Medicare’s Low Administrative Costs Strike Again

Conn Carroll /

As we’ve documented before, one of the major selling points liberals deploy when arguing for socialized medicine is how much government run health care will save Americans in administrative costs. And it is true: Medicare does not spend nearly as much on oversight as private insurance does managing claims. But that lack of oversight comes with its own steep price tag: fraud. Congressional Quarterly reports:

Nearly half of the 491 South Florida medical equipment companies kicked out of Medicare in 2007 on suspicion that they were fraudulent were let back into the program within a year, according to a report released Friday.

In January 2007, the government kicked 491 south Florida DME suppliers out of Medicare after inspectors found that the companies either didn’t have physical facilities, weren’t open during regular business hours, didn’t have a visible sign outside their locations or didn’t post hours of operation.

Within months, 243 of the companies had appealed to Medicare to be let back into the program. Ninety-one percent of the appeals were granted, the inspector general found. One of the three officials who conducted the appeals hearings granted all 54 appeals he considered.

But by March 2008, 148 of the companies that had been let back into Medicare were again kicked out. And people connected to 15 of the companies had been indicted for fraud, according to the report.

The report concludes that so many of the companies were let back into Medicare because there are no criteria for the kinds of evidence a business must produce to prove its legitimacy. The companies gave hearings officers evidence including photographs of their buildings, driver’s licenses, invoices, affidavits, leases, business cards, bank statements, employee time sheets and even a delivery receipt from a bottled water company.