama administration concerted effort starting in 2009 to tamp down on improper payments. It’s failed. The Government Accountability Office’s Beryl Davis, who overseas all investigations involving finance, says governmentwide improper payments hit $137 billion in 2015. That’s up more than 10 percent from 2014.

So with nearly a quarter of fraudulent federal payments sloshing out through the Medicaid program, what in holy heck is going on?

HHS itself puts ineligible and excluded providers at the top of the list. Second comes identity theft.

The back story on providers: Rules for provider eligibility are constantly changing, and they vary from state to state. That’s partly a function of the Affordable Care Act. HHS says, somewhat euphemistically, “States are facing greater challenges keeping pace with stricter enrollment requirements.”

As for identity theft, Medicaid enrollment is rising fast. Last year it hit almost 72 million people, up by 12.8 million since 2013. No wonder the Centers for Medicare and Medicaid Services has trouble keeping up. ID theft ain’t all that tough when it comes to getting prescriptions, wheelchairs and whatever else Medicaid pays for. All you need is a few numbers from a form left laying around or a label. Many crooked providers invent their own patients, concocting people, services and products out of thin air and sending in the bills. (This is the same program that delays eligibility in kind if a destitute old person had given a thousand bucks to her local church in the last five years.)

The sheer magnitude and complexity of CMS programs contributes to the confusion and therefore the improper payments. Here’s what HHS itself says, referring fraud in Home and Community-Based services and in Personal Care Services: “Because of the variety of HCBS and PCS services and places of service, it can be challenging to keep track of who does what, where, and when. This makes such services easy targets for fraudsters.”

Providers — read crooked doctors and their cohorts — also deliberately “upcode” their services when billing CMS. They might give granny an aspirin but bill the government for a CAT scan. Or loan Uncle Bob  a cane and bill CMS for an electric scooter.

To its credit, for each category of ripoff, HHS provides links to the programs, instructions and prevention tools available to states and federal staff responsible for authorizing payments. It’s not as if the people there like writing checks to thieves and quacks.

Approve of them or not, these vast and Byzantine federal programs at the ground level provide lifelines to millions of people. So summary execution of them — the programs, not the people —  is no answer. Yet HHS, the White House and Congress need to device a crash program to exponentially reduce the tens and hundreds of billions in waste that clings to them like sucker fish on a whale.

A special place in hades is reserved for people who figure out how to game the system then proceed to do so. This CNBC “greed” report details a few egregious players in what has become a fraud storm. Let’s hope judges throw the book at them.