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Adventures of a federal anti-fraud squad

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Column by Jim Flynn

New initiatives to eliminate fraud, waste, and abuse in federal programs are usually accompanied by expectations of significant savings just over the rainbow. Early performance reports however are subject to lengthy questioning by Congress as to why the new program isn’t accomplishing more – and faster.
One such sequence accompanied the $77 million Medicare fraud computer system which was launched last summer. In its first six months the system captured one suspicious payment and saved $7,591. The Senate Committee on Federal Financial Management said it was disappointed. We wonder whether the Senate is aware of how disappointed taxpayers are in their financial management?
Medicare says assessment of the new anti-fraud program is too soon and unfair. They say taking their other activities into account, the potential savings in the first six months could easily exceed $20 million.
The new computer system is designed to scan and analyze large numbers of claims and identify suspicious patterns before payments are made. It’s the sort of stuff intelligence agencies do with electronic communications. Banks also have screening systems which alert them to suspicious uses of customers’ debit, credit, and ATM cards.
The purpose of the $77 million dollar anti-fraud contract given to Northrup-Grumman (they make airplanes) was to discontinue the current practice of pay-and-chase, under which automatic payments are reviewed for fraud, waste, and abuse weeks after the money is spent. By the time the review is made and the chase begins the fraudsters can be sunning themselves on a beach in the Caribbean.
Last year, under pay and chase, the Department of Health and Human Services (DHHS) did recover $4.1 billion stolen or fraudulently received in prior years under Medicare and Medicaid, That’s not much when government spends $2.5 trillion annually for health care, and Medicare fraud alone is estimated to be $60 billion a year. Nonetheless, the president took a success bow at the press release.
An unspoken problem in identifying and delaying suspicious payment requests has been the Congressional directive to DHHS to make payments promptly, meaning 15 to 30 days. Now that DHHS has its new anti-fraud program, Congress expects both hurry-up payments and hurry-up recoveries. Maybe the Senate should consider passing a hurry-up federal budget, after three years without one.
Another restraint on aggressive attention to fraud, waste, and abuse is an understandable aversion of federal workers to being seen as whistleblowers, a function which is not included in their job descriptions.
In the case of the new fraud computer system we’re inclined to give DHHS the benefit of time and concede that Congress is premature in its assessment that they must have left out some zeroes. The deputy director of the DHHS anti-fraud program, a former federal prosecutor, says they’ve turned up 2500 leads and identified 600 suspicious cases. Major investigations aren’t built in a day, a week, or even six months.
Given a reasonable amount of time, there just might be a pot of gold at the end of this DHHS rainbow.