Politics & Policy

The Facts about Medicaid Fraud

(Photo Illustration: NRO; Image: Dreamstime)
A breathtaking campaign of thievery

‘Waste, abuse, and fraud.” These are the words politicians say when you ask them what it is they would cut to balance the budget. If they’re really wonky, they might add “duplication.”

I have put the question to dozens of politicians over the years, and have rarely received anything like an honest answer. That’s because the honest answer is unpopular: We have to cut Social Security and Medicare spending modestly and military spending significantly, and we’ll probably have to raise some taxes, too, or at least forgo the tax cuts that politicians of both parties habitually promise.

“Waste, abuse, and fraud,” W.A.F. I call it WAFfling.

We are not going to waffle the deficit away.

But we might waffle away a third of it.

The federal budget deficit in 2015 was $439 billion; that’s down about two-thirds from where it was in 2010. For all those radio ranters and cable-news mouthholes asking what electing Republicans ever has accomplished, there’s your answer. (Oh, and the fact that Michigan is a right-to-work state, that the First and Second Amendments survive, and, come to think of it, a bit more.) Change happens slowly (if only there were an Anglo-American political philosophy dedicated to gradualism!), but it happens, and that’s how it happens. There are no permanent victories in politics, however, and the deficit is expected to creep up this year, and then to rise steeply in the future if the major entitlements are left unreformed and allowed to become supercharged drivers of deficit spending.

RELATED: Medicaid Doesn’t Alleviate Poverty — So Why Do We Keep Spending More On It?

Which brings us to the criminal — and I do not use the word figuratively — administration of Medicaid by the Obama administration.

In September, the Department of Health and Human Services sent out a warning that improper payments under Medicaid have become so common that they will account this year for almost 12 percent of total Medicaid spending — just shy of $140 billion. (Total improper payments across federal programs will come to about $139 billion this year, according to estimates that have proved too generous in the past, and almost all of that is Medicaid-driven.) That rate has doubled in only a few years, driven mostly by the so-called Affordable Care Act’s liberalization of Medicaid-eligibility rules.

12 percent in improper payments isn’t an error rate — it’s a malfeasance rate.

I used to work the late shift at a Burger King across the street from a cowboy bar, which ensured a festive atmosphere after last call, and when the manager settled up the books at 4 a.m., he did not expect us to be accurate down to the last penny. There might be a 1 percent or 2 percent variation from mistakes in counting out change or the like. I once got called into the manager’s office because my till was short some suspiciously round number, like $20, and they were on the verge of either going through my pockets or firing me when someone discovered where the mistake had been made.

Twenty bucks is an error. $140 billion is — pardon my English-major math — about 7 billion times worse an error. And 12 percent in improper payments isn’t an error rate — it’s a malfeasance rate.

But Burger King has standards. The Obama administration does not.

#share#Some perspective: We’re spending more than seven times as much on improper, illegal federal payments as we do on NASA. We’re spending nearly 20 times as much on improper, illegal federal payments as we do on the National Science Foundation. We could build 13 Ford-class aircraft carriers every year for what we are spending on improper and illegal payments driven by Obamacare. We’re spending twice as much on improper and illegal payments as it would cost to pay all the tuition costs of every American college student. (Not that having Uncle Stupid do that is a good idea.) If improper and illegal federal payments were an economy of their own, that economy would be bigger than Hungary’s and and more than twice the size of Guatemala’s.

That’s a big waffle.

Question: Who is getting fired over this? Who is going to jail? What, if anything is being done.

Answer: “ . . . ”

No, that’s okay, I’ll wait.

“ . . . ”



The Obama administration is not lifting a pinky to do anything about this, even though analysts such as John Hood have — for years — been arguing that it is necessary and possible to reform this mess. As the Wall Street Journal has reported, we don’t even verify that doctors billing Medicaid for services rendered are actually doctors. In many cases, we do not do much to verify that their patients actually, you know, exist. We’ve paid untold billions of dollars to “clinics” that turn out to be little more — or nothing more — than post-office boxes and prepaid cell phones.

And as bad as that 12 percent rate is, some policy scholars believe that it is in fact probably worse.

#related#As I have argued at some length, the real problem with the welfare state is not the poor people receiving checks — it’s everybody in the middle, the vast array of government employees, their union allies, contractors, and third parties who earn six-, seven-, eight-, or nine-figure paydays taking their cuts of money we think we’re spending on the poor. This is an enormous criminal conspiracy against the American people and the public fisc.

And what’s the Obama administration been doing? Hiring behavioral-science experts to get more people hooked on government programs. Kurt Vonnegut couldn’t have thought this up.

Waste, abuse, and fraud? In Washington, that’s not a set of problems — it’s a career path. 

— Kevin D. Williamson is National Review’s roving correspondent.


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