Medicaid = Mega Waste: Medicaid Overbilling Costs Taxpayers Big
By: Barbara Cubin
4/24/08
 Secretary Leavitt
Washington, DC—Representative Cubin signed a letter targeting waste and fraud in the Medicaid program. The letter asks Secretary of Health and Human Services, Michael Leavitt, to audit all of California’s Planned Parenthood affiliates and to investigate any improper practices. Representative Cubin, along with several Members of Congress, made this request upon learning that a 2004 audit of just one California Planned Parenthood affiliate resulted in the discovery of excess billing charges of more than $5.2 million.
“The case in California is upsetting, but unfortunately, it is not surprising given Planned Parenthood’s track record,” Cubin said. “I have long opposed the federal family planning subsidies the organization receives. At the very least, the federal government owes it to the taxpayer to hold Planned Parenthood accountable.” According to Planned Parenthood’s own records, it receives roughly a third of its budget from government grants and contracts, including the Title X Family Planning program.
“The problem of Medicaid fraud is bigger than Planned Parenthood,” said Cubin. “This is just the latest example of state and federal taxpayers being robbed of their hard-earned tax dollars.” New York State’s Medicaid program has also been under fire for reports of improper overbilling. One example among many in New York is of a Brooklyn dentist who billed Medicaid for performing 991 services in a single day. Jason Mehmet, former Medicaid fraud and abuse investigator in New York City, believes up to 40% of all Medicaid claims in New York are either fraudulent or unnecessary.
Created in 1965 as a joint State-Federal entitlement program for the poor, needy and disabled, Medicaid is second only to Medicare in federal healthcare spending. Medicaid currently delivers medical services to more than 63 million Americans at an estimated annual cost to state and federal taxpayers of over $315 billion. The U.S. Office of Management and Budget (OMB) projects that the cost of the Medicaid Program will increase by over 75% over the next five years. Moreover, the National Governors Association has reported that within the next two decades, Medicaid will consume as much as 80-100% of all State revenues. The rising costs have in recent years forced many states to reduce their Medicaid eligibility criteria and benefit packages.
“The states and federal government simply cannot sustain this rate of Medicaid growth without raising taxes or reducing benefits, and I don’t want to see this happen in Wyoming,” said Cubin. “We need to reform this program if we are going to keep it afloat for our nation’s most vulnerable citizens. The first place to begin reforming is with the fraud and abuse that is rampant.”
Unfortunately, the House Democrats’ actions this week may reverse altogether efforts already underway to reform and to find savings in the program. H.R. 5613, the Protecting the Medicaid Safety Net, deceptively suggests that it will protect Medicaid. In actuality, the bill does the exact opposite by making the program more vulnerable to abusive practices. The bill imposes a moratorium until April 2009 on regulations crafted in response to audits of the Medicaid program dating from 1994.
“The states and our Medicaid providers have good reason to be concerned with many of these regulations,” said Cubin. “Congress should most certainly work with the Bush Administration to find some middle ground, but this bill is more than just a one year time out. It is no secret Democrats are hoping to see one of their own in the White House next year. If that happens, we may never see these regulations implemented,” concluded Cubin.
The bill’s temporary moratorium through April 2009 is estimated by the Congressional Budget Office (CBO) to cost $1.65 billion. If these provisions are never fully implemented, the cost to the federal taxpayer will be even greater. CBO estimates that the regulations would generate $17.8 billion in savings over five years, and $42.2 billion over ten years.
The letter the Representative sent to Secretary Leavitt is attached to this release.
Representative Barbara Cubin
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