If you tuned in to “60 Minutes” on October 25th, you saw a segment detailing the extent of fraud committed against Medicare and taxpayers.  If you missed it, here it is:

The segment shows just how easily people can get Medicare to pay for false claims, and how small their chances are of being caught.  According to FBI Special Agent Brian Waterman, Medicare fraud is a gigantic business that rivals even the sale of illegal drugs in South Florida.  Experts estimate that $60 billion is paid out in fake claims every year.

There are three things are extremely unsettling about this story.  The first is just how easy it is to commit Medicare fraud.  The fraudsters simply open fake medical supply storefronts, purchase lists of Medicare recipients and their relevant information and begin billing.  It seems to me that the ease with which these crimes are committed suggests that there are a whole host of solutions, which would decrease Medicare fraud and could be implemented through everyday common sense.  Yet, the agency seems to be dragging its feet on the road to prevent Medicare fraud from becoming a criminal industry.

Second, before Congress decides to pay for health care reform by raising taxes, they need to fix the system so that the billions of dollars that is expended to pay fraudulent Medicare claims can be saved.  That solution could easily come from requiring greater responsibility on the part of health care recipients.

Third, at Wallet Blog, we have been advocating for increased patient accountability in the health care industry, and have been arguing that the major problem with health insurance is that, once people have it, they don’t really care about the costs their health care providers charge since those costs are covered by their insurers.  Because they aren’t paying the bill, they have no incentive to shop around.

What better argument is there that people aren’t concerned about their health care costs than the extent of the Medicare fraud revealed by “60 Minutes.”  Not only are Medicare recipients not looking for the best provider at the lowest cost, they’re also not even monitoring their monthly statements to look for fraudulent charges.   Thousands of Medicare recipients open their bills each month and see these erroneous claims, and yet, Medicare can’t stop the fraud.  While Medicare recipients ought to provide the most rigorous policing force in this system, they have no stake in the outcome, one way or another, and so they don’t report the problems.

The versions of health care legislation that we’ve seen thus far, haven’t addressed how the government plans to curb Medicare fraud, and it certainly hasn’t advocated for increased responsibility for Medicare recipients, which would be an obvious solution to the problem.  This is just a typical example of our government asking for more money from taxpayers rather than shoring up the holes in the system to make it more cost effective.  Patient accountability is the common sense solution to Medicare fraud, but instead the government is willing to use taxpayers’ money to fill a 60 billion dollar hole.