As I finish my book on whistleblowers, Saints Sinners and Heroes, I began researching the cost of fraud in the United States. It is such an important question but one that eludes an easy answer. A recent Wall Street Journal series on Medicare fraud suggests that the cost of Medicare fraud alone cost taxpayers $58,000,000,000.00 last year. That’s right, $58 billion!
If that statistic sounds depressing, we know exactly how much the feds were able to recover last year. Just $2.86 billion. For every $1 stolen from taxpayers through Medicare fraud, the government only gets back a nickel.
Part of the problem is how doctors provide services. It is difficult to prove when a doctor performs medically unnecessary procedures. Unless they are truly flagrant, those cases often rely on the testimony of a whistleblower, someone inside the practice with direct knowledge of the fraud.
Limited resources are also part of the problem. 45,000 new physicians, pharmacies, clinics, ambulance companies and other health care providers sign up for Medicare reimbursement each month. This isn’t the number of new Medicare patients; it is the number of providers!
Some of the worst offenders are folks who set up a phony provider, purchase the stolen identity of a legitimate physician, enroll some questionable “patients” and bilk Medicare for millions. Medicare can’t audit every provider. They can’t even keep up with the new monthly provider applications. Random audits help but the real solution remains whistleblowers. Until Congress makes fundamental changes to the Medicare system, Medicare fraud is likely to continue to be a serious problem.
With potential claims of over $50 billion per year, potential whistleblower awards exceed $10 billion per year. If that amount seems far-fetched, remember that the Justice Department paid out in 2014 $435 million in claims under the federal False Claims Act.
If you inside, original source knowledge of Medicare fraud or other fraud involving government funded programs, you may be eligible for an award. Calling the government’s hotline doesn’t get you an award, however. Under the False Claims Act, one must file a lawsuit under seal in federal court.