Who's responsible for health-care fraud?

Who's responsible for health-care fraud?

By Suzy Khimm

Expanding its war on entitlement fraud, the Obama administration has begun cracking down on top corporate executives whose companies are found guilty of defrauding Medicare and Medicaid. It's a big shift in terms of who will be held responsible, the Associated Press reports:


<...>

But the Obama administration's move could do more than just unsettle current and former health industry executives — it's indicative of a major development that's often gotten lost in the broader political debate over fraud in Medicare, Medicaid and other entitlement programs.

<...>

But such small-time fraudsters represent a small fraction of the Medicare and Medicaid fraud that's committed, White argues. Last year, the Justice Department recovered $3 billion in false claims overall, a record $2.5 billion of which came from the health-care sector. And, the HHS spokesman points out, big pharmaceutical and medical device corporations are among the worst offenders: Last year alone, the DOJ says it recovered $669 million from Pfizer, $302 million from AstraZeneca and $193 million from Novartis. That's why the Obama administration has focused on "large corporations, pharmaceutical companies who are illegally marketing" drugs that haven't been tested, White concludes.

Going after "impersonal" corporations by simply making them pay big fines doesn't seem to have deterred bad behavior, as repeat offenders abound, the Associated Press points out. By punishing individual senior executives, however, the federal government may not only force corporate leaders to combat fraud internally, but also draw greater public attention to the issue. As the past debate on entitlement fraud has shown, it often seems more politically persuasive to pin the blame on individuals than on institutions. Whether or not that's the federal government's intention, industry executives may soon end up becoming the poster children for health-care fraud.