Just before the August congressional break, Citizens Against Government Waste testified before a forum on Medicare fraud that was chaired by Sens. Mel Martinez (R-Fla.) and John Cornyn (R-Texas).  Sen. Martinez introduced S. 3164, the Seniors and Taxpayers Obligation Protection Act (STOP) of 2008, a bill that does several things to address the continuing problem of out-of-control fraud in the Medicare program.

The testimony addressed two of the reform measures in the legislation.  First, having the Department of Health and Human Services (HHS) replace the Social Security number as the Medicare identifier with another number, and second, developing a tracking system that would help trace where and to whom medical equipment is dispersed while determining if the supplier is a legitimate entity before it could receive Medicare payments.

There have been numerous reports of Medicare identity theft and durable medical equipment (DME) fraud.  The most recent include a June 22 New York Times story by Robert Pear that pointed out that officials at the Social Security Administration are so concerned about identity theft that they want all Social Security numbers to be removed from Medicare cards.  While the public is warned not to carry a Social Security card as identification, Medicare recipients are asked to carry their Medicare card at all times, which contain their Social Security numbers.  HHS is resisting the proposed change, claiming it will cost too much, but other agencies such as the Veterans Administration and the Department of Defense are dropping or have dropped Social Security numbers from their health cards.

During August, Jay Weaver of The Miami Herald ran a series of disturbing articles on the rampant Medicare fraud in south Florida.  He cited false claims for HIV-drug infusion and the distribution of medical supplies, such as wheel chairs and oxygen equipment, which amount to at least $2.5 billion a year in fraudulent claims in the south Florida area alone.

According to the Congressional Budget Office, Medicare is expected to insure an estimated 44.6 million beneficiaries at a total cost of $456 billion in fiscal 2008.  That amounts to taxpayers paying more than $1.25 billion a day on Medicare alone and does not include other entitlements such as Social Security and Medicaid.  So, while CAGW agrees with Sen. Martinez’s proposal to protect Medicare and make sure tax dollars are wisely spent, the organization’s testimony concluded that Medicare should be fundamentally restructured and reformed.  Much of what the senators proposed, while well-intended, will only serve as a temporary band-aid to saving tax dollars.