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Fraud helps boost Medicaid user costs 7.9K percent

June 20, 2018, Washington, DC — Health care consumes 17 percent of the nation’s gross domestic product, driven in part by government control, Obamacare and massive fraud in Medicaid, once a Washington afterthought but now serving 70 million, according to a sweeping new Senate report.

Set for release by the Senate Homeland Security and Governmental Affairs Wednesday morning, the investigation by Chairman Sen. Ron Johnson’s staff found that Medicaid, which initially cost just $222 per user, has soared to $7,973, a 3,491 increase. Overall cost to taxpayers for the program designed for the poor is $554 billion.

And, according to the report, a major reason is fraud, overpayments and poor oversight by the Centers for Medicare and Medicaid Services. “Medicaid fraud is rampant,” said the report provided in advance to Secrets.

The fraud found by the committee’s majority staff was sobering and stunning. For example Medicaid overpayments to health care providers totals $37 billion, hundreds of thousands of users aren’t even eligible for Medicaid, many “dead” people are getting benefits, there are 20,000 fraud investigations ongoing, and several providers are reporting “spectacular profits.”

Another driver in the surging costs for Medicare was Obamacare -- the Affordable Care Act -- said the report. “The ACA worsened the problem of Medicaid fraud and overpayments by giving states incentives to declare people newly eligible to receive 100 percent federal reimbursement during the Medicaid expansion’s first three years,” it said.

“For American taxpayers to have confidence that Medicaid funds are only going to those truly in need, CMS must better police waste, fraud, and abuse in the Medicaid program,” said the report, titled "The Centers for Medicare & Medicaid Services Has Been A Poor Steward Of Federal Medicaid Dollars."

The level of fraud and mismanagement cited in the report is especially concerning since President Trump has pledged to fix the healthcare system.

But expecting the government to cut overall costs may be tough since it is the government that provides so much health care, added the report. It said, "The U.S. health care financing system is broken and increasingly is dominated by the government. By transitioning to a third-party payment system, we have separated the consumer of health care products and services from the direct payment for them. Most consumers do not know what treatments costs, and except for the cost of insurance or copays, they really do not care."

Some of low points pulled from the report:

Medicaid overpayments to providers stand at $37 billion per year, a 157 percent increase since 2013.
California spent more than $1 billion in federal Medicaid funds for 445,000 ineligible or potentially ineligible beneficiaries.
The Government Accountability Office discovered Medicaid benefits for dead people and prisoners; hundreds of thousands of beneficiaries who provided apparently false Social Security numbers; and an ACA data hub granting coverage to fictitious applicants.
Private insurers have made “spectacular profits” from Medicaid expansion in California, with one insurer’s margins increasing 578 percent in the expansion’s first two years, from $71 million to $484 million.
Much of Medicaid’s recent growth is due to the ACA, which expanded Medicaid eligibility to include adults under 65 with incomes up to 133 percent of the federal poverty level. CMS significantly understated its projections for per-enrollee spending on adults newly eligible for Medicaid under the ACA. HHS now estimates that federal Medicaid expenditures—which were $299 billion in fiscal year 2014—will rise 96 percent to $588 billion by 2025. CMS recently acknowledged “the heightened potential for waste, fraud and abuse in states that chose to expand their Medicaid program under the [ACA].”

Source: Washington Examiner

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