Medicaid Money Laundering

Every politician moans that entitlement spending is out of control, so it ought to be easy at least to stop blatant fraud and abuse. Evidently not: Congress is currently resisting an attempt to rein in even a Big Con that everyone acknowledges.

The scene of this crime is Medicaid, the open-ended program that provides health coverage for about 59 million low-income people, with the rolls expanding every year. States determine eligibility and what services to cover, and the feds pick up at least half the tab, though the effective "matching rate" is as high as 83%. Now it turns out that states have been goosing their financing arrangements to maximize their federal payouts and dump more of their costs onto taxpayers nationwide.

The swindle works like this: A state overpays state-run health-care providers, such as county hospitals or nursing homes, for Medicaid benefits far in excess of its typical rates. Then the federal government reimburses the state for "half" of the inflated bills. Once the state bags the extra matching funds, the hospital is required to rebate the extra money it received at the scam's outset. Cash thus makes a round trip from states to providers and back to the states – all to dupe Washington.

The Government Accountability Office and other federal inspectors have copiously documented these "creative financing schemes" going back to the Clinton Administration. New York deposited its proceeds in a Medicaid account, recycling federal dollars to decrease its overall contribution. So did Michigan. States like Wisconsin and Pennsylvania fattened their political priorities. Oregon funded K-12 education during a budget shortfall.

The right word for this is fraud. A corporation caught in this kind of self-dealing – faking payments to extract billions, then laundering the money – would be indicted. In fact, a new industry of contingency-fee consultants has sprung up to help states find and exploit the "ambiguities" in Medicaid's regulatory wasteland. All the feds can do is notice loopholes when they get too expensive and close them, whereupon the cycle starts over.

The Bush Administration did just that. In 2003, it began audits that resulted in 29 states dialing back the practice. In 2007, officials tried to make the reforms permanent through formal rules changes, saying federal Medicaid dollars would only pay for Medicaid services received by Medicaid beneficiaries. Naturally, the states were furious. All 50 Governors were (and are) opposed, while pressure groups like AARP and their media collaborators chime in with horror stories about "cuts" to the social safety net. Congress promptly forbade enforcement of the new regulations. That moratorium, which was slipped into last year's Iraq war funding bill, expires at the end of this month.

Now Congress wants to extend it until President Bush leaves office. The House passed a bill – 349-62 – but Harry Reid was unable to whisk it through the Senate unnoticed. Wavering GOP Senators are trying to strike a deal with the Bush Administration, which is threatening a veto, mostly with offers to beef up the $25 million allocated to "combat" Medicaid fraud and abuse. Of course, these antifraud troops only fight after state schemes have paid out. And should the moratorium stick around, states will merely revert to their con artistry, knowing they are no longer being watched.

A reform alternative would be for the government to distribute block grants, rather than a set fee for every Medicaid service. That would amputate Washington from state accounting and insulate taxpayers from these shakedowns. States would have an incentive to spend more responsibly, and also craft innovative policies without Beltway micromanagement. But we can dream.

In the short term, Congress could – but probably won't – allow the Administration to close this case. No one really knows how much the state grifters have already grabbed, though the Congressional Budget Office estimates that the Administration remedies would save $17.8 billion over five years and $42.2 billion over 10.

We realize this is considered a mere gratuity in Washington, but Medicaid's money laundering is further evidence that Congress isn't serious about spending discipline.

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Australia: Farce as NSW firefighters act as ambulance officers

Ambulance/paramedic services are provided by State governments in Australia. There are big problems with such services in all States. Current reports from two States below

FIREFIGHTERS say they are acting as ambulance officers and treating the sick at crash scenes and other emergencies in a growing trend aimed at plugging holes in the health system. The Daily Telegraph can reveal NSW Fire Brigades crews last year responded to 5583 medical emergencies. And the number of firefighter call-outs is climbing, up by 1200 since 2005, documents obtained under Freedom of Information show.

But the NSW Fire Brigade has rejected claims firefighters are propping up the health system. The brigade's assistant public affairs director Kate Dennis said there were a very small number of first-aid interventions. Firefighters provided CPR, oxygen and other medical assistance in hundreds of non-fire related cases last year.

The Ambulance Service last night admitted it does rely on firefighters to respond if its crews are unavailable. Documents show many of the medical emergencies involved people trapped in car accidents, which are mandatory for the fire brigade to attend. But on 528 occasions last year firefighters performed first aid at non-fire emergencies.

Ambulance officers said they were concerned about the increasing reliance on firefighters responding to medical call-outs. "There are times when we are tied up at another job and the fireys are the first to get there, so they have to start treating the patient," a 30-year ambulance veteran said. "We aren't knocking our comrades but we are concerned that the Government will use fireys to respond to jobs. All three emergency services are covering each other's tail."

Maianbar artist Julie Mellae didn't care who turned up to help her 70-year-old father during a heart attack last year - as long as someone responded to her call. A fire crew was dispatched to her home to offer medical assistance to her father Albert Cosgrove. "Probably in the suburbs it would sound a bit quirky to have fire brigade people help out with a medical problem," she said. "But out here when there is a tragedy everybody helps out where they can."

In the latest example of the overstretched system, ambulance officers in the Hunter have also taken industrial action over one-person crews attending emergencies. They have rejected a plan to man the ambulances with a volunteer firefighter or SES worker.

Fire Brigade Employees Union state secretary Simon Flynn said there was a growing "overflow system" where fireys were propping up the health system. The union is taking its concerns to the Industrial Relations Court next week. Under changes within the brigade in 2003, fire engines were equipped with defibrillator and trauma kits while getting the equivalent to graduate ambulance officer training.

However, an Ambulance Service spokesman said firefighters would never replace paramedics. "First-aid skills are important for any emergency service operative and we support firefighters being trained in life-saving interventions to assist paramedics," he said.

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Serious ambulance problems in Tasmania too

COUNTRY ambulance stations are closed up to nine hours a day - sometimes three times a week - because paramedics are seriously fatigued. Some paramedics are on duty for 96 hours straight, Australian College of Ambulance Professionals Tasmanian branch chairman Tim Rider said. When paramedics took nine-hour fatigue breaks, there was no one to cover for them and stations were unmanned. As a result, Mr Rider said people near Huonville, New Norfolk and Sorell were at risk in an emergency.

"Fatigue is a significant issue for paramedics when they're on the road driving and it can affect their clear, cool judgment," he said. "It also places the community at risk because they have to put up with a longer response time if we can't back-fill (the fatigue break), which is usually the norm."

The Health and Community Services Union put a staffing plan for Huonville, New Norfolk and Sorell to the Government three years ago. But HCSU assistant secretary Tim Jacobson said the plan was not acted on. "People are sick of working overtime," Mr Jacobson said. "Outer-urban stations operate on a model that doesn't have a full complement of full-time staffing. "It's becoming more problematic because of urban sprawl and increasing case loads. There is no fat in the system to provide cover when there are absences or vacancies."

Fatigue was a serious issue for paramedics at outer-urban stations, where a four-day-on, four-day-off work roster meant they were on call overnight after working more than 11 hours. Paramedics were increasingly taking nine-hour fatigue breaks.

Mr Rider said outer-urban services required more resources, including full-time staff, and a new work model. "The four-on, four-off roster is very well liked by paramedics in town. But the fact is the days of the single branch officer is way outdated in today's environment, given the workload and the OHS issues," he said. "They're basically on duty for 96 hours straight, and their clinical judgment can be impaired." Mr Rider said the Tasmanian Ambulance Service was aware of the problem and would advertise for more qualified paramedics this year.

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