The “Dead Doctor” Scam: How Medicare and Medicaid Lost $70 Million In Fraudulent Claims

Most people envision Medicare or Medicaid fraud as a pharmacist billing for name brand prescriptions while dispersing the generic version, or a doctor inflating the cost of his services to bring in a few extra bucks.

Unfortunately, another type of Medicare and Medicaid fraud exists—and it’s one that took the Centers for Medicare and Medicaid Services (CMS) 7 years to put a stop to.

A subcommittee report issued by the Senate Homeland Security and Government Affairs Investigations Subcommittee on Tuesday revealed CMS has paid out more than $70 million between 2000 and 2007 for durable medical equipment that used the personal identification number of a deceased physician.

In response to the discovery, CMS deputy administrator, Herb Kuhn, assured government officials that the agency is working on a new system to stop fraudulent billing from “dead doctors”.  Apparently, the proposed system will require doctors to use a new National Provider Identifier, which will automatically cross check death records from the Social Security Administration database.

In addition, Kuhn told Subcommittee Chair Carl Levin (D-Mich.) that while the stolen funds have yet to be recovered, the agency plans to withhold future bonuses for companies found to be involved in the scam.

Withhold future bonuses?

I would hope that CMS would conduct an audit and prosecute every single company that participated in the dead doctor scam.  Patients are denied funding every day under Medicare and Medicaid because of budget constraints.  These scammers essentially stole from sick people who could have used that money to buy medicine, etc.

In addition, CMS should receive a complete administration overhaul for waiting so long to address this problem.  A few sources suggest that CMS may have known of the dead doctor scam as early as 2001—which is completely unacceptable in my opinion.

I think subcommittee ranking member Norm Colman (R-Minn) sums up the dead doctor scam the best: “We live in a high tech world…Surely we should have the capacity to figure out if doctors are dead.”

I totally agree.

Related Information:

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