Here is the one statistic you most need to know if you are either so brave or so masochistic as to voluntarily enter into a discussion about health care fraud these days: 3% - 10%. Somewhere in the spectrum that lies between three (3%) and ten (10%) percent of health care claims is the amount of health care fraud that is perpetrated on the consumer side of the fraud equation, according to the Internal Revenue Service (and if anyone knows their numbers, you can be sure it's the IRS). That figure translates to approximately $13.5 billion, which sounds like a lot of money - and it is - but keep on reading, because we're nowhere near the big numbers yet.
First, that estimate includes more than just fraudulent claims by consumers, it also includes fraudulent claims sent by physicians' offices themselves due either to a mistake (maybe) or a systematic attempt to increase profits (more likely) in an age of overwhelming and ever-increasing insurance demands.
Second, while the government itself acknowledges that only a maximum of 10% of claims are likely to be fraudulent, even its own health care initiatives overwhelmingly treat the majority of claimants with the presumption of either mistaken eligibility or a fraudulent claim, and good luck to the consumer trying to prove otherwise. For example, the Social Security Administration "awards" an average of only 28% of initial disability claims - denying an average of 72%. Let me say that again. That's 72% of claims denied, compared to a maximum 10% fraud rate. Now you do the math.
Third, and most important to the fraud discussion, all of this financial jargon gets put into some major perspective when we actually consider the downright obscene amount of money people aren't talking about - the money attached to fraud on the corporate side of the equation.
In recent days, federal investigators have turned the spotlight toward what appears to be a repeated and systematic abuse of federal regulations by health care executives striving to further increase their already inflated profit margins, even with the rest of the country suffering a severe recession. In fact, according to ABC News, large players in the health insurance industry reportedly increased their profits by 56% in 2009 - primarily by dropping coverage for consumers. So that company that denied your claim to pay for your recent check-up tests because it couldn't be expected to pay for everyone's check ups probably made a profit in the high millions, if not billions, of dollars last year. If you're shaking your head right now, be sure to take a look through Business Insider's article, "15 Executives Who Get Paid Millions To Deny You Health Care Coverage." To give you a sense of what we're talking about here, these 15 people alone get paid between $800,000 and $38 million each per year to run health care companies with reported yearly revenues anywhere between $2.2 - $81 billion (that's billion with a "b") in 2008. If you crave more recent numbers, you can read about the top 10 most highly paid pharmaceutical executive salaries in 2010, which ranged from approximately $14 - $29 million last year (incidentally, these numbers include only salaries - no bonuses or executive perquisites which actually raise the figures significantly higher). That, my friends, is the kind of money for which people will do - and have done - just about anything.
Which is why the feds are now turning up the heat on the health care industry. Fines alone seem to have done little to dissuade health care companies from engaging in all kinds of fraudulent tactics, from promoting off-label uses of pharmaceuticals to encouraging kickback schemes, in order to increase their profit margins. Corporations have been all too happy to sign over some giant sized checks, only to pass along the cost to consumers in the form of higher prices and less coverage. Now feds are reviving a dusty statute called the Park Doctrine in an effort to hold these high powered executives personally and criminally responsible for the behavior of their companies...and the execs aren't happy about it. So in other words, they want to continue commanding salaries in the multi-million dollar range to run these companies, but they don't actually want to be held responsible for anything their companies do.
The feds say they got frustrated with repeat violations and decided to start using enforcement tools that were already on the books but had been allowed to languish. By some estimates, health care fraud costs taxpayers $60 billion a year, galling when Medicare faces insolvency.
"When you look at the history of health care enforcement, we've seen a number of Fortune 500 companies that have been caught not once, not twice, but sometimes three times violating the trust of the American people, submitting false claims, paying kickbacks to doctors, marketing drugs which have not been tested for safety and efficacy," said Lewis Morris, chief counsel for the inspector general of the Health and Human Services Department.
"To our way of thinking, the men and women in the corporate suite aren't getting it," Morris continued. "If writing a check for $200 million isn't enough to have a company change its ways, then maybe we have got to have the individuals who are responsible for this held accountable. The behavior of a company starts at the top."In other words, federal prosecutors seem to feel that the guys making muti-million dollar salaries to run health care-related companies should be held accountable for the activities of those companies. Obviously, the executives feel it is unfair to hold them personally accountable in any way, which makes a lot of sense to m...no wait, that makes no sense at all.
The example currently making headlines is that of Forest Labs, a pharmaceutical company that recently settled a $313 million lawsuit with the Department of Justice which alleged multiple fraudulent activities:
...Forest Laboratories...agreed to a $313 million settlement. The misbehavior: selling an unapproved drug, marketing another drug off-label, and lying to FDA inspectors during a visit.The settlement riled the feathers of Forest shareholders, some of which went so far as to publicly demand the resignation of CEO Howard Solomon. Federal investigators have taken the recriminations one step further, threatening to hold Solomon personally responsible for the company's actions and ban him from the pharmaceutical industry altogether. Solomon of course feels that he is being unfairly persecuted, and I for one plan on getting around to crying a veritable river of tears on his behalf just as soon as I can figure out a way to afford my own prescriptions.
The company's Forest Pharmaceuticals unit pleaded guilty to criminal charges of marketing its unapproved thyroid drug Levothroid--and ignoring the agency's warnings to stop. The plea also covers charges of "misbranding" its antidepressant drug Celexa, which basically means that it promoted the drug for off-label use. In this case, Forest pushed Celexa for use in children even though it was only approved for use in adults, an FDA statement says.
Prosecutors also say that Forest sales reps paid doctors to persuade them to prescribe Celexa and its successor drug Lexapro, giving them cash "disguised as grants or consulting fees," plus expensive meals and entertainment, such as Broadway tickets, a deep-sea fishing trip, and pro baseball tickets. Forest "expressly denies" those claims, despite its agreement to pay some $148 million to settle those and other civil complaints.
But Forest Labs is hardly a lone wolf in the pack of industrial fraud. In recent years, several health care-related companies have paid out copious settlements for wrongdoing, including (but not limited to):
- Pfizer - $2.3 billion
- Eli Lilly - $1.4 billion
- AstraZeneca - $520 million
- Quest Diagnostics - $302 million
- Boston Scientific - $296 million
- Mylan Pharmaceuticals, UDL Labs, AstraZeneca & Ortho-McNiel - $124 million
- Omnicare Inc. - $98 million
- WellCare Health Plans - $80 million
So the next time someone wants to bemoan the prevalence of health care fraud in this country, you can pull out the big guns. We have all been socialized, institutionalized if you will, into thinking of health care fraud as something lazy, impoverished people do in order to milk the system. The reality is much more insidious. There is no point in discussing health care fraud without addressing the massive profits systematically and illegally garnered by health care companies at the expense of American consumers, leaving many of us in the impossible situation of having to choose between paying for our health care or paying our rents or mortgages. After all, if we don't find a way to make it less profitable for corporations to screw the American public on such a massive scale, how effective can we ultimately expect any reform effort to be?
0 comments:
Post a Comment