Editorial: Health care fraud — We all pay for it

In July, the U.S. Department of Justice’s Medicare Fraud Strike Force charged 412 people from 30 states — including 115 doctors, nurses and other medical professionals — with $1.3 billion in health care fraud. The government said it was the strike force’s “largest ever health care fraud enforcement action.”

In New Jersey in August, three pharmaceutical representatives, a gym-floor installer and a retired Atlantic City firefighter pleaded guilty in federal court in Camden to charges arising from what the government says was a $28 million fraud involving medically unnecessary prescription creams supplied by a compounding pharmacy.

Matthew Tedesco, a pharmaceutical rep from Linwood in Atlantic County, admitted to receiving more than $11 million for submitting fraudulent prescriptions. The government says some of that money was paid to doctors and to public employees who received the unnecessary medications. Tedesco and others recruited firefighters, teachers and police officers because their gold-plated health plans provided reimbursements for the expensive creams. Additional charges are expected to be filed against several doctors and dozens, if not hundreds, of public employees who agreed to take part in the scam in return for cash.

And just last week, in a smaller but no less offensive scheme, a Boonton man — Rehan Zuberi — was sentenced to eight years in prison and ordered to pay $1 million in restitution for bribing dozens of doctors to refer patients to Zuberi’s medical-imaging centers.

Health care fraud is ubiquitous. The amounts of money involved are astounding. And all of us pay for it — federal taxpayers when Medicare is defrauded, state taxpayers in the case involving New Jersey public employees in public health plans, and individual ratepayers whose premiums inevitably rise to cover the cost of fraud to private insurers.

The FBI has estimated that health care fraud costs the nation approximately $80 billion a year. A U.S. Department of Justice bulletin, “Healthcare Fraud 2016,” went so far as to quote a Woody Guthrie song, “The Ballad of Pretty Boy Floyd,” to describe the pervasiveness of health care fraud:

“As through this world I wander/I’ve seen lots of funny men/Some will rob you with a six-gun/And some with a fountain pen.”

Or a prescription pad. Or a computer.

The $3 trillion health care industry is a big target and, apparently, an easy target. The 2016 report noted that federal healthcare prosecutions netted $2.4 billion in fines and payments in 2015. Since 1997, such prosecutions have recovered more than $29.4 billion for the Medicare Trust Funds.

But that’s still a fraction of the estimated $80 billion a year in such fraud.

Especially maddening is the fact that health care fraud is rarely a “lone-wolf” kind of crime. Dozens of people are usually aware of and complicit in the various frauds — bookkeepers, office staff, nurses and others.

Federal prosecutors deserve praise for their aggressive response to health care fraud. But clearly, they need help. All of us are prospective whistleblowers. To borrow a phrase, “If you see something, say something.”


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