The IT Absurdities of Health Care Reform

Michael Vizard

Once in a while you come across the juxtaposition of two news stories and you can't help but be left wondering just who is minding the store these days.

The first story was a report from the CBS television news magazine "60 Minutes" about the billions of dollars being lost due to Medicare fraud. It turns out that the state of Florida is home to some of the most flagrant case of Medicare fraud in the country.

The FBI is apparently on the case, and the people who run Medicare say they don't have enough auditors to catch all the perpetrators, who basically have only to set up a storefront address somewhere and then start filling out the paperwork. Because the law says that such claims must be quickly processed, nobody apparently has enough time to verify any of the paperwork. The result is enough waste to probably pay for the cost of health care reform multiple times over.

But if that's not enough to raise your blood pressure about the competency of the federal government, consider this: IBM yesterday announced that comparatively tiny Alameda County in the state of California is saving $11 million a year using IBM analytics software to identify and reduce social services fraud. That basically means that a local county has been able to accomplish something the federal government has been unable to do.


As part of the federal stimulus package, money has been set aside to fight Medicare fraud, but it's a relatively small number given the size of the task. But then again, we're already spending trillions of dollars on health care, so maybe we could find a way to repurpose some of that money to fight fraud.

Of course, if every county in the United States could save as much money proportionately to its population as Alameda by making some modest investments in IT, it would probably meet the health care funding requirements of every citizen and illegal alien in the country. But when it comes to IT, the federal government has clearly shown that it is mostly inept. The only thing sadder, unfortunately, is that the health care industry isn't much better.

In the meantime, the country is treated to a daily round of health care follies emanating out of Washington that, by and large, are beside the point. Almost everybody can see that we desperately need some type of health care reform. The problem is that instead of making better use of the money we're already spending badly, we seem intent on spending more money than ever in order to fix something that, based solely on the amount of money being wasted, is already extremely well funded.

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Add Comment      Leave a comment on this blog post
Oct 27, 2009 12:56 PM CMS Info CMS Info  says:

I'm surprised that no one at Medicare has mentioned the MMSEA Section 111 reporting or Medicare Insured Reporting that was passed in late 2007. It's coming to fruition this year. I believe the estimated savings is in the billions.


All medical claims processed by a Group or Non-Group Health Plans where the claimant is a Medicare Beneficiary will be reported to Medicare. There's alot of detail in the report, cause of injury, settlement payments, Ongoing Responsiblity for Medicals, etc. Basically insurance companies and self-insured organizations are sending to Medicare everything Medicare needs to determine if a claimant is attempting to get paid twice or information they can use to deny claims if it's determined that Medicare is the secondary payer. If you follow the language in the legislation the fines for failing to report claims are huge, $1000 per day per claim.

The Group Health Plans are already reporting. The Non Group Plans start reporting next year. It's a huge deal in the insurance industry and in IT organizations everywhere.


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