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Does the Affordable Care Act CUT $716 Billion in Medicare Benefits?

Tuesday, November 18, 2014
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There have been several reports this week that Obamacare cuts $716 Billion from Medicare. Actually, the $716 billion in savings is due to eliminating waste, fraud and abuse, a huge subsidy to private insurers, and slowing the rate of growth in payments to certain providers. According to the Congressional Budget Office, providers will lose money. Not patients.

Jacki Schechner, former national communications director for Health Care for America Now:

There are NO CUTS in benefits to seniors. In fact, all the money saved goes back into health care. Some goes to help seniors pay for prescription drugs and afford wellness visits, preventive care and cancer screenings.
Some goes to fund the Medicaid expansion and insurance subsidies so the insurance companies complaining about Medicare Advantage cuts actually get the money back anyway through the exchanges.



We only have to look at one of the three savings measures - fraud, to see that massive amounts of money was siphoned from Medicare before the Affordable Care Act. For instance, 91 people were rounded up in September 2011 by the Medicare Strike force for participating in a nationwide scheme to defraud Medicare:

a nationwide takedown by Medicare Fraud Strike Force operations in eight cities has resulted in charges against 91 defendants, including doctors, nurses, and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $295 million in false billing.


What does Medicare Fraud look like from the patient's point of view?

The FBI warns of these scenarios:

Senior citizens are frequent targets of Medicare schemes, especially by medical equipment manufacturers who offer seniors free medical products in exchange for their Medicare numbers. Because a physician has to sign a form certifying that equipment or testing is needed before Medicare pays for it, con artists fake signatures or bribe corrupt doctors to sign the forms. Once a signature is in place, the manufacturers bill Medicare for merchandise or service that was not needed or was not ordered.

Other health care and health insurance scams the FBI is warning us of:

[Medicare] also provides a rich and steady income stream for criminals who are constantly finding new ways to steal a sizable chunk of the half trillion dollars that are paid out each year in Medicare benefits. In fact, Medicare fraud - estimated now to total about $60 billion a year - has become one of, if not the most profitable, crimes in America.

  • Medical Equipment Fraud: Equipment manufacturers offer “free” products to individuals. Insurers are then charged for products that were not needed and/or may not have been delivered.
  • “Rolling Lab” Schemes: Unnecessary and sometimes fake tests are given to individuals at health clubs, retirement homes, or shopping malls and billed to insurance companies or Medicare.
  • Services Not Performed: Customers or providers bill insurers for services never rendered by changing bills or submitting fake ones.
  • source: CBS News aired a fascinating segment in 2010 on fraud in Florida, entitled Medicare Fraud: A $60 Billion Crime: Check out the episode, below:
    So what can patients and concerned citizens do to help eliminate fraud? The FBI lists these actions you can take to do your part to stop the fraudulent plundering of Medicare: Tips for Avoiding Health Care Fraud or Health Insurance Fraud:

    • Never sign blank insurance claim forms.
    • Never give blanket authorization to a medical provider to bill for services rendered.
    • Ask your medical providers what they will charge and what you will be expected to pay out-of-pocket.
    • Carefully review your insurer’s explanation of the benefits statement. Call your insurer and provider if you have questions.
    • Do not do business with door-to-door or telephone salespeople who tell you that services of medical equipment are free.
    • Give your insurance/Medicare identification only to those who have provided you with medical services.
    • Keep accurate records of all health care appointments.
    • Know if your physician ordered equipment for you.
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