Yefin Drakhler was taking Medicare for a ride. Drakhler, 74, was identified as an “over-utilized beneficiary” after visiting 124 medical providers in a 6-year period. In October, 2010, Drakhler pled guilty to receiving kick-backs for his excessive medical treatments. At one Brooklyn-area clinic, Drakhler was paid cash for receiving medical treatment. Drakhler and his providers are hardly alone in their attempt to defraud the U.S. taxpayers. In March, 2011, the FBI announced it would be filing charges against 111 doctors, nurses and other healthcare workers whose alleged fraud included over $225 million in phony billing. According to Politicfact.com, the cost of Medicare fraud ranges from $13 to $80 billion each year.

The numbers are so high because Medicare is an easy target for criminals. The payment process is almost completely automated and computerized, and there is virtually no audit system in place. The lack of human involvement or even inspections is one reason that crime families in New York City are choosing health-care fraud over extortion as their crime of choice, according to a 1997 report in the New York Times. According to the FBI, even cocaine traffickers are switching specialties. Health care fraud is simply easier, less risky and more lucrative than dealing drugs. 

When Medicare benefits criminals, there is less assistance available for the rest of us. A couple retiring in 2011 will have paid an average of $114,000 into Medicare over their working years. Yet, they can expect to use three times that amount. The deficit that Medicare creates affects current and future retirees and threatens the health of the economy in general as policymakers are scrambling to deal with record-level government deficits. Clearly, Medicare fraud is not only a moral issue, but one that can have devastating consequences for millions of people.

Yet, with Medicare’s inefficient claims processing system, lawmakers are left to rely on whistleblowers to crack down of Medicare fraud. To aid the effectiveness its campaign, the Medicare Fraud Strike Force relies on the False Claims Act. This law allows private individuals to sue on behalf of the federal government. As an incentive for whistle blowers to come forward with their knowledge of fraudulent activity, lawmakers applied the writ of qui tam to the False Claims Act. Using the writ of qui tam, a whistleblower may receive 15 to 30 percent of the award resulting from a successful lawsuit. In 2008 alone, whistleblowers received $198 million. 

The success of the whistleblower campaign and the False Claims Act has meant billions in recovered funds. Clearly, Medicare fraud impacts every American. According to the Kaiser Family Foundation, 45 million Americans currently rely on Medicare. Nearly 40 percent of Medicare recipients have chronic conditions or poor health. Clearly, financing Medicare into the future presents multiple challenges, with little agreement among policymakers on how to meet these challenges. However, lawmakers on both sides of the aisle and American can agree that fighting Medicare fraud is a good place to start.