Growth of Medicare Frauds

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I’m going eventually to explain why I think that government administration of Medicare (and other similar programs) is so rife with fraud, but to build up to that it’s useful to get a feel for what kinds of fraud we are talking about and who commits them. In that way, we can understand their circumstances and begin to understand why Walmart can control frauds against the company but the U.S. government cannot control frauds against Medicare. If you took the Walmart executive team and placed it in command of Medicare, it could not do significantly better than the Medicare bureaucrats. It certainly could not devise a cost-effective system to reduce fraud to the level that Walmart experiences.

Medicare started in 1965. It took time for the frauds to get going, and it took time before they broke into the newspapers. Frauds are a form of enterprise, an undertaking of some complexity, an industrious and systematic activity. It is criminal enterprise in that it’s theft by devious means other than burglary or robbery. (By the way, the government’s taxation theft that involves the threat of physical violence is robbery. Its promises and misrepresentations made to induce compliance that it can’t keep, does not keep, or won’t keep are frauds.) These criminal undertakings evolve over time as people invent or discover new ways to defraud, as Medicare rules create new opportunities for theft, as the technology changes, and as the government becomes larger and less able to control its growing and complex activities and rules.

9:14 am on October 26, 2012