For Immediate Release    Contact:  Jim Campi
September 29, 1997 (202) 467-5300


(Washington, D.C.) – Citizens Against Government Waste (CAGW) today released a special investigative report that documents massive waste, fraud and abuse in the $212 billion-a-year Medicare program and offers market-driven solutions to fight it.  The report, entitled Medicare Fraud:  The Symptoms and the Cure, contains 66 examples of how physicians, hospitals, and other health care providers are gaming the system to the tune of $63 million a day.

“Providing quality health care at an affordable price for America’s senior citizens is of paramount importance, and Medicare cannot remain subject to such waste,” stated CAGW President Thomas A. Schatz.  “But the system is too big and too complex for anyone to make real sense of it.  The root cause of fraud and waste is the structure of Medicare itself.”

Even the Department of Health and Human Services (HHS) inspector general’s (IG) office, which has taken a more aggressive stance against Medicare scams in the past two years, concedes that the problem goes beyond mere fraud, stating that Medicare is “inherently vulnerable to incorrect provider billing practices.”

Two of the more outrageous examples of abuse include a Colorado surgeon who claimed more heart bypasses than he actually performed, and a Boston psychiatrist who intimidated patients into lying for him and then pleaded insanity when finally caught.  The HHS IG identified more than $23 billion in improper Medicare payments – nearly 14 percent of the program’s cost.

CAGW’s special report suggests that the best method of preventing Medicare fraud is to reform the current Medicare system.  CAGW recommends:  (1) allowing Medicare beneficiaries to choose their own private health insurance plans; (2) requiring health plans, physician groups, and insurers to provide consumers with information on the quality of care; and (3) encouraging direct competition between provider systems based on quality and cost.

“Healthcare decisions must be placed in the hands of the people who depend upon Medicare – the elderly and the disabled – and taken away from the politicians, bureaucrats, lawyers, accountants, and consultants,” Schatz remarked.  “This is the only way to assure less fraud and the highest quality health care for current and future senior citizens.”

CAGW is a 600,000 member organization dedicated to eliminating waste, inefficiency, mismanagement, and abuse in the federal government.

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