In a CNN interview, Harry Markopolos discussed the mechanisms and devices which serve doctors so well when they decide to carry out medicare fraud. This sheds light on how $60 billion per year can be purloined from the American healthcare budget. The full CNN transcript, in text format, is below. To watch the original video interviews, visit:
The Canadian health budget knows its own share of fraud, with a slippery slope caused by similar loopholes. Example: The Banknote Mill of Drs. Nayar, Khan, Dangor and Datta.
Dr. Sanjay Gupta, Chief Medical Correspondent with CNN, speaks to Harry Markopolos about fraud in the U.S. Health System. The transcript below merges Part I and Part II of the interview.
The CNN series on the high cost of health care continues tonight with medical fraud. It's a huge problem. As much as $60 billion is stolen from medicare each year, by some estimates. That's more than ten percent of all medicare spending, stolen.
President Obama says there's going to be a crackdown on the new world of health care reform. I wanted to know: Is that realistic? So this afternoon I went to Boston, to visit one of the country's best fraud investigators.
His name is Harry Markopolos. Now if that name rings a bell to you, there should be a reason why. He's the financial analyst who flagged the Bernie Madoff scam before anyone else. In fact, he warned government regulators, again and again, but nothing was done about it until late. He wrote a book about the whole thing called No One Would Listen.
Now, he still hunts for financial fraud, but his new playing field is health care. Why? Well, it's kind of like what Willie Sutton said when someone asked him why he robbed banks. Quote: “Because that's where the money is.”
Markopolos: I thought Wall Street had the biggest crooks in the world until I got into health care fraud. In health care, not only do they steal your money, they can steal your life, or they can take your loved one's life. And that's beyond evil.
CNN (voiceover): Harry Markopolos is a highly specialized bounty hunter. He uses forensic accounting techniques to look for fraud on a massive scale. Under federal whistle blower law, anyone who helps the government track down ill-gotten gains can keep about 20%. With an estimated $60 billion of medicare fraud, Markopolos knows the bounty could total $12 billion. He's just got to find the bad guys.
CNN: Medicare fraud, what does that mean exactly?
Markopolos: It means the government is paying money for goods and services that are not being delivered. Someone is submitting a false bill, and the government's paying it, and it's not resulting in any health care for the American population.
CNN: I've heard crazy examples of doctors literally – not doctors, but criminals, literally billing on behalf of doctors who are no longer even alive.
Markopolos: Dead doctors billing is a problem. That's been found certainly in New York State.
CNN: You say that very cavalier. This is just something that is known? “We know that doctor who died a few years ago, we're just going to bill on his behalf and make money.”
Markopolos: There's other frauds that are similarly bad, I think. Females coming in with prostate operations. Or certainly, male pregnancies. It's a no-brainer, yet the government pays those bills repeatedly. Or dead patients receiving care.
CNN: How can that happen? 2010. Literally. I mean, someone's going to say, “Oh yeah, John Doe, his pregnancy, we'll take care of that.” That happens?
Markopolos: That happens, it happens. There's other ones. There are psychiatrists who will bill 42 hours a day, 380 hours a week. Until you catch them.
CNN: We're not talking about inefficiencies here, we're not talking about mistakes. We're talking about people intentionally trying to make money off the government using medicare.
Markopolos: Yes, they are up-coding. A simple case of pneumonia comes in and it pays so much. But you can make several times that much if it's a complex case of pneumonia. So you just falsely code it as complex when it really was just simple. Or you're billing for individual therapy, but you're really providing the therapy in a group setting which is much cheaper to deliver. So you're overcharging the government. And all those little thousands and millions of dollars add up into tens of billions.
CNN: A patient comes into hospital. They have pneumonia. I get a chest X-Ray and it shows a simple pneumonia. But I say, “Ah, you know what? Simple pneumonia only pays this much; a complicated pneumonia pays THIS much. I'm just going to check the box two boxes higher (on the treatment form).” Is that what we're talking about?
Markopolos: Yes. It's as simple as that, and it costs you nothing to check that box, two boxes higher (on the form). You're delivering those claim forms electronically. So how much did that cost you? A fraction of a penny perhaps. And you can make several thousand dollars more.
CNN: You're talking about one box that's off, that denotes where the treatment took place.
Markopolos: So they're charging 25% to 35% more per treatment than they should be receiving, and the government's paying it.
CNN: How do you make money (as a bounty hunter)? Is there a percentage which you bring back, in terms of fraud?
Markopolos: Yes. The government basically will pay 50¢ per dollar of fraud located. They'll fine the bad guys $3 for every $1 that they steal. They give the whistleblower team which I usually lead fifty cents, and keep $2.50 for the government. So the bad guys end up paying all the fines and penalties. And they also pay for the government's cost of investigation. The problem is, we don't have enough government resources to take on enough cases.
CNN: An individual watching right now that's hearing you speak, what can they be empowered to do?
Markopolos: The most important thing they can do is, when they get their bill – it's called an Explanation of Benefits – when they get it in the mail, they need to read it and say, was this treatment provided? Were these lab tests actually run? And if you see things on there that you never received, pick up the phone. Call the number. Call the Medicare Fraud Hotlines. Call your local District Attorney. Call someone in a position of authority so that it can be taken care of and investigated.
CNN: Will it be?
Markopolos: Probably not. There's probably not enough people on the other end of the phone to take those calls and follow up on those calls. But if you don't, you've given a green light to the bad guys. If you have at least picked up the phone, you know you did your job as a citizen. That's all we can ask of you.
CNN: Do you read your bill carefully?
Markopolos: I do. And you know, I've made a conscious decision, because of the business I'm in, and I have a family – I have three small kids, I have a wife. I made a conscious decision to ignore what I'm seeing. Because I'm overbilled. If I want my family to get health care, to continue to receive health care, I can't look at those bills. So I don't practice what I preach. I'm ashamed to say that.
$60 billion dollars – again, a year. The whole Bernie Madoff thing was $60 million dollars in total. Sixty billion dollars a year: that's why there's so much attention on this.
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