Medicare is a system of government sponsored health care insurance for most Americans age 65 and over and for many of the nationÆs disabled individuals. Medicare represents one of the federal governmentÆs largest entitlement programs, a fact demonstrated by annual expenditures of more than $200 billion (U.S. GAO, p. 1). The federal government has sought to institute changes in the Medicare system in order to help control the rising annual costs of providing Medicare for the elderly and disabled, costs that Congress believes reflect a significant amount of fraudulent or wasteful claims.
In License To Steal, author Malcolm K. Sparrow (2000), a Medicare fraud investigator, argues that up to 50% of all Medicare costs stem from fraudulent charges. Further, Sparrow (p. 39) contends that the monitors for auditing and other controls within Medicare are only concerned with billing processes and procedures and are not aimed at detecting fraud and the lies that support it: ôThe rule, for the thieves in the system, is simple: Bill your lies correctly. Provided they do that, they can rely on the payment systems to process their lies correctly, and pay them.ö
Sparrow provides detailed explanations of the political and institutional barriers to undermining fraud that enable thieves to bilk Medicare out of billions of dollars annually. While Sparrow does admit that in order to correct the system on the scale and level needed a great amount of upfront funding is required, he argues that such an investment will be handsomely returned in fraud savings in the long run. Sparrow illustrates myriad types of thieves who take monies fraudulently from Medicare, including lower-class hoods, drug trafficking organizations, organized crime syndicates, and Medicare providers who establish only a beeper and post office box in order to ply their trade. Even major hospital chains are involved in the corruption and fraud that plague the current Medica...