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Sheer Number Of Claims Opens Door To Billing Fraud

By the time you finish reading this sentence, about $3,650 in Medicare money will have disappeared due to fraud, waste or abuse nationwide.

About $23.2 billion in taxpayer money is lost every year - $16 million a day, or 14 percent of all Medicare costs.

That’s a large chunk of the more than $100 billion in health-care dollars the government estimates is misspent every year, including money from Medicare, Medicaid and private insurance.

Opportunities for fraud are nearly endless in the byzantine world of Medicare, the federal program that pays the health-care bills of people over 65 and the disabled.

More than 800 million Medicare claims were processed last year, or more than 1,500 a second.

There are hundreds of payment codes. Thousands of doctors. Millions of pieces of paper. And many ways to cheat the system.

There’s overbilling. There’s unbundling, where one item, such as a wheelchair, is billed as many separate parts. There’s upcoding, where someone bills for a higher, more costly level of service than necessary.

Fraudulent entrepreneurs pay kickbacks and inducements to companies or other providers for patient referrals. They provide inferior products to patients. They falsify claims and medical records to certify someone for benefits. They bill for nonexistent patients or services.

“The bulk of providers are honest, upright, high-quality professional providers,” said Dave Haffie, who leads the fraud unit at the Health Care Financing Administration’s Seattle office. “The few that aren’t can generate high abuses and paint their professions with a negative color.”

In 1993, Attorney General Janet Reno named health-care fraud as the Department of Justice’s No. 2 enforcement priority - right behind violent crime.

The FBI has tripled health-care fraud investigations from 657 in 1992 to 2,200 in 1996. Civil fraud investigations leaped even more, from 270 in 1992 to 2,488 in 1996.

Some honest providers worry that aggressive anti-fraud efforts may be having an unintended effect - underbilling.

“People are afraid of doing something wrong,” said Dr. Emil Paganini, an expert on Medicare billing for kidney treatment. “And they recognize if they’re doing something wrong, they could get caught. They would prefer to underbill than fraudulently overbill.”

, DataTimes ILLUSTRATION: Graphic: Health-care fraud cases nationwide