Court shouldn't let health care fraud win

Where does all the government spending on health care go?

Most of it goes for needed care for elderly, disabled and poor Americans. But some of it is diverted to a less desirable goal. It is consumed by fraudulent claims and improper payments, which totaled more than $70 million in 2010.

Consider some news reports from just this past week. A Houston man was indicted for paying recruiters who brought Medicare beneficiaries to a local nursing home. An Atlanta-area radiation clinic paid $3.9 million to settle charges that it over-billed Medicare for prostate cancer treatments and billed for unnecessary care. A major Florida insurer, WellCare Health Plans, paid $137.5 million to settle a whistleblower suit claiming that executives discussed ways to double-bill Medicare and Medicaid for patient services. The whistleblower received $21 million of that amount.

Last February, the Justice Department brought what it described as the largest health care fraud claim in history, when it charged a Dallas-area physician with billing Medicare for $375 million in nonexistent home health services.

As anyone who follows health care news knows, those cases are only some of the dozens that have been brought or settled in the last few years. And the cases that have been brought are just the tip of a large iceberg. Many fraudulent activities are never uncovered. 

Enforcement will never eliminate fraud entirely. But the health reform law makes a start at tougher oversight.

The law allocated $250 million in additional funds to fraud control over the next decade. And it gave the federal and state governments greater authority to combat illegal payment schemes 

On March 25, the Department of Health and Human Services issued regulations implementing the new anti-fraud provisions. Among other measures, those rules grant government insurance programs new powers to suspend payments pending the outcome of investigations, and they implement tougher screening of providers and suppliers considered at high risk of committing fraud. 

In last week’s oral arguments on health reform before the Supreme Court, several justices indicated that they might overturn the entire law if they find one part of it — the mandate that everyone maintain health insurance — unconstitutional. They said it would be difficult to determine what parts of the law Congress would want to keep, if the mandate is removed.

The issue involved is known as “severability”. The justices must decide whether the mandate can be severed from all or part of the rest of the law, if they strike it down. Their decision will be guided by their understanding of what Congress would have wished in that situation.

Could anyone seriously think that Congress would have wanted the anti-fraud provisions to disappear if the mandate is stricken? That part of the law has nothing to do with reforming the market for private insurance policies, of which the mandate is a key part. Instead, it addresses an ongoing problem with existing public insurance programs. And, as recent news reports reflect, that problem is significant.

The Supreme Court’s decision on the health reform law will address important aspects of federal power. The law’s supporters and opponents are waiting to see whether their interpretation of those powers prevails. But whatever the Court pronounces on those issues, its ruling need not produce a victory for perpetrators of health care fraud.

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