coburn2In a editorial placed in today’s edition of Real Clear Politics, Oklahoma’s Junior Senator, Sen. Tom Coburn, called on the federal government to address the rampant fraud in Medicare and Medicaid before seeking to reform the entire health system. A licensed medical doctor for over 20 years, Senator Coburn knows the ins and outs of the health care industry well. This, his latest salvo against health care reform, drives right into the center of debate. If the government cannot prevent rampant waste within Medicare and Medicaid, how can Americans trust that a complete federal takeover of health care will not end up with similar results?

In his argument, Coburn sites a report by the Governmental Accountability Office claiming that a full 10 percent of Medicaid payments made in 2007 were improper. Medicare fraud estimates range as high as $80 billion, according Kim Brandt, one of Medicare’s anti-fraud specialists.

Coburn also serves on the Senate’s Permanent Subcommittee on Investigations, the same whistleblower committee that found individuals fraudulently using the ID numbers of dead doctors to file false claims, bilking taxpayers of over $90 million. Audits by the committee also found that in four of the nation’s largest states, California, Texas, New York, and Illinois, as much as 40% of home health care expenditures went toward fraudulent claims.

license to stealThe editorial’s co-author, Harvard’s Dr. Malcolm Sparrow, author of “License to Steal” believes fraud could account for up to 35% of Medicare and Medicaid’s total claims, amounting to hundreds of billions of dollars.

According to the editorial, Medicaid internal inspectors agree that waste fraud and abuse run amok in the system. This sentiment is echoed by Medicare anti-fraud specialist, Kim Brandt saying, “The truth is, no one is sure. All they know is that the more they look the more they find.”

Back in May, Sen. Coburn introduced bi-partisan legislation that seeks to use privare sector entities to identify and prosecute fraudulent claims. Coburn says, “Members of Congress should look to the credit card industry as a model of fraud containment. It processes over $2 trillion in payments every year from 700 million credit cards being used at millions of vendors to buy countless products. Fraud in that industry is one-tenth of one percent while fraud in Medicare and Medicaid as at least 100 times higher.”