Proposing a story about a local physician fingered by the feds for Medicare fraud and abuse is a quick way to catch an editor’s eye.  Add in some material about the government’s fraud-busting HEAT task force, and you’ve got an action angle to attract clicks and eyeballs to a problem that costs taxpayers an estimated $60 billion a year.

But if you really want to hook the reader, also go wide and go deep: how prevalent is fraud and abuse in your area? And why is cracking down not a “no-brainer” once you put politics into the picture? 

Here’s the first hook: big bucks fraud and abuse is back in the news.

  • In mid-March, three individuals pleaded guilty to defrauding Medicare of $5.4 million by billing for unnecessary diagnostic tests and treatments at medical clinics in suburban Detroit.
  • About the same time, in the Miami area, a man who ran a fraudulent mental health company that billed Medicare for more than $200 million in unnecessary services was sentenced to 24 months in prison and three years of supervised release.
  • On Feb. 28, a Dallas-area physician, office manager and home health agency owners indicted at the end of February on charges of defrauding the government of nearly $375 million.
  • Less dramatically, one of the government’s watchdog agencies (the Office of the Inspector General of the Department of Health and Human Services) found that the Medicare Advantage plans for seniors “lack a common understanding of key fraud and abuse program terms” and are doing a questionable job of implementing “programs to detect and address potential fraud and abuse effectively.”
  • The OIG also said recently that CMS itself has to do a better job making sure its contractors crack down on fraud.

How do you get a story that gets good play? Hooks No. 2, 3 and 4:

  • Local angle. Find out the history of Medicare fraud and abuse in your city or state. Sure, Florida is a hotbed – investigators told 60 Minutes that it’s pushed aside cocaine dealing as a major criminal enterprise -- but other areas aren’t immune. Here’s a list of 20 counties targeted for Medicare fraud. Meanwhile, every sizable city has a Medicare Advantage plan that can be asked about its anti-fraud efforts. (SEE:

  • Risk/reward ratio on fraud. Examine the chances of being caught and the typical penalties in Medicare fraud. The Affordable Care Act has given the government new tools to dramatically increase the chances fraudulent providers will caught and the penalties they receive when they are, although that law-and-order aspect of “Obamacare” has gotten little publicity.

  • Bad apples versus organized criminal activity. Fraud is no longer limited to isolated unethical providers. The Miami mental health scheme allegedly made use of a complicated arrangement involving “various owners, managers, doctors, therapists, patient brokers and marketers.” In the Dallas case, the Centers for Medicare & Medicaid Services (CMS) suspended 78 home health agencies from Medicare based on “credible allegations of fraud” connected to the arrested doctor. And in the largest fraud case in U.S. history, a major for-profit hospital chain, HCA, paid $1.7 billion in fines over a four-year period to settle charges of false claims.

It’s also important to keep in mind that “fraud” and “abuse” aren’t the same. As a recent MedPage today article noted, most of the money bilked from Medicare and Medicaid comes from abuse of the system – including upcoding, bill-splitting, coding errors and excessive testing – rather than outright fraud.

To see where the government is searching for problems, here’s Hook No. 5: the OIG’s workplan and priorities for fiscal 2012.

But remember, too – and this Hook No. 6 goes back to where we started – cracking down on “abuse” can be politically tricky. So, for instance, it may seem like a clear win when CMS says it’s moving beyond the "pay and chase" recovery operations to a more proactive "prevent and detect" model that uses predictive modeling to flag high-risk claims and providers before a check is written.

But others worry about “the criminalization of American medicine” and the hassle factor for physicians fearful of becoming government targets. (Here’s a law firm that specializes in helping doctors avoid trouble and another site that encourages fraud-reporting by whisteblowers.) With Medicaid fraud, there’s worry about excessive burdens on the states for enforcement.

A page one story in the New York Times in March reported that New York State backed down from an aggressive crackdown on Medicaid fraud after a “backlash from the politically powerful health care industry… amid a crescendo of provider complaints of overzealous, nitpicking audits and unfair tactics.”

What’s the difference between oversight and overreaching? With the right news peg, that could be a big part of the story.

Oh, and that $60 billion? Don’t forget that the denominator of total Medicare spending is about $523 billion.

A Little Bit of History

The original Medicare legislation passed in 1965 called for physicians to oversee the appropriateness of billed services through internal committees set up at each hospital. Doctors didn’t exactly rush to form groups charged with second-guessing the work of their peers. By 1969, the Senate was holding hearings on health care fraud that focused – quaintly, by our standards – on overcharges for house calls.


CMS Fraud Prevention Toolkit Background information and links to a long list of resources.

Overview of Fraud and Abuse From CMS.

Stop Medicare Fraud An update from the Departments of Justice and Health and Human Services (though not always updated in a timely manner) on cases the government is bringing.

Michael Millenson is a nationally recognized expert on patient empowerment, e-health and quality improvement. He holds an adjunct appointment as the Mervin Shalowitz, M.D. Visiting Scholar at Northwestern University’s Kellogg School of Management. He spent 13 years as the health reporter for the Chicago Tribune, where he was nominated for three Pulitzer Prizes.