Medicare and Medicaid

Medicare and Medicaid are overwhelmed in their efforts to keep pace with, much less stay ahead of, profiteers who are bent on cheating the system. Both health programs have weak fraud and abuse prevention programs. Specifically, the programs (1) have strong incentives for providers to overprovide services, (2) suffer from weak fraud and abuse controls to detect questionable billing practices, and (3) impose few limits on those that may bill--companies using post office box numbers have qualified to bill the program for virtually unlimited amounts. Further, profiteers have little chance of being prosecuted or having to repay fraudulently obtained money. Many cases are settled without conviction, penalties are light, and providers often remain in business.