Industry Voices—What's missing from the debate about 'Medicare For All'? Combating billions in healthcare fraud

Before candidates decide whether to expand Medicare healthcare coverage, there needs to be a plan to combat Medicare fraud. (studiocasper/iStock)

It is anyone's guess who will emerge from the pack of Democratic hopefuls to take on President Donald Trump in 2020. Or what will be the driving issues that get her or him there.

But with roughly 27 million Americans still without health insurance, millions more struggling to keep it, healthcare costs continuing to soar and Obamacare still on the brink—it is a good bet expanding access to healthcare will be front and center. It might very well be the signature issue in both the primary contest and presidential face-off that follows. 

It thus is not surprising that virtually every Democratic aspirant has publicly embraced increasing the Medicare rolls in one form or another. Some are calling for a single-payer system with the government as primary provider, like Medicare is for the over-65 crowd. Others are pushing the so-called public option, where private insurance remains but with a government-backed provider in the mix.

Regardless of who gets the Democratic nod next year, it seems near-certain he or she will be exhorting an expanded government role in healthcare through some form of these "Medicare for All" or "Medicare for More" approaches to coverage.

It’s a noble quest indeed. But there is one giant pitfall no one seems to be talking about in all this. It’s an inconvenient truth that must be addressed before the government can step up its role in healthcare coverage. That is the challenge of reining in the massive fraud already wresting from the Medicare coffers tens of billions of dollars a year.

It is a figure surely set to swell to the hundreds of millions if the Medicare umbrella widens much beyond the roughly 60 million people it currently covers. No matter how compelling the pitch for universal coverage may be, unless a move toward expanding Medicare is coupled with a plan to combat Medicare fraud, it is destined to falter.

Photo of man in a suit
Gordon Schnell 
(Constantine Cannon)

The good news is there is already a powerful vehicle in place to deal with the issue. It is the False Claims Act, the Civil War-era statute originally enacted to stop scurrilous war profiteers from selling rotten food, sickly mules and defective weapons to the Union army. A century and a half later, the law has evolved into the government's main fraud-fighting tool, leading to the annual recovery of billions of dollars and the imprisonment of scores of offenders, most of it relating to Medicare fraud.

What makes this enforcement mechanism particularly potent is the statute's so-called qui tam provision. It authorizes private citizens to act as whistleblowers and bring suit on behalf of the government against the companies (and individuals) committing the fraud.

To encourage these "private attorneys general" to take action, the statute provides various protections and incentives, including a potential reward of up to 30% of any government recovery. For the past 20 years, the majority of government recoveries under the statute have originated with whistleblowers.

The bad news is even with the relative success of this public-private enforcement model, the flood of fraud against the government continues unabated, especially with Medicare. A lack of government resources is no doubt part of the problem. There is only so much time, money and effort the government has available to take on this never-ending scourge, much of it driven by some of the largest, most creative and best-funded companies in the country.  

Photo of man
Max Voldman
(Constantine Cannon)

But it is more than just a resource issue getting in the government's way. There also is an inherent aversion to whistleblowers by many in the government that interferes with the critical role they play in enhancing the government's fraud-fighting capability. Perhaps it stems from the old schoolyard mentality so many of us grew up on that nobody likes a snitch. Maybe it is the government resisting the notion it was duped or fell asleep on its regulatory watch.

Or perhaps it is as simple as agency capture or the public/private sector revolving door—of not wanting to back a whistleblower against the corporate titans that rule the industry roost or for which there may be some opportunity of future employment. 

Whatever the reason, there needs to be a change of mindset—a warmer embrace, a deeper recognition and appreciation by the government of the whistleblower as a vital resource. Otherwise, there will remain a perpetual drag on the Medicare system and a considerable obstacle to expanding it any further.

No amount of agency strike forces or special enforcement units is going to change the reality that the government cannot police fraud on its own. That is why Congress passed the False Claims Act in the first place and has acted repeatedly over the years to strengthen and expand the qui tam provisions embedded therein.

RELATED: CMS launches slate of initiatives aimed at curbing fraud, waste in Medicaid

So to all the candidates for 2020, even President Trump: Regardless of where you stand on expanding Medicare coverage, you need to bring into the conversation how to beat back the fraud. Allocating additional government enforcement resources would certainly help. But the ultimate solution lies in clearing the way for those on the front line—the nurses, physicians, coders, researchers; or in compliance, finance, administration, etc.—all too willing to say something when they see something that mugs Medicare, threatens our health and safety or otherwise rubs against their moral compass.

The False Claims Act already provides the pathway with its powerful incentives and protections for these would-be whistleblowers. What is missing is a stronger, across-the-board signal from the government, by both word and deed, that it actually wants the help and fully understands the significant sacrifice inherent in providing it. Only then will we be freely able to tackle the broader question of where Medicare goes from here.

Gordon Schnell and Max Voldman are attorneys with the law firm Constantine Cannon, specializing in the representation of whistleblowers.