Corruption cases show health-benefits fraud out of control
This year’s federal investigation into public employee prescription benefits fraud in South Jersey has yielded a steady stream of guilty please.
In just the past couple of months, an Atlantic City firefighter, a Margate doctor, two local pharmaceutical representatives and six others have admitted defrauding the generous health coverage provided by government and taxpayers of more than $25 million.
Many more convictions are likely, considering that court documents note more than $50 million was paid to a single compounding pharmacy.
This is a lot of fraud for a scheme that only ran for a year and a third, and maybe the final total will be higher. But it’s the minor leagues in the widespread, out-of-control benefits fraud in America. Just look at the federal corruption trial of Sen. Bob Menendez.
Menendez’s co-defendant, Florida eye doctor Salomon Melgen, already was convicted earlier this year for improper practices that allowed him to bill Medicare for more than $100 million in five years.
When federal investigators started questioning Melgen’s scheme, he asked for help from Menendez -- a friend on whom he showered gifts, private jet flights and lavish entertainments -- and other top Democrats such as then-Senate Majority Leader Harry Reid.
Menendez and Reid called former Health and Human Services Secretary Kathleen Sebelius in for a discussion on the Medicare reimbursement policies affecting Melgren. Sebelius, a fellow Democrat, at the corruption trial called it “not a very satisfactory meeting.”
Whether Menendez is guilty and of what has yet to be determined. Likewise, in the South Jersey prescription fraud, the number of teachers, municipal police officers, firefighters and state troopers who participated in the crime and how much they received in kickbacks hasn’t been made public yet.
There will be plenty of time to think about why “public servants” unsatisfied with their ample pay and lavish benefits resorted to crime to get more. What’s already obvious is that local, state and federal health benefits programs are allowing fraud on a massive scale and wasting many billions of American taxpayer dollars.
A Georgetown University law professor and medical doctor expert on Medicare says the health insurance program for seniors keeps its administrative costs low by skipping sufficient oversight on claims. “Medicare’s goal is to shovel money out the door as quickly and cheaply as possible,” said David Hyman.
Marc Pfeiffer, of the Bloustein Local Government Research Center at Rutgers University, said New Jersey’s $2.5 billion State Health Benefits Plan’s generosity presents opportunities for fraud.
The $25 million in prescription fraud convictions so far is “peanuts in the scheme of what actually goes on,” said David Frankford, a law professor at Rutgers-Camden. He said fraud is actually hurting competitiveness among health providers because corrupt beneficiaries are choosing based on who will give them kickbacks.
Many people in the region have wondered why public employees would risk their rewarding careers for kickback money. Frankford’s answer: “People will take the risk if they know it’s fairly unlikely to be prosecuted.”
That means many more are getting away with benefits fraud that’s never looked for, examined or prosecuted. So not only is widespread fraud wasting a lot of taxpayer money, it’s also corrupting government at all levels.
Before government finds new ways to “shovel money out the door,” it must establish the practices -- well-known in the private sector -- for ensuring spending on health and other benefits goes to its intended purposes.