BY PASCAL J. GOLDSCHMIDT AND KENNETH W. GOODMAN

PGOLDSCHMIDT@MED.MIAMI.EDU

Miami Herald – link to original

Feb 6, 2010

Medical fraud kills people. Because it does this slowly and indirectly, we tend not to notice it, and our response is more often the clucking of tongues than the moral outrage that usually accompanies mass murder.

But make no mistake: People who abuse the system by charging for bogus medical services, billing for unnecessary or inappropriate procedures or devices — or even inventing patients and billable maladies — are killers.

Alas, South Florida leads the nation in medical fraud. In recent years, according to the Medicare Payment Advisory Commission and the Dartmouth Atlas of Health Care: “Miami-Dade and Broward counties spent 39 percent more on health services than the national average, the highest rate of any U.S. community.” Miami-Dade spent an average of $2,200 per Medicare patient on durable medical equipment; the national average is $250. The county has more per capita equipment suppliers than anywhere else.

Miami-Dade received half a billion dollars in payments for the sickest home healthcare patients. That sum was more than the rest of the United Stated combined, despite the fact that 98 percent of eligible patients do not live in Miami-Dade. It has therefore become a regular occurrence to learn that someone in South Florida has been arrested for inventing another way to defraud the system by especially odious means — billing or charging patients under the false pretense of providing medical care.

Recently, U.S. agents arrested 26 people, including a Miami doctor who was accused of a $40 million rip-off in which home-care patients were fraudulently described as blind diabetics so Medicare could be billed for extra nursing visits. So, what else could we spend that $40 million on? How many lives could be saved under a comprehensive reform of the U.S. healthcare system — reform impeded by distrust that is magnified by fraud? Medical reform has for generations focused on reducing the cost of healthcare, about $10,000 per year per adult. Healthcare budgets are generally capped annually, so that when criminals acquire resources through fraud, those resources are not available for real patients, for needy patients, for the rest of us. That is, the consequence of fraud is the diversion of resources that would otherwise improve — or save — the lives of patients.

It is not as if that $40 million home-care swindle is directly responsible for the deaths of Garcia or Smith or Baby Marie, or that the money will somehow show up in the budget. We contend that medical fraud is fatal because the budget for Medicare and Medicaid is limited and healthcare con games can divert resources from life-saving procedures, treatments and public health services such as vaccinations.

Indeed, some of the billions diverted by Medicare and Medicaid hoodlums could in principle be allocated judiciously and used to save the lives of newborns and frail elderly patients, help poor patients of all ages to buy their medicines and provide uninsured patients with access to life-saving procedures such as dialysis for kidney failure.

What can we do to stop this epidemic of fraud, one of South Florida’s most dangerous scourges?

Some steps are obvious: If you know of someone who is engaging in medical fraud, report it to the police. If you are invited to participate as a patient or care provider in medical fraud, report it. Prosecutors say the Miami doctor arrested in the $40 million fraud case referred 1,250 patients and bribed two clinic owners — lots of potential warning-flag wavers there.

The government gives solid advice: “You, as the Medicare beneficiary, are the most important link in finding Medicare fraud.” (Visit www.medicare.gov/fraudabuse/HowToReport.asp for comprehensive instructions.)

Federal authorities are focusing on South Florida to combat medical fraud. We welcome their efforts and want to help them. Indeed, all people of good will need to help them, and support the fight against this deadly 21st Century crime wave. Health system rip-offs are not very interesting to ethics experts; their wrongness is beyond dispute. The real challenge is at the level of public policy, where civil society must find the means and mettle to say enough is enough.

Pascal J. Goldschmidt is dean of the University of Miami Miller School of Medicine and CEO of the University of Miami Health System. Kenneth W. Goodman is director of UM’s Bioethics program.

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Posted on Fri, Sep. 04, 2009

Coral Gables Gazete - link to original article

As of Aug. 13, with six weeks left to the end of the 2008-2009 Fiscal Year, according to official records Hernandez had already spent $623,737.34 on outsourcing legal expenses. These annual “services” were budgeted at $500,000 in the city’s mysterious budget category called “Non Departmental Expenses.”

By George Volsky
georgevolsky@aol.com
                                    
For the third consecutive year, outside legal expenses of Coral Gables Attorney Elizabeth Hernandez will have a substantial deficit which adds to the woes of the cash-starved city. As of Aug. 13, with six weeks left to the end of the 2008-2009 Fiscal Year, according to official records Hernandez had already spent $623,737.34 on outsourcing legal expenses. These annual “services” were budgeted at $500,000 in the city’s mysterious budget category called “Non Departmental Expenses.”

By Sept. 30, when the current fiscal year ends, Hernandez’ expenses for outside legal services (her regular budget is well over $700,000, of which she personally gets more than $300,000) could reach $850,000, if not more. In FY 2007-2008, she overspent $180,189.12, and in FY 2006-2007 she over-budgeted by $504,844.14, the documents show. Therefore, her office’s three-year deficit spending could reach more than $1 million, the largest of all departments. Hernandez herself is the highest paid city employee: Her salary, benefits and “add-ons” are almost twice the size of what Secretary of State Hillary Clinton receives.

The budgets of the city departments – except of the city clerk and of the city attorney – are supposedly closely supervised by the city manager through his finance director. They have to be strictly adhered to, as Finance Director Don Nelson told commissioners at a recent budget workshop.

But for years they never were. Under David Brown, practically all departments, especially those headed by his favorites, were brazenly undisciplined, fiscally and administratively. Annual budgets routinely, and perhaps purposely, had over 30 unfilled positions, money which formed a slush fund of sorts. That cash was used by Brown to cork up large fiscal leeks and to pay for such expenses as his junkets, his infamous wining and dining and, on one occasion, a birthday cake for himself.
 
The operations of Hernandez’s office, on the other hand, under city regulations are said to be supervised by the commission which hires and can, by the three votes, fire the city attorney. While City Manager Patrick Salerno has ordered his deputies – not strongly enough according to most observers – to tighten their belts (this week city’s Code Enforcement section receives new costly electronic equipment), Hernandez has run her shop without fiscal restraint. As far as anyone can recall, not one commissioner – let alone Mayor Don Slesnick – has ever expressed concern about the cost of her operation, about the amounts she asks the city to pay law firms, indeed about the wisdom and professionalism of initiating extremely expensive legal actions.

According to many legal experts, under Hernandez as its attorney Coral Gables has become extraordinary litigant. Clearly, some lawsuits are forced upon the city, requiring professional response and thus outside experts — Hernandez has not been known to participate in legal work of even medium complexity. But in numerous cases, under her direction and without the commission’s voicing any worry about cost and outcome, the city has doggedly litigated, when most prudent course would have been to settle.

One such major case involved former purchasing director Carmen Lezama. After a lengthy and, experts opined, useless and bitter legal battle, Hernandez was forced by the insurance company to surrender and pay a large settlement fee. Another example, noted in the current fiscal year, was the losing American Legion case, which Hernandez pursued, many thought, unwisely, and on which Coral Gables spent in this FY $22,000.
 
The case of the Coral Gables Country Club, involving Granada LLC, the club’s former managing company, cost the city this fiscal year so far $218,000, adding to at least that much in  2008 and 2007.  Because the litigation has a long way to reach the courtroom, the final cost could be astronomical. James Crosland, Hernandez’s hand-picked labor lawyer has billed the city thus far in this fiscal year $220,000. Again, his total for 2008-2009 fiscal year could be much higher come Sept. 30, and nobody knows who supervises his work.

There was also a payment of $1,500 for “services” to a law firm that employs an attorney who earlier this year represented Hernandez before the Miami-Dade County Commission on Ethics, in a private matter. Hopefully, the unexplained charge involves city work; the question which will be resolved when her office provides particulars of the “services,” public records requested more than two months ago.
 
There are several large payments made by Hernandez to firms for “general professional services,” a vague description which offers no hint as to what Coral Gables residents have paid for.

There is one bizarre charge: Hernandez paid $536 to a lawyer apparently to observe the commission’s meeting, a large sum given the session’s limited entertainment or educational value.

The city’s budgetary “Non Department Expenses” category is also bizarre: it began in  fiscal year 2008-2009 with $1,018,500 and ended  with $1,927,000. At a recent budget workshop, Nelson did not explain what that extra $900,000 was for. In the current FY – as in FY 2009-2010 “Non Department Expenses” appropriation of  $1,628,000 – there is other unexplained expenses: $200,000 for “Other Professional Services,” $25,000 for “Other Miscellaneous Expenses,” as well as $20,000 for “Other Grants and Aids.”

The strangest of all, for the first time ever and also without elaboration there is $355,000 for “Employee Sick/Annual Leave Payments.”  Fiscal discipline demands that expense be included in the wage part of each department’s budget.

BY MATTHEW HAGGMAN AND JACK DOLAN

MHAGGMAN@MIAMIHERALD.COM

Miami Herald – 8/23/09 – link to original article

When Miami-Dade Mayor Carlos Alvarez delivered his State of the County speech in February, he said the most serious economic crisis since the Great Depression required government to “do more with less.” Budgets must be trimmed, jobs cut and waste eliminated.

“Make no mistake, we are in for some tough times,” Alvarez warned. “We are all in this together.”

Yet, three-and-a-half weeks after the speech, Alvarez gave an 11 percent pay raise to his chief of staff, Denis Morales.

The hike increased Morales’ salary from $185,484 to $206,783 annually; he also gets $18,720 in cash and executive benefits. The raise was backdated to Sept. 21, 2008, so Morales received the pay increase over the previous five months, too.

The result: his March 8 bi-weekly paycheck was for $17,281.

On the same day, the mayor gave a 15 percent raise to Robert Villar, his director of policy and legislative affairs, boosting his pay from $95,779 to $109,879. That increase, too, was backdated to September. The policy advisor’s March 8 county paycheck: $9,747.

At a time when he is publicly preaching austerity and shared sacrifice, Alvarez has quietly used taxpayer funds to shower his closest advisors — from his spokeswoman to his scheduler to his senior advisor — with significant pay increases, county payroll data and personnel documents reviewed by The Miami Herald show.

In all, 12 employees of the mayor have received raises of more than 10 percent since last year, the county’s payroll database shows.

Commissioners were kept in the dark.

In July Commissioner Sally Heyman requested from the mayor’s office “personnel salaries and executive benefits packages for each individual as they were on January 1, 2009 and what they are today.”

Heyman said she wanted to see which employees received raises this year, prompted by concern that a county pay cut would disproportionately affect lower-level workers if high-level staffers had recently pocketed handsome raises.

The documents produced for Heyman by the county mayor’s office — three pages of spreadsheets listing name, title and compensation — reflect neither Morales’ nor Villar’s pay raises.

BACKDATED RAISES

The sheet showed their pay on January and again in July. Since their March raises had been backdated to September, the sheet indicated that their pay had been static.

“What the mayor submitted to us is false, absolutely misleading. A lie,” Heyman said. “Everyone knew we were coming into tough times, yet now to find out he gave raises to his top staff — I find it appalling.”

Mayoral spokeswoman Victoria Mallette said it would have been “untruthful” to tell Heyman what Morales and Villar were actually paid the first two months of 2009, because the raises they got in March were classified as retroactive.

“I don’t see the discrepancy,” said Mallette, whose own pay increased 54 percent in 2008. “We are making absolutely no attempt to mislead anyone.”

Alvarez refused to be interviewed for this story. But in a written statement, he said: “Nothing nefarious has happened here.”

After the adoption of a strong mayor form of government — and merger of the mayor and county manager offices — Alvarez realized his executives were not paid as well as those working for the manager, he wrote.

“It became evident that the salaries of members of my senior staff — my inner circle — were disproportionate with other executives in government,” wrote the mayor, who is paid $245,393 annually, with a $99,554 benefits package.

County Manager George Burgess, for instance, is paid an annual salary of $345,515, plus $100,466 in cash and benefits. Assistant county managers like Cynthia Curry and Alina Hudak earn annual salaries of $253,768 and $258,967, respectively, with $18,720 in cash and benefits each.

“To rectify the disparity, I made the decision to adjust the pay of several key employees,” Alvarez said.

He did so despite declaring in his February speech that Miami-Dade leaders have long anticipated the economic storm battering South Florida.

“Two years ago, we saw the writing on the wall,” Alvarez said.

Across Miami-Dade County, private businesses are grappling with the searing recession by trimming budgets, freezing or cutting salaries, and laying off workers. The unemployment rate has doubled in the past year, rising to 11.6 percent.

Even the White House, where top aides are paid less than in Miami-Dade County, has frozen salaries. President Obama’s Chief of Staff Rahm Emmanuel earns $172,200 a year.

Miami-Dade County government confronts a $427 million budget gap. That hole has prompted Alvarez to propose both tax increases and cuts that include laying off 1,700 county workers, reducing pay 5 percent and scaling-back government services.

While merit raises are not frozen, the automatic annual cost of living increase — 4 percent last year — has been suspended.

County commissioners will vote on a new budget next month, in what promises to be their most heated tax and spending debate in years.

But as budget woes gather steam, the mayor has doled out raises to favored staffers and old friends. Alvarez, 56, has been a mentor to Morales, 43, for 30 years, including decades working together at the Miami-Dade Police Department.

Heyman wasn’t the only commissioner surprised by the news.

“I must have missed the press conference where he announced that,” Commissioner Carlos Gimenez said Friday, when he learned of the pay hikes from a reporter.

The two biggest winners are the mayor’s senior advisor, Luis Gazitua, and Mallette.

Gazitua, a 33-year-old attorney whose father contributed more than $30,000 — either personally or through business interests — to Alvarez’s strong mayor campaign, saw his salary jump 26 percent following a series of raises in 2008, the county payroll database shows. His salary increased from $81,094 to $85,072 in March. By July it bumped to $88,426.

Around that time, in June 2008, manager Burgess called for “significant reductions” in all departments because of declines in tax revenues.

Then in November, with no change in title, Gazitua received his biggest boost. His salary increased 15 percent, rising to $101,842. He also receives $10,170 in cash and other executive benefits.

County spokeswoman Mallette’s salary soared 54 percent through a series of three raises in 2008.

The first came in January, when her title changed from media relations manager to director of the Office of Communications. That boosted her paycheck by 10 percent, from $81,319 to $89,451.

The 4 percent cost of living bump in July brought her salary to $93,030.

Then in October, with no change to her title, she received a 34 percent raise that brought her salary to $124,999. Her executive benefit package also climbed from $10,170 to $18,720.

Mallette said she is “absolutely not” embarrassed by her pay. The Executive Office raises reward employees for “an overall increase in responsibility or to bring people into parity with other people who perform similar functions,” she said.

The month before Mallette’s big raise, Alvarez had hired Matthew Pinzur, a then 31-year old Miami Herald reporter covering County Hall, as a $115,000 per year assistant to the county manager.

Mallette said her responsibilities have increased dramatically since the adoption of the strong mayor system in 2004. Public records requests and complaints now come to her office, instead of a countywide media relations staff that once served the manager.

Mallette said she also writes the mayor’s speeches, from his annual State of the County address to comments at police graduations.

“Sometimes he’ll want speaking points, sometimes he’ll want a speech, sometimes he’ll just want notes. There are times when it’s just crazy,” she said.

These tasks fall to her even though taxpayers bear the cost of a $46,000 per year mayoral speechwriter. Mallette said the job title is a hold-over from the Penelas administration, and that speechwriter Eric Esteban responds to constituent letters, composes occasional talking points and updates the mayor’s Facebook page.

Morales and Gazitua did not respond to requests for comment. Villar referred questions to Mallette.

“As a general rule, I don’t feel comfortable going case by case through personnel decisions,” Mallette said, noting that some in the mayor’s office had been “woefully underpaid” for what they were doing.

“While [the raises] may seem like they were timed at the perfect time — as we were coming into tough times — they were a long time in coming.”

Yet the economic times are the very reason not to give such raises, some say. “For him to make these raises in this kind of economy is ludicrous. It is contempt for the electorate,” said developer Martin Z. Margulies, a critic of major county initiatives like the new ballpark.

Two secretaries in the mayor’s office got 14 percent raises last year. Another, Delivette Gonzalez, who controls access to the mayor, got a 9 percent raise to $105,418. She is listed in the database as his scheduler — the calendar on the mayor’s website shows two public events this month.

While key staff have gotten big raises, the overall budget for the mayor’s office could be on the way down. A spreadsheet provided by Mallette on Thursday indicates the mayor’s proposed budget would reduce his office staff from 62 to 59 employees next year, and the budget from $9.1 million to $8 million.

COMPLEX COUNTY

Plus, work at a county with a geographic footprint comprising more than 2,000 miles is more complex than many realize, Alvarez wrote in a separate statement posted on the county’s website last week.

“Too often to outsiders, high-paid executives become just names with salaries next to them,” the mayor wrote. “That’s unfair. You never truly know someone until you’ve walked a mile in their shoes.”

———————–

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——————————————

letsgofins09 wrote on 08/23/2009 08:46:31 AM:

Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot

From “Francisco’s Money Speech“ by Ayn Rand  

El Nuevo Herald – 8/22/09 - enlace al original

BY ALBERTO MILIAN

Lord Acton dijo que el poder corrompe y el poder absoluto corrompe absolutamente. La confirmación de esta frase se ve en este condado diariamente. Observamos una vasta burocracia que devora fondos públicos y no responde al pueblo. El resultado es una burocracia arrogante y atorrante. Sostenida por sueldos inflados, beneficios suntuosos y vagancia incesante, la elite de esta burocracia no solamente lucra con nuestro dinero, sino también ignora nuestras necesidades.

Recordarán que Carlos Alvarez, “el policía en la alcaldía”, iba a acabar con la corrupción y el despilfarro. Para “salvarnos” exigió y se le concedió la alcaldía fuerte. Aparentemente, lo del “alcalde fuerte” fue otra farsa política. Resulta que el alcalde es flojo y poco ha cambiado.

Como alcalde Alvarez gana un salario de casi $250,000 al año. Sin embargo ha preservado al administrador del condado, George Burgess, que gana más de $340,000 dólares anuales. El señor Burgess está acompañado por 18 asistentes administradores. Tres de estos burócratas hinchados ganan salarios que llegan a un total de $750,000. El presupuesto de los 18 asistentes de Burgess llega a casi $4 millones.

Es inconcebible que mientras el pueblo está agobiado con desempleo e impuestos más altos, estos personajes engreídos cobren salarios descomunales. Hasta hace poco el alcalde Alvarez tenía un fotógrafo oficial que ganaba $76,000 anuales. Con este despilfarro administrativo supuestamente tienen la capacidad y el deseo de servir al pueblo, ¿correcto? Incorrecto.

La semana pasada conversé con el comisionado Javier Souto sobre un fascinante memorándum que él escribió dirigido al administrador Burgess. El documento es revelador porque cristaliza la actitud prepotente de nuestros burócratas más elevados y a la vez ilustra el fracaso de las tituladas reformas como el supuesto alcalde fuerte.

En el memorándum, el comisionado Souto se queja por no poder comunicarse con el administrador Burgess. Aparentemente Burgess se fue de vacaciones y no se podía molestar con atender a un representante electo del pueblo.

Souto quería hablar con Burgess porque se le había informado que Burgess y sus 18 asistentes ya no participarían en investigar los problemas municipales del distrito de Souto. Este incluye las aéreas de Fountainebleau, Westchester y Kendall.

Souto fustiga a Burgess por su arrogancia en descartar una de las aéreas más importantes del condado, pero también por la ostentación burocrática. Resulta que Burgess mantiene dos veces el número de asistentes que anteriores administradores. Sin embargo, Souto nota que Burgess ya no atiende sus responsabilidades en prestarles servicio a los contribuyentes. A la vez, le dedica tiempo a los proyectos extravagantes como el túnel de la bahía o el estadio de pelota de los Marlins.

Bajo la dirección de Burgess han proliferado los departamentos burocráticos, de 34 a 50. Sin embargo, nota Souto en su comunicación, los servicios al contribuyente han disminuido. Quizás por esta incapacidad administrativa, en los últimos años ocho áreas del condado se han incorporado como municipios independientes. A pesar de estos cambios, Burgess continúo estableciendo más puestos burocráticos e inflando el presupuesto del condado.

Diariamente leemos en los periódicos que la crisis económica pone en peligro los servicios gubernamentales. La solución de la clase política y sus aliados burocráticos es la misma canción: un coro redundante para subir los impuestos y recortar los servicios, incluyendo los de policía y bomberos.

Rara vez se recomienda la solución que tenemos que tomar en nuestros hogares: gasten el dinero de una manera más eficiente y trabajen más horas. Con sueldos inflados la camarilla burocrática ignora los aprietos que representa el campo minado que atraviesa la ciudadanía todos los días.

os ejemplos de la soberbia burocrática en este condado sobrepasan lo decente. La ciudad de Miami, una de las más pobres de la nación, se enfrenta a un déficit de $118 millones. Pero la mitad de los empleados de la ciudad ganan más de $100,000 anuales. Bochornosamente la ciudad está contribuyendo espléndidamente a la fabricación del estadio de los Marlins.

El presupuesto del condado enfrenta un déficit de casi $500 millones. Alvarez quiere aumentar los impuestos y suprimir servicios. Pero vemos que mantiene y no supervisa a una camarilla de burócratas arrogantes y demasiado bien pagados. ¿Para esto quería ser alcalde? ¿Para esta desvergüenza quería ser alcalde fuerte? Es hora para un cambio.

Abogado criminalista y ex oficial

del ejército de EEUU.

What is the yearly estimate of Medicare’s financial fraud?

a)    $19.2 million

b)   $85 billion

c)    $60 billion

d)   Opaque, approximately $250 billion

Answers:

A. This is the payments Medicare made for a single bogus claim to an individual in Miami (see to a Miami-based Medicare fraud ring busted)

B.  This is the correct answer. This is a figure derived from testimony before Congress by Harvard University’s Malcolm Sparrow, a specialist in health-care fraud, who thinks that as much as 20 percent of the federal health-care budget is consumed by fraud. (see Government health care is a target for massive fraud)

C .  This is Medicaid rip-offs which is expected to top $60 billion a year nationwide. (see Government health care is a target for massive fraud)

D.  No, this is not a healthcare-related figure; instead, it represents the problem with another mammoth government program. In this case it is TARP (Troubled Assets Relief Program). Elizabeth Warren, a Harvard Law School professor who chairs a TARP oversight panel created by Congress, concluded that much of the work by the Treasury and the Federal Reserve to implement TARP’s plans and policies has been opaque. In one case she found that Treasury had undervalued more than $250 billion in transactions. (see Doubts about oversight of bailout spending persist)

In summary what we see is that government does not like to implement the tough measures require to bring accountability and efficiency to any program.  As I have argued before (see Health-care system and “We the people”), there is a reason for this governmental indifference towards strict oversight of their programs, mainly they don’t want to alienate the voters since legislators primary goal in life is to get elected.   Given that the supervision necessary to control this financial drain will demand unpopular measures – such as filling-out forms, delay in payments to review information, etc – the legislators do not like their name associate with  such measures. Simply stated,  these oversight procedures do not attract voters, which means that legislators will not implement them.  That is what you can expect form government.

Jose A Hernandez, MD
elcubano@aol.com

Stop the scams – link to original article

Miami Herald Editorial

August 16, 2009

OUR OPINION: Medicare must cut payments for fake diabetic treatments

   Some lucky ‘‘patients’’ get flatscreen televisions as gifts from home care providers. It’s the cost of doing business in South Florida — Medicare fraud that’s robbing taxpayers hundreds of millions, even billions, of dollars. 

    This particular scheme involves home visits to inject insulin for elderly patients with diabetes — a rare service in most of the nation. 

    But not in Miami-Dade, where such services are out of control. 

    Many of these patients don’t have diabetes — they’re not even sick. They were created by crooked providers who bribe doctors for referrals and then pay Medicare patients a kickback — anything from cash, groceries or fancy TVs — to use their Medicare ID. 

    Now, finally, Medicare plans to step up its enforcement — not after millions of dollars have been stolen in false claims, but at the front end of the billing process. The government wants to cap Medicare payments to 10 percent of the bill for agencies treating homebound diabetics starting in January. 

    That approach requires careful vetting. It’s a way to control fraud, but it’s not fair to the real diabetics, relatively few in number, who simply cannot treat themselves. They should not pay the price for the greed of others. 

    It’s way past time to get serious about Medicare fraud, particularly as Congress considers healthcare reform. If Medicare is an example of how a public option for insurance might work, then the federal government must first clean up Miami-Dade, which has become ground zero for fraud. Most of these ‘‘outlier patients,’’ as those who need the extra home visits are called, aren’t diabetic or if they are, they don’t need a nurse to inject them. They’re simply part of the scam. 

    Consider that nowhere else in the country are such billings as commonplace as in Miami-Dade even though there are fewer diabetic patients in this county by percent of population than in retiree-rich Palm Beach County or the Tampa Bay area. The average cost of home healthcare runs at $19,230 per patient in Miami-Dade. In Chicago, it’s $635. 

    The proposed national cap would save about $340 million a year in Miami-Dade — money that could be spent on truly sick patients. 

    Federal prosecutors have been cracking down on Miami-Dade’s $1.5 billion home health industry the past couple years. But until recently Medicare payments continued to flow to fraudulent providers because the government had only been checking suspicious claims after payments had been made and, often, the enriched scammers had fled. 

    Tougher scrutiny is warranted. The up-and-up providers that follow the rules and treat real patients will survive. For the others, good riddance.

Doubts about oversight of bailout spending persist – link to original article

Lawmakers and watchdogs are concerned at the lack of information about the use of funds disbursed by the Troubled Assets Relief Program.

BY CHRIS ADAMS

MCCLATCHY NEWS SERVICE

The Miami Herald – August 16, 2009

WASHINGTON — Although hundreds of well-trained eyes are watching over the $700 billion that Congress last year decided to spend bailing out the nation’s financial sector, it’s still difficult to answer some of the most basic questions about where the money went.

Despite a new oversight panel, a new special inspector general, the existing Government Accountability Office and eight other inspectors general, those charged with minding the store say they don’t have all the weapons they need. Ten months into the Troubled Asset Relief Program, some members of Congress say that some oversight of bailout dollars has been so lacking that it’s essentially worthless.

“TARP has become a program in which taxpayers are not being told what most of the TARP recipients are doing with their money, have still not been told how much their substantial investments are worth, and will not be told the full details of how their money is being invested,” a special inspector general over the program reported last month. The “very credibility” of the program is at stake, it said.

Access and openness have improved in recent months, watchdogs say, but the program still has a way to go before it’s truly transparent.

TREASURY’S STAND

For its part, the Treasury Department said it’s fully committed to transparency, and that it’s taken unprecedented steps to report the status of TARP to the public. It regularly posts information on which banks have received money, as well as details about each of those transactions. Further, Treasury said, it doesn’t agree with all of its watchdogs’ recommendations, which it said could hamper the program’s effectiveness.

TARP was passed in the midst of last fall’s financial meltdown as a way to keep American banks from falling deeper into the abyss.

The program was controversial from the start. Its supporters say it has helped spark bank lending in the country, but critics say it has unfairly rewarded the big banks and Wall Street firms that pushed the economy to the brink.

The program also has undergone a major transformation. When the Bush administration first went to Congress for the money, TARP’s main purpose was to buy up hundreds of billions of dollars in bad mortgages and so-called mortgage-backed securities that were bought and sold on Wall Street.

Today, TARP consists of 12 programs that sent those hundreds of billions of dollars to big banks, but it’s also bailed out auto companies, auto suppliers, individuals delinquent on their mortgages, small businesses and American International Group, the big Maxine Fiel,insurance company.

The watchdogs now must oversee the maze that TARP has become. Just because a lot of people are watching, however, doesn’t mean they get everything they want to see.

One of the most prominent watchdogs is Elizabeth Warren, a Harvard Law School professor who chairs a TARP oversight panel created by Congress.

Her panel has released 10 major reports that examine TARP’s plans and policies, finding that much of the work by the Treasury and the Federal Reserve has been opaque.

One report took Treasury to task for vastly undervaluing more than $250 billion in transactions with the country’s major banks, and another suggested several ways to revamp federal regulation over the financial sector. Other reports have criticized the Treasury for its initial defensiveness in opening its books.

LACKING POWER Despite its mandate, however, the panel doesn’t have subpoena power. That means it can ask, but can’t compel, officials from Treasury, the Federal Reserve or the nation’s banks to testify.

Henry Paulson, the Treasury secretary under former President George W. Bush, repeatedly stiff-armed the panel. Timothy Geithner, the current secretary, has been more open, but so far has testified just once before Warren’s group. Geithner is scheduled to appear again in September, and has agreed to do so quarterly, and two other senior Treasury officials also have appeared.

The relative lack of testimony from top officials, however, is one reason why critics of Warren’s panel think it hasn’t delivered on its promise.

In June, in an otherwise mundane congressional hearing, Republican Rep. Kevin Brady of Texas surprised Warren with an aggressive critique of the panel, saying it’s failed to help taxpayers understand what Treasury is doing with the billions at its disposal.

“There’s been very little value that the panel has brought to this issue or even insight on how these bailout dollars have been used,” he said. Warren defended the panel’s work, saying the lack of subpoena power means we “only have the capacity to invite” witnesses.

The other primary watchdog is Neil Barofsky, a special inspector general named in November by Bush specifically to track TARP funds. His office does have subpoena power, and a growing staff that’s expected ultimately to have 160 people pursuing audits and criminal investigations.

It’s also made recommendations to the Treasury, asking that it do more to reveal how TARP money is being spent. Treasury has adopted some of them, but rejected others — including one of the most important: Giving taxpayers details on how TARP funds have been used by banks

Bigger Than Madoff

By Chris Edwards and Tad DeHaven

National Review – link

July 15, 2009.

Every year, criminals and cheats pilfer over $100 billion — that’s $40 billion more than Bernie Madoff scammed off his investors — in federal benefits to which they are not legally entitled. Medicare, Medicaid, food stamps, refundable tax credits, and many other programs are targets for looting. 

Government fraud has been in the news lately because analysts are expecting major abuses of the Obama administration’s $787 billion stimulus plan. One Deloitte expert argued that “swindlers, con men, and thieves could siphon off as much as $50 billion” of stimulus funds, which are vulnerable because policymakers are under pressure to shovel it out the door quickly. 

Even more troubling is the potential for fraud and abuse created by President Obama’s other big spending proposals — particularly his giant health-care plan. Obama wants to inject hundreds of billions more tax dollars into federal health care instead of fundamentally reforming Medicare and Medicaid — broken programs that are already subject to Madoff-sized larceny. That is incredibly unfair to those of us paying the bills.

Take Medicare. The Government Accountability Office reports that the program makes about $17 billion in improper payments each year. And that doesn’t include problems in the new $60-billion-per-year prescription-drug plan, which is a juicy target for criminals. Harvard University’s Malcolm Sparrow, a specialist in health-care fraud, recently testified to Congress that official estimates are “lacking in rigor,” are “comfortingly low and quite misleading,” and exclude many kinds of fraud and abuse. He thinks that as much as 20 percent of the federal health-care budget is consumed by fraud, which would be $85 billion a year for Medicare.

Medicare makes a staggering 1.2 billion electronic payments each year, making it highly vulnerable to cheating by health-care providers and organized-crime rings. Criminals need only fill out the government forms carefully and the “claims will be paid in full and on time, without a hiccup, by a computer, and with no human involvement at all,” according to Sparrow. A perfect example is the recent case of a high-school dropout in Miami who was able to single-handedly bilk Medicare out of $105 million from her laptop by submitting 140,000 separate claims for equipment and services. 

Medicaid is also a huge abuse target. The GAO puts Medicaid fraud at $33 billion — 11 percent of state and federal spending on the program. Again, that is likely a substantial underestimate. A former Medicaid investigator believes that up to 40 percent of New York State’s Medicaid budget is siphoned off in fraud and improper payments, but New York probably has a worse problem than elsewhere. Using Sparrow’s 20 percent estimate instead, Medicaid rip-offs top $60 billion a year nationwide.

How does all this fraud and abuse occur? In many ways, including billing for services and medical equipment not provided, misrepresenting the services provided, and double billing. That last one is common. In one recent case, the University of Medicine and Dentistry of New Jersey double-billed Medicaid repeatedly over the years by directly submitting claims for outpatient physician services, even as doctors working in the hospital’s outpatient centers were submitting their own claims for exactly the same procedures. 

Another trouble spot is Medicaid’s nursing-home benefits, which are meant for people with low incomes and few financial assets. Since nursing homes are expensive, the program creates a big incentive for higher-income families to falsify their status and apply for the benefits. Indeed, a whole industry of financial consultants helps ineligible seniors hide their income and assets so that they qualify. The result is that the program loses about $10 billion a year to fraudulent claims.

The bottom line is that the enormous size and complexity of federal health programs results in a huge waste of taxpayer funds. The inspector general of the Department of Health and Human Services recently told Congress: “Although it is not possible to measure precisely the extent of fraud in Medicare and Medicaid, everywhere it looks the Office of Inspector General continues to find fraud against these programs.”

Medicare and Medicaid are the biggest fraud targets, but this problem plagues all government subsidy programs. Official loss estimates for other programs include: $12 billion for the Earned Income Tax Credit, $5 billion for Supplemental Security Income, and $14 billion for unemployment insurance. All in all, the cost to taxpayers is well over $100 billion a year, which translates into a theft of $1,000 or more from every household in America every year.

We think that there are good policy reasons to dramatically cut Medicare, Medicaid, and other benefit programs. But at the very least, the vast magnitude of graft in these programs should give every policymaker pause before pumping even more taxpayer money into the federal subsidy empire. 

— Chris Edwards is the director of tax-policy studies at the Cato Institute and co-author of Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It. Tad DeHaven is a budget analyst at the Cato Institute.