The Bernie Madoff of Medicare?

Physicians earn high salaries.  The Bureau of Labor Statistics notes that the median primary care physicians made $186,044, and specialists typically earn  $339,738.   Some physicians earn much more than that, but not always through legitimate means.

Consider the case of Dr. Jacques Roy:

Federal law enforcement officials announced charges in the largest healthcare fraud scam in the nation’s history, indicting a Dallas-area physician for purportedly bilking Medicare of nearly $375 million after he reportedly sent out “recruiters” to round up patients and get them to sign for treatments he never provided...

Authorities allege that Roy and his office manager in DeSoto, Texas, Teri Sivils, who was also charged, sent the healthcare recruiters door-to-door asking residents to sign forms that contained the doctor’s electronic signature and stated that his practice had seen them professionally in their own homes.

They also allegedly dispatched more recruiters to a homeless shelter in Dallas, paying them $50 every time they coaxed a street person to go to a nearby parking lot and sign the bogus forms.

The long-running ruse began in the Dallas-Fort Worth area in 2006, and over the last five years collected more Medicare beneficiaries than any other medical practice in the United States.

Also charged were five owners of home health agencies. Health and Human Services Department officials suspended payments worth about $2.3 million a month to 78 other Texas home health agencies.

Despite the enormity of the fraud, $375 million is just a drop in the buck relative to overall Medicare spending.  This represents only 0.07% of total Medicare spending in 2010 (Medicare spending in 2010 was $524 billion).  Although reducing fraud waste and abuse is important, it will not drastically decrease Medicare spending.

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