During a March 10, 2010 rally in St. Charles, Mo., President Obama blamed health care fraud, waste and abuse for costing taxpayers almost $100 billion in 2009, according to an Associated Press story published that day on Yahoo News.
He said such payments, which include Medicare fraud and Medicaid fraud, amounted to more than is spent on the Education Department and the Small Business Administration combined, according to the article.
Obama’s anti-fraud approach includes hiring private auditing firms, called Recovery Audit Contractors, or RACs, to comb health care businesses—including doctors’ practices—for health care fraud and abuse. The auditors, like whistleblowers or qui tam relators, would keep part of what they help to recover.
The White House said a Medicare pilot program, using such auditors, recouped $900 million for taxpayers from 2005-08, according to AP. We think the RAC’s provide a huge savings to taxpayers at minimum just because of the deterrent effect alone. It is our understanding that health systems are generally aware of upcoming audits and their scope. The recoveries they have centered on medical necessity of inpatient admissions, an area we believe will be an upcoming focus of the OIG.