Bacon's Rebellion

by James C. Sherlock

Health care fraudsters are often treated by Virginia elected officials in the same way moonshiners were in this state, as local heroes pursued only by the feds. Many prefer not to interrupt the product flow. They simply want a taste from the jar.

Dick Hall-Sizemore, a dedicated contributor to BR and a good man, wrote in a comment on this author’s article on restructuring Medicaid: “Having that much money at stake should be an incentive to go after fraud. Even a relatively small reduction in fraud can amount to big bucks.”  

He is exactly right. But “should be “is a plea, not an observation.  

Dick’s goals cannot be fully realized in Virginia and other states as long as elected officials treat Medicare and Medicaid as found money. With a ton of money at stake that is mostly federal, too many state politicians continue to view the fraudsters as harmless and motivated donors rather than as criminals. But the outcome of the worst frauds is the destruction of the lives and the premature and suspicious deaths of Virginians who cannot help themselves. Corrupt public officials have been around as long as governments themselves. The majority of Virginia elected officials at the state and municipal levels are on the take. Bribery is legalized here through unlimited campaign donations at both the state and local levels.

Members, the Governor, and the Attorney General, in January of this year, accepted campaign donations from those who have long been committing fraud in plain sight. Some of the most powerful members of our legislature treat healthcare fraud as a means to funnel money into the “communities.” One senior member has been identified by state inspection results as violating state laws and regulations. There is a word for that.

With $20B in Medicaid funds and $24B from Medicare flowing into Virginians’ pockets every year, medical services fraud has become a major industry in the state. It is stolen for the same reason Willy Sutton robbed banks. Federal estimates put annual healthcare fraud nationwide at over $50 billion, which would make Virginia’s share over $1 billion a year. Bet the over. In Virginia, this author’s years of research and reporting show that $1B a year appears to be a major underestimate of the take from fraud in the nursing home industry alone.

A recent headline shows law enforcement chipping away at fraud. The case recovered $10 million that had been stolen over a six-year period. It is easy to see that a joint federal-state investigation and prosecution at that level likely costs more than the recovery. But this author applauds it nonetheless.   

The biggest problem is with the regulators.  The General Assembly hobbles them, but they have not, in 60 years, used the authority they do possess to stop fraud.  This author tends to lay that at the feet of the political appointees who make the decisions, not the career staff.

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