Some Beneficiaries’ Poor Health Outcomes Are Linked to Medicare Fraud & Abuse

We often think of Medicare fraud and abuse in terms of tax payer dollars lost and as a significant financial drain on the Medicare program. Indeed, it is, as an estimated $30-$140 billion are lost to Medicare fraud each year. Yet, a recent study published in JAMA Internal Medicine, shows that Medicare fraud may also have a significant impact on the wellbeing and health outcomes of beneficiaries.


In this retrospective cross-sectional study, researchers tracked down the records of fraud and abuse perpetrators (FAPs) and the health records of the beneficiaries they “treated” in 2013. They compared the data with similar beneficiaries who were not treated by FAPs. The findings are disturbing and point to another important focus for health policy in curbing Medicare fraud: that of protecting the health, safety and wellbeing of our country’s close to 60 million Medicare beneficiaries.


For example, in looking at the data on FAPs alone, researchers found that of the physicians barred from the federal Medicare program, 46% were barred primarily because of compromising patient health and safety. They found that many of the physicians prosecuted for fraudulent billing of unnecessary and/or unsanctioned services also put patients’ wellbeing at risk. Some of the fraud cases the researchers found included those “resulting in the patient’s death after: untrained workers read radiographs and failed to detect lethal findings; distribution of opioids and unsafe or counterfeit medications; and provision of lucrative but medically contraindicated procedures” (such as giving chemotherapy to patients with no cancer).


After comparing the data in this retrospective, cross-sectional study, researchers found that exposure to known FAPs may have caused 6,700 additional premature deaths among Medicare beneficiaries in 2013. In terms of cost, the study estimates the related loss of 98,500 life-years attributable to those deaths at roughly $5 billion to $15 billion in addition to the estimated $30 billion to $140 billion fraudulent or abusive activities cost Medicare directly.


While additional studies are needed to pin point the specific types of fraud and abuse most likely to produce poor health outcomes so that policymakers can target them as investigative priorities, this recent JAMA study begins the process of quantifying the additional harm fraudulent Medicare practitioners can do to beneficiaries. This quantification and finding alone should hopefully motivate the Centers for Medicare and Medicaid Services (CMS) to find, persecute and remove these perpetrators from the federal health care system as quickly as possible.


Indeed, we at California Health Advocates and our California Senior Medicare Patrol (SMP) agree wholeheartedly with the recommendations study author, Lauren Nicholas, Ph.D. gave in a recent interview with FierceHealthCare. Nicholas, who is an assistant professor in the Department of Health Policy and Management at the Johns Hopkins Bloomberg School of Public Health, advised that CMS start “identifying and removing FAPs more rapidly to protect the health of Medicare and Medicaid beneficiaries. The health and mortality consequences should be taken into account when decisions about how to pursue fraud and which providers to target are made.”