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Government 'Cops' Know They Can't Protect You From This...

March 12, 2011 | 50,582 views

By Dr. Mercola

Health Care FraudInstead of fading away over the years, the business of defrauding the government of billions of dollars annually is not only  still going strong, but is increasing, according to the most recent report from the Health Care Fraud and Abuse Program.

And Baby-Boomers beware: You're not only at the top on the list for fraud and abuse, but for medical errors as well. Meanwhile, certain parts of health care reform from the government level appear to be more rhetoric than action.

Over-Pricing, Fake Claims and Mismanaged Care

From over-pricing and false claims for medical services, to gross misconduct and mismanaged care of senior citizens in nursing homes, the pharmaceutical industry leads the pack in health care fraud and abuse. It's been that way for decades. That's why the U.S. government has repeatedly enacted new laws – in 1986, 1996, 2009, and 2010 – to crack down on offenders.  

The 1986 legislation strengthened a Civil War-era fraud law, the False Claims Act, with incentives for private citizens to report fraud and abuse of government programs by corporate America.

This law enabled "whistleblowers" to expose corporate criminals whose crimes had previously gone undetected.  But it didn't stop these crimes, so, in 1996, Congress created another enforcement tool, the Health Care Fraud and Abuse Control (HCFAC) program, which provides for huge fines and prison sentences for health care fraud and abuse.

Enacted with the passage of the Health Insurance Portability and Accountability Act (HIPAA) and administered jointly by the Department of Justice (DOJ) and Health and Human Services (HHS), this program has returned over $18 billion to the Medicare Trust Fund since 1997 – most of which came from pharmaceutical companies.

It, too, rooted out still more previously undetected corporate criminals, as well as those committed by individuals, hospitals and other health service providers. But still, the fraud went on. So, in 2009, Congress enacted another enforcement tool under the Affordable Care Act and the formation of the Health Care Fraud Prevent & Enforcement Team (HEAT).

The HEAT team has been incredibly successful: in 2010 alone, the DOJ and HHS reported that they transferred $2.86 billion to the Medicare Trust Fund – out of a total of $4 billion collected – as a result of judgments and settlements involving Medicare.

That's up from the $2.51 billion they recovered for the Medicare Trust Fund in 2009, and is the highest amount ever recovered from people and corporations who attempted to defraud seniors and taxpayers.

But despite stiff civil and criminal penalties, including fines and possible prison sentences, the fraud continues: judging from an announcement January 24, 2011 by HHS Secretary Kathleen Sebelius, the agencies plan to recover an even greater sum for Medicare this year.

The bulk of these funds are from drug companies, making the pharmaceutical industry the new government fraud leader, surpassing the former top fraud perpetrator, the defense industry  That's why HHS and the DOJ decided in 2010 to form yet another committee to address just drug company crimes.

The FDA is helping with this program, the Pharmaceutical Fraud Pilot Project (PFPP), with the goal of rooting out pharmaceutical, biologic, and medical device fraud.

In only a few months, the PFPP already has at least six active investigations on its agenda, focusing on fraudulent marketing or promotional schemes, application fraud, clinical trial fraud, and manufacturing-related violations, as well as alleged falsification of data.

While I'm leery of just how well the FDA can perform this added responsibility when it is already notorious for not being able to manage or properly oversee its present programs, I think one point is abundantly clear:

The fraud and deceit against Medicare by Big Pharma is still so great that no amount of anti-fraud agencies seem capable of stopping it.

What's interesting is that many drug corporations are repeat offenders According to Public Citizen, a non-profit organization that challenges the practices of many industries, including the fact that pharmaceutical cases accounted for at least 25 percent of all federal False Claims Act:

More than one-half of the industry's fines (for fraud against the federal government in the past 20 years) were paid by just a few companies — GlaxoSmithKline, Pfizer, Eli Lilly and Schering-Plough…. paying $10.5 billion in fines collectively.

Is it any wonder then that some of the drug companies repeatedly caught defrauding the Medicare system are also listed in AllBusiness.com's "Top Corporate Criminals of the 1990s"?

Collectively over the years, just six of these corporate criminals – Pfizer, GlaxoSmithKline (GSK), Baxter, Merck, Roche and Johnson and Johnson – have paid more than $18 billion in criminal and/or civil fines and judgments for such things as price-fixing, overcharging, and illegal sales activity.

And it looks like 2011 will be another record year for at least one of these repeat offenders, with GSK already setting aside more than $5 billion to cover the costs of litigation involving its marketing and manufacturing practices, product-liability lawsuits and other matters.

Physicians, private clinics and hospitals also contribute to health care fraud against seniors and Medicare. But since their income is limited compared to drug companies, it's hard to believe that they, too, apparently have not been dissuaded by the fraud crack-downs, and are increasingly being charged with defrauding Medicare of millions of dollars every year.

You can read a list of sample fraud cases that the government settled in 2010 here.

Following is a compendium of less-than-effective drugs and severe adverse events that the government discovered in its investigations into senior care.

Nursing Home Care Continues to be Sub-Standard

The review of conditions in facilities for persons who have mental illness, facilities for persons with developmental disabilities, and nursing homes comprises a significant portion of the HCFAC program. In 2010 HCFAC investigators completed reviews at six health care facilities in five states. It continued investigations of 71 heath care facilities in 25 states, the District of Columbia, the Territory of Guam, and the Commonwealth of Puerto Rico.

The 2010 report contains citations of dozens of violations committed by dozens of various health care facilities for mentally and developmentally disabled persons, as well as senior citizens.

And sadly, even though the Government Accounting Office established a special program in 1998 to bring nursing home performance up to higher standards, the GAO reported in March 2010 that while the poorer-performing homes were "progressing," they still needed work.

In a letter to the Senate's Special Committees on Aging and Finance, the GAO said that the nation's 1.4 million nursing home residents are "a highly vulnerable population of elderly and disabled individuals who rely on nursing homes to provide high-quality care."

If you're wondering just how badly some of those nursing home residents have been treated while the homes themselves defraud the government, the 2010 HCFAC report gives this example:

  • In January 2010, five nursing homes in Texas pled guilty to felony health care fraud and failure to provide adequate care to the residents. Some of the offenses these homes committed included failure to provide wound care, failure to deliver medication, falsifying medical records, and fraudulent claims to Medicare for services that were sub-standard or not provided at all.

When the government investigated nursing homes nationwide in 2008 specifically for quality of care, they found that, in addition to falsely billing both Medicare and Medicaid:

  • 94 percent of nursing homes were cited for violations of federal health and safety standards during the previous year;
  • About 17 percent had deficiencies that caused "actual harm or immediate jeopardy" to patients;
  • Problems included infected bed sores, medication mix-ups, poor nutrition, and abuse and neglect of patients;
  • For-profit facilities were more likely to be violators than not-for-profits.

State by state, you can find other examples of how nursing homes take funding without delivering the services to these fragile individuals. For example:

  • In California, an investigation found that 232 nursing homes either cut staffing, paid lower wages, or let caregiver levels slip below state-mandated minimum levels – after the state increased the amount of per-patient reimbursement!
  • In 2009 the GAO reported that Indiana has the greatest number of "poorly performing" nursing homes, with chronic understaffing, especially at for-profit facilities; failure to apply $700 million in quality assessment fees to actual quality improvements; and long waiting lists at high-quality facilities just part of the problem.
  • In Florida, where many seniors go to retire, and often end up in nursing homes – abuse reports and investigations of various nursing homes found such things as patients sitting in urine or feces for hours on end; and in one instance, found maggots in a patient's eye socket!

But before you decide that maggots on a patient are a rare event, know that across the U.S. in the past couple years, maggots have also been found in nursing home patients' wounds, groins, and ears in Maine, Oklahoma, Pennsylvania, Tennessee, Kentucky, and Illinois!   

It's no wonder that the National Center on Elder Abuse (NCEA), in conjunction with the National Association of State Units on Aging (NASUA), decided it was time to get together to compile a checklist to help nursing homes improve beyond the guidelines already being monitored by the GAO.

More than 1 in 7 Adverse Events for Seniors

If you think seniors who live independently have access to the best care, think again – sometimes it's government rules themselves that harm patients in nursing homes. For example, this story from the New York Times tells how senior patients are denied timely administration of pain medication because of new Drug Enforcement Agency rules.

Unfortunately, pain is only a small part of adverse events that seniors experience due to inadequate or neglectful care.

A study in October 2008 focusing on Medicare recipients showed that 1 in 7 senior patients were harmed as a result of medical care in hospitals. A review of the records showed that 44 percent of those mistakes were preventable. That's correct: 1 in 7 senior patients are harmed in hospitals – the very place where you would expect to be safe! Additionally, according to the CDC, hospitals annually are also responsible for:

  • 1.7 million hospital-acquired infections (HAI) that patients get during the course of treatment for something else, with:
  • 1 out of every 20 patients ending up with an HAI; translating into:
  • 99,000 deaths every year due to HAIs; and costing
  • $26 to $33 billion in excess health care costs

The types of infections include urinary tract, blood stream and pneumonia from devices used on various parts of the body, and infections related to procedures such as surgeries. These infections annually tally up to:

  • 560,000 urinary tract infections causing 8,000 deaths
  • 250,000 bloodstream infections causing 31,000 deaths
  • 250,000 cases of pneumonia causing 36,000 deaths
  • 290,000 surgical site infections causing 13,000 deaths

And that's just a summary of the adverse events that can come from a hospitalization.

The Costs of all These Mistakes and Mismanagement is in the Tens of Billions

I admit it's easy to point out what's wrong with health care when injuries and deaths are involved, and when the cost of these lives is immeasurable.

But health care fraud is not a victimless crime, either. Whether it's a pharmaceutical company caught over-charging Medicare for a drug, or a private physician padding his books with patient services he couldn't possibly have had time or resources to perform, we all pay in the end because anyone who's ever worked a day in their life has paid into Social Security, and therefore into Medicare.

The 2008 study showed that all these mistakes cost Medicare an estimated $324 million in October 2008 alone! And, 16 percent of the sample beneficiaries experienced additional Medicare costs as a result.

"The added costs equate to an estimated 3.5 percent of Medicare's expenditure for inpatient care during October 2008," the study said.

"To give these figures an annual context, 3.5 percent of the $137 billion Medicare inpatient expenditure for FY 2009 equates to $4.4 billion spent on care associated with (adverse) events.

"Two-thirds of Medicare costs associated with events were the result of entire additional hospital stays necessitated by harm from the events. Additionally, these Medicare cost estimates do not include additional costs required for follow-up care after the sample hospitalizations."

When you consider that pressure ulcers alone cost $8.5 billion annually, it's criminal not to call for immediate reform in the way health care is delivered in the U.S – especially since officials say the Medicare Health Insurance plan will run out of money in 2016.

The CDC says there are three ways to address this coming crisis: an immediately raise in payroll taxes by 134 percent; a reduction of benefits by 53 percent; or a combination of the two.

A "blueprint" for reformed health care compiled by the Center for American Progress and the Institute on Medicine as a Profession also suggested a myriad of ways to improve health care beyond the financial crisis. But unfortunately, that blueprint doesn't include changing the paradigm in which health care is delivered – and that is the paradigm of treating illness, rather than preventing it.

It's true that President Obama pushed preventive health care with the passage of the 2009 health care law. But the kind of "preventive care" that he and other health service professionals keep talking about are tests to discover illnesses and diseases in their early stages, not true prevention as in ways to keep from getting sick in the first place.

So, essentially, the blueprint for health care change, whether it comes from the Center for American Progress, or HHS and the President, is more rhetoric than action.

In my opinion, a true blueprint for better health care would include a wholistic approach to health and wellness, such as:

To optimize the health benefits of this blueprint for health, I also recommend learning to incorporate juicing into your food plan.

While this isn't an end-all, comprehensive list of ways to live a more healthful life, it is a good beginning for outlining a healthy lifestyle that can truly prevent illnesses and diseases associated primarily with aging, such as cancer, diabetes, heart disease and rheumatoid arthritis.

But no matter how old you are, if the federal government were to implement  only a few of the strategies I've outlined here, this nation would be well on its way to both optimum health and better health care – and to seeing a true cost-savings when it comes to illness prevention, rather than treatment.

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