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http://www.businessweek.com/stories/1992-12-13/a-mere-70-billion-overcharge-in-the-medical-bill-70-billion-overcharge-in-the-medical-bill-70-billion-overcharge-in-the-medical-bill

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A Mere $70 Billion Overcharge In The Medical Bill $70 Billion Overcharge In The Medical Bill $70 Billion Overcharge In The Medical Bill


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A MERE $70 BILLION OVERCHARGE IN THE MEDICAL BILL $70 BILLION OVERCHARGE IN THE MEDICAL BILL $70 BILLION OVERCHARGE IN THE MEDICAL BILL

One area the Clinton Administration is likely to focus on in its efforts to tame the medical-cost monster is insur-ance fraud and abuse. In a recent report, the Government Accounting Office finds that "vulnerabilities within the health insurance system" allow unscrupulous health-care providers, including practitioners and equipment suppliers, to cheat insurers and government programs out of billions of dollars. The most common cost estimate: a cool $70 billion a year.

In another report, the gao describes an insurance-fraud scheme, hatched in California in the early 1980s, that allegedly grew to involve hundreds of physicians and numerous medical laboratories. Initially, the so-called "rolling labs" scheme used vans to transport medical equipment to provide "free" medical tests to elderly patients and then employed doctors to certify diagnoses in bills submitted for medicare reimbursement. Later expanded to include private insurers, the scheme is said to have spawned $1 billion in fraudulent claims.

Why have such schemes succeeded? The gao notes that individual insurers can't solve the problem by themselves. It advocates the creation of a national commission representing public and private insurers, state licensing agencies, state and federal law-enforcement agencies, and other parties to focus on such issues as standardizing claims procedures, exchanging information, and developing new regulations. What's sorely needed, says the GAO, is a "collaborative approach." That's exactly the kind of advice Bill Clinton has indicated he intends to take to heart.GENE KORETZ


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