Every day you shave or powder your face in the mirror, put on a smile, and head out to make the doughnuts. But, what if you could get paid for doing nothing? And not just get paid, but earn millions? That’s precisely what fraudsters are doing every day in America. And, who are the dummies paying these deadbeat crooks? Here’s the punch line – it’s you and me, my friend. Individuals and organized crime are cleaning up stealing from Uncle Sam – and all of us.
Calling in Sick?
As America ages, we’re addicted to ever more expensive healthcare. We spent 17 percent of GDP on tests and remedies – that’s $2.7 trillion – just last year. Uncle Sam spends $415 billion and $600 billion each year on Medicaid and Medicare, respectively. In 2012, Donald Berwick, one time head of CMS, examined the patient for fraud fever. His diagnosis, the disease adds $98 billion to Medicare and Medicaid – and $272 billion to national healthcare costs.
How? Everything from billing for phantom wheelchairs and pushing prescription drugs on the street to Lazarus’ ambulance use and good-old-fashioned overbilling.
Not to be outdone, tax scammers are turning the IRS into an ATM. Hang onto your hat – or wallet – for these stats. Each year, the IRS receives 145 million tax returns – 75 percent want refunds. TIGTA estimated that the IRS paid refunds to 1.5 million fraudsters in 2011. The top five domestic addresses received 4,900 refunds. Heavens above, IRS paid 655 refunds to a single address in Lithuania. Between January and September of last year, IRS identified 170,000 fraudulent returns filed by prison inmates.
How? Identity theft – filing tax returns for innocent victims, and collecting the refund checks.
Welcome to Miami?
Miami is the healthcare and tax fraud capital. It generates fake tax returns at 40 times the national average. Is it the sunshine or the orange juice? Neither, Miami’s hot because of the old folks. Lots of medical bills, loads of folks who have a social security number but do not file a tax return, and yes, lots of dead people.
What’s This to IT?
The $80 billion Federal IT budget is dwarfed by fraud. Further, Capitol Hill understands and cares about fraud. Folks like Gary Cantrell, an investigator at HHS, have demonstrated the power of analytics to ferret out fraudsters – returning $8 for every $1 invested. But, in D.C. it’s not about RoI, it’s about Return on Political Capital – RoPC.
Rather than sell the cost savings of cloud, perhaps we should focus on the ability to level stovepipes and bring data together across the government to catch cheats? There is no national repository for Medicaid data, which lives in each state. Put Federal apps in the cloud and question farming will yield new insights and massive savings.
Stealing From Uncle Sam
Want to learn more? Attend our Stealing from Uncle Sam: Fraud, Waste, & Abuse forum at the Newseum on November 19 – don’t worry, this isn’t a how-to tutorial. Join Senator Carper (D-De), Chairman of the Senate Homeland Security and Government Affairs Committee; Gary Cantrell, Deputy Inspector General for Investigations at HHS; Dean Silverman, Director, Office of Compliance Analytics at IRS; and Marshall Presser, Field Chief Technology Officer at Pivotal.
Free for government – this program’s a steal. Register today.
What do you think the governement should do with the $272 billion stolen in healthcare cost?
*Special thanks to the Economist Magazine for the inspiration and many of the data points.