MEDICAID FRAUD RECONSIDERED: HOW THE HOSPITALS GOT ON WELFARE
Cohen, Toby
How the Hospitals Got on Welfare A year ago, Senator Frank E. Moss of Utah made headlines when he revealed that he and some of his staff members had posed as patients in New York City...
...Total expenditures in 1975 amounted to $118.5 billion, or 8.3 percent of the GNP...
...In the case of double billing and errors in the dates of invoices the hospitals blame com puter error...
...Around some hospitals something like this arrangement may exist de facto...
...The hospitals have interpreted the concept of "visit" very loosely indeed...
...Commissioner Bellin deplores the "notch effect" of giving unlimited benefits to welfare recipients and virtually no benefits to working people...
...In a city as short of cash as New York, $18 million in a year is an unacceptable drain...
...In fact, for all its much publicized defects, Medicaid has not been much more inefficient than the private sector in providing health care...
...One major New York hospital received $6 million from Medicaid for its OPD last year, and the City Health Department is questioning $4 million of it...
...These sentiments are echoed by Dr...
...They now range from $6 to $15, depending on the specialty, while a Park Avenue practitioner may normally charge from $40 to $75...
...The City expects $18 million (12.8 percent of total payments) to be returned from the voluntary hospitals, as compared to $2 million from the Medicaid mills, which the City has already obtained...
...But there is a deductible, and the benefits are not open-ended...
...They have to...
...That is the real shame of Medicaid...
...But it would be deceptive to focus on the most costly items in the armamentarium of modern medicine...
...A recent poll conducted by Time found that 61 percent of the American public would be willing to pay higher taxes to support national health insurance...
...This is an extreme case, but other hospitals also draw a large share of their revenues from the programs...
...Is a group session eight visits while an individual session is one visit...
...The hospitals, of course, are highly respectable institutions...
...Welfare Chiselers in White Coats: How Hospitals Pad the Cost of Medicaid DO HOSPITAL OPDS have to cost so much that middle-class people cannot afford them...
...Perhaps the most important point is that the program was not systematically designed...
...The patient can walk in at will and ask for service...
...How can you expect to keep costs down...
...Within a year after Medicaid was implemented, average OPD charges quadrupled, from $5 to $20...
...Travers says, "but why is public attention being focused on fraud...
...The states could add other benefits and extend them to the "medically indigent" who are not on welfare...
...A CAT scanner costs half a million...
...The term "visit" has been stretched beyond what the letter of the law allows...
...Instead, obeying a corollary of Parkinson's law, they add new projects to take up the money availble for their expansion...
...In the U.S...
...There's something totally wrong with a system that taxes someone to subsidize another person to a better standard of care than is available to the person who is paying for it in the first place...
...While they are a useful diagnostic tool in some cases, a smaller number could have been purchased and shared by these hospitals...
...Average Medicaid expenditures were not much greater than the average expenditure for medical care in the population as a whole...
...When you consider that more patients means more sickness, you realize that it's a completely insane world...
...The top priority of the Department of Social Services, the prime time on that computer, is sending out welfare checks...
...When Blue Cross programs in Ohio and southern New York tried to curtail hospital expenses, the courts ruled that they lacked the necessary authority...
...Instead of having a program with a spectrum, you have everything, everything, everything, then the notch, and nothing, nothing, nothing...
...The problem is that we aren't getting as many patients as we ought to, and we're losing money...
...The New York City Health Department estimates that the Medicaid program could get back $26 for every dollar spent on auditing...
...Even if they have not opened storefront operations, the hospitals have aped the mills in other ways, the officials charge...
...In his press conference the Senator suggested that Medicaid fraud might be costing the City $300 million a year, or half of what the deficit-plagued municipal government contributes to the program...
...Paris compares the hospitals to heliotropic plants growing toward the sun...
...In May 1977, the administration of New York City Medicaid was taken over by the New York State Department of Health...
...The emergency room in fact has become a kind of second OPD for many poor patients, and in some cases their first source of routine medical care...
...John T. Gentry, former executive director of New York City Medicaid, is group psychotherapy...
...What can we learn from the history of Medicaid...
...and using an incorrect clinic code (such as a medical code for a dental service) to circumvent a rule requiring prior approval for some procedures...
...The City Health Department is too short of staff and money to wage an effective campaign against fraud...
...A preliminary audit by the New York City Health Department of outpatient and emergency room billings during one month of 1975 revealed a large number of irregularities that had resulted in overcharges to Medicaid...
...Lowell E. Bellin, at the time of this interview and up to last January New York City's commissioner of health, "that if I were to wake up one morning in a bad mood and decided to cut off city Medicaid funds, most of them would have to declare bankruptcy within 48 hours...
...At Mount Sinai Hospital, according to its director, Dr...
...The programs provide expensive benefits, and someone has to pay...
...But it is time to think of a real Medicaid giveaway—in the hospital clinics...
...Almost all the rest of the fees come from Medicare and Medicaid, 70.8 percent from Medicaid alone...
...Still, in the words of Dr...
...because if the checks don't go out there's a revolution, and blood will flow like borscht in the streets...
...The rest was taken up xy the department's share of ancillary services (such as X-ray machines) and indirect costs (such as the heating bills...
...There is no reason to assume that the private sector has a less spotted record in this area than the government programs...
...Better regulation of Medicaid is essential...
...It's a fascinating but also a tremendously depressing experience [says a member of the board of a major hospital...
...Some hospitals have started repayments, but in a trickle...
...Costs have expanded continuously since the inception of the program, and the trend since 1969 has been for states to cut Medicaid benefits...
...And the program has xeen charged when patients come in to make an appointment, even if they receive no treatment...
...The major drain on hospital resources, however, is not a matter of salaries but of the cost of acquiring prestigious and expensive new equipment, whether medically necessary or not...
...Often the people who run the OPD have no direct control over the budget, and nobody knows what the actual costs of the OPD are...
...One physician affiliated with Mount Sinai accepts Medicaid patients but never bothers to collect payment from the program...
...Some abuses by patients do occur...
...But the crux of the Medicaid problem in the hospitals is not a matter of fraudulent claims or even computer errors...
...In a budget of over $2 billion, the allocation for monitoring is under $3 million, or less than 15/ 100 of one percent of the total...
...If more private practitioners agreed to treat Medicaid patients, it might be possible to lure some of them away from the expensive hospital clinics...
...The thrust of the Medicaid program, enacted as an amendment to the Social Security Act in 1965, was to bring the poor into the mainstream of American medicine—which meant, first of all, into the doctor's office...
...According to Dr...
...Instead, he lets his staff keep the fees, if they handle the paperwork on their own time...
...No one knows how many private physicians in New York City might have been willing to add Medicaid patients to their practice, given an adequate financial return...
...According to law, Medicaid is supposed to be billed for an all-inclusive patient visit...
...Paris sees no end in sight to spiralling costs unless the hospitals institute major reforms...
...The question is whether Medicaid itself ought to be saddled with the indirect costs of their education...
...To the public, the current investigations may seem to be too little and too late...
...And the next moment you're talking to an administrator of a leading hospital who's being very civilized, but stealing in an even bigger and better way...
...One reason is that while administrative costs are less than 2 percent for the Medicaid program, they reach about 8 percent for Blue Cross/Blue Shield and run 10-15 percent for private insurance...
...And this August we didn't have as many patients as last year...
...After a little more research, some of the missing names did turn up—on death certificates filed with the Department of Health...
...Many of the hospitals' defenders would argue that it is worth paying a premium to subsidize the major teaching institutions, since they get the brightest young medical graduates who provide a high level of medical care to poor patients in the OPDs...
...Even if the hospitals retained responsibility for these operations, he would like to locate them in satellite clinics outside the hospital walls...
...The comparison may be called unfair, if only because the vast government program achieves some "economies of scale" that a smaller system could never realize...
...One moment you're talking to some physician from an obviously crooked Medicaid mill, who's screaming that he's going to get his attorney after you...
...In fact, virtually all recipients of Medicaid in New York City are also welfare recipients—a group that, under the Medicaid law, must receive benefits from any state program...
...One alternative clearly is no medical care at all, and a large number of needy Americans have found this "program" the only one within their means...
...Or a patient is referred from one clinic to another—from ophthalmology to neurology, for example— and there are suddenly two "visits," although the consultations may take place on the same day...
...or when, tired of sitting in the waiting room, they simply walk out without having seen a doctor...
...One of the problems in designing a program of this kind is that costs are notoriously difficult to predict...
...But it could be argued that this solution suffers from the same defects as step-down accounting: by cutting costs across the board, it fails to identify the real costs of the various programs...
...Should the voluntary hospitals of New York have received $140 million in Medicaid funds for outpatient services in 1975, even supposing that their claims were within the letter of the law...
...This is the same rate charged for individual therapy...
...It is the hospitals of New York City who collect most of the Medicaid funds...
...With many physicians refusing to treat Medicaid patients, and with family practice on the decline in the city, hospital OPD's (Outpatient Departments) have become major providers of primary care in New York...
...Berman charges that "under such a system of accounting and control, ambulatory care becomes the financial scapegoat...
...The New York City Health Department, however, oversees private practitioners and OPD operations in the city, while the actual disbursal of funds is the responsibility of the Department of Social Services...
...For example, the PayneWhitney Clinic, psychiatric division of New York Hospital, has been billing Medicaid $94 per patient for each sessiorf of groups as large as eight...
...Bellin, for unrelated reasons, has returned to a professorship at Columbia University's School of Public Health...
...and in terms of buying power, $5,000 is a substantially lower income than it was ten years ago...
...The best the City can hope for is restitution of moneys paid out for unjustified claims...
...How the Hospitals Got on Welfare A year ago, Senator Frank E. Moss of Utah made headlines when he revealed that he and some of his staff members had posed as patients in New York City "Medicaid mills," where they received unnecessary tests and treatment...
...Most have Medicaid...
...Medicaid, in short, has worked reasonably well in financial terms for a group of Americans that is large but not large enough...
...Mount Sinai recently refunded $67,000 for the dental clinic alone...
...Nearly everyone will agree that the Medicaid program as now administered costs too much...
...They do consult the physician slightly more often than fee-paying patients, but this pattern may simply reflect the fact that the poor are sicker and need more medical attention than the average patients...
...Under the prepaid system the patient pays a lump sum for year of medical care, which is provided by salaried physicians...
...But the quality of care in the public hospitals is commonly believed to be lower than in the voluntaries, and Medicaid patients were supposed to have the freedom to choose their own "health-care providers...
...You just go after bucks...
...But Dr...
...Medicaid has been billed for a medical visit when the patient simply came in to refill a prescription...
...Not that the nation opposes the principle of wider coverage...
...An even more essential and equally Herculean task is to bring hospital charges in line with real costs, and keep costs down...
...You could hire ten of the top young physicians coming out of the training programs each year and pay them $50,000 each to practice first-rate medicine...
...S. David Pomrinse, about half the OPD patients now come from Spanish Harlem, and another quarter from the South Bronx...
...When they do not come directly out of the employee's salary, they are passed along to the public in taxes or other costs...
...The search for new funds now makes up a major part of the business of running a hospital...
...it is well known to Medicaid administrators in New York, for example, that there is a black market for Medicaid cards...
...the program simply aimed too high...
...Richard A. Berman has shown the drawbacks of the "step-down" system as it operates at New York Hospital-Cornell Medical Center, where he is associate hospital director for ambulatory care...
...Fewer and fewer people are being served, and the public is getting angrier and angrier...
...There were about 24 million Medicaid recipients in 1975...
...programmer error" would perhaps be a better term...
...At the same time," says Dr...
...The problem, he believes, was a kind of hubris...
...The definition of eligibility for Medicaid has been tightened...
...The cash nexus involving hospitals and government money grows more important each year...
...If you ask most hospital administrators, they will tell you that the outpatient services are a deficit-ridden operation, and that even with Medicaid the inpatient operations must in effect subsidize the OPD...
...Medicaid, which went into effect on January 1, 1966, was part of a federal/ state assistance program designed to benefit primarily those persons already receiving other federal welfare assistance...
...Publicity campaigns (sponsored both by the City and private organizations) informed them of their privileges...
...Reform of hospital finance is a long-term project...
...many physicians would prefer to bill the patient, as they can under the Medicare program for the elderly...
...Medicaid payments in the same year totalled $13 billion—about 1 percent of the GNP, or $54 for each American...
...Paris would like to hold 2,500 such hearings a year...
...Travers now is the director of Health Services Evaluation within that system...
...Here is free money...
...Public health officials such as Commissioner Bellin, however, remain skeptical about the profession's ability to police itself...
...In the private sector, which is widely praised for its "efficiency," a comparable investigation has yet to be carried out...
...But Medicaid rates for an office visit, which were low at the inception of the program, were reduced by 20 percent in 1969...
...One's overt and the other's covert...
...Paradoxically, Medicaid is both a victim of rising hospital costs and a contributing cause...
...Hospital administrators calculate costs on a "step-down" basis, which means that they allocate some part of all general expenses, from heating oil to the salary of the personnel director, to the OPD and other departments...
...It has been estimated that $175 of the cost of every new General Motors car goes for employee medical insurance...
...Tom Travers, at the time of this interview and up to this spring, director of ambulatory (outpatient) care for New York City Medicaid, "the people who have been pointing the finger at Medicaid mills have pointed to the wrong place...
...Rashi Fein, professor of economics of medicine at Harvard Medical School, "the percentage of hospital costs attributable to payroll has been declining all these years, and if there is a major culprit it is probably the growth of technology...
...Some of the differences between the hospitals and the city involve conflicting interpretations of Medicaid regulations...
...An illustration, cited by Dr...
...Somewhere along the line the government has got to intervene...
...Many of the names on the ambulance records appeared nowhere on the clinic lists...
...Medicaid paid out an average of $560 for each...
...Other cases are more difficult to interpret...
...Unfortunately, the agencies that are supposed to police the hospitals are hobbled by limited resources and confusion over jurisdic tions...
...Medicaid rates for New York State (including the City) are set in Albany, and the state government has the task of overseeing inpatient operations...
...But recent scandals, which briefly brought Medicaid abuses back to the front pages, have perhaps diverted attention from the larger issue of the country's need for health care...
...Health care has become a gigantic industry in the United States...
...If we choose to emphasize the voluntary hospitals in an article about Medicaid fraud, it is not that their sins have been more heinous than those of others...
...Because there is reimbursement, and they have done very well by it...
...In 1975, Medicaid visits represented 47 percent of clinic visits both at St...
...Although the initial results have been limited, the government investigation now under way in New York has the potential of yielding high returns for a small investment...
...Berman points out, for example, that if a hospital found that its inpatient cost had exceeded the Medicare reimbursement limit for an inpatient, it could simply switch some of this cost to the OPD (and Medicaid...
...Of course, we must still pay for research, the development of new technology, and the training of new generations of scientists and practitioners...
...At the same time that patient traffic has increased in the OPDs, the emergency rooms have seen a sharp increase in patient visits, mostly nonemergency cases involving Medicaid recipients...
...Paris retained his position as the Executive Medicaid director until September, when the state takeover was to be completed...
...One of the unfortunate effects of Medicaid's seeming debacle has been to discourage Congress and the American public from further expansion of medical assistance...
...Needless to say, the conditions I have described exist not only in New York but in many other parts of the country...
...Unlike private insurance, Medicaid does not require a welfare patient to pay a cash "deductible" before its payments start...
...Much of this burden once was borne by the 16 municipal hospitals...
...There's really not much difference between the Medicaid mills and some of our most prestigious hospitals...
...Medicaid in particular heavily subsidizes the OPDs...
...Escalating hospital costs in part can be traced to the major pay increases won by hospital workers (cooks, porters and other nonmedical personnel) and even by interns in recent years...
...An actuary can calculate that, on the average, there will be so many fires each year, or even so much catastrophic illness...
...The greater crime is that people are going without medical care...
...But the example shows that the principle of the all-inclusive charge, when faithfully applied, can yield baroque results...
...You go up to the centers around Mount Sinai and you'll find half the staff of Mount Sinai working up there...
...The first such move was the initial audit of the hospitals' OPD books last summer under the direction of Commissioner Bellin, a seasoned veteran in the frustrating guerrilla war against Medicaid chicanery...
...New York City officials say that some hospitals have found such a bonanza in Medicaid that outpatient services have turned into profitable operations...
...For too many people, in Commissioner Bellin's words, "the program that was supposed to put them in the mainstream of American medicine has left them up the creek...
...Only in this way can we end a two-class system of medical care in the United States...
...With funds for primary care properly distributed and accounted for, there is no reason why any American who needs basic medical care should be shut out because he cannot pay the fee...
...The hospitals take such a big bite out of the Medicaid budget that even small abuses show up as a large sum of public moneys misspent and contribute significantly to the excessive cost of the Medicaid program...
...Luke's and Columbia-Presbyterian, and 45 percent at Mount Sinai...
...This collection of figures may be confusing, but it points to an important conclusion...
...Do you know what you could do with that kind of money at a renovated storefront...
...It is likely, though, in the immediate future, that hospitals will continue to provide a large part of the primary care received by Medicaid patients, and so Medicaid reform must include a closer scrutiny of the operations of OPDs and hospital billing practices...
...It may be easier to talk about small-time chiselers, "ripping off the system," or welfare mothers with uncountable broods of children abusing their easy access to free medical care...
...This is known as ping-ponging when the Medicaid mills do it," comments Dr...
...All the discussions are about "marketing"—that's the term they use...
...Martin Paris, executive director of New York City Medicaid...
...Some encouragement comes, however, from recent studies suggesting that Medicaid recipients have not abused the program on a wide scale, as some critics have charged...
...Should a clinic visit necessarily cost over $60...
...But it may be that office visits, unlike catastrophic illness, are simply not an insurable "risk...
...There is enough blame to go around...
...However, as Dr...
...Seen in this perspective, the record of the last ten years is indeed one of failure...
...In this tradeoff, however, the potential for abuse by physicians would increase...
...Working people pay taxes to help support the Medicaid program, and many of them would agree with the negative assessment given by Dr...
...As Bellin noted, "they were presumably bringing the corpses back and forth for physiotherapy for a couple of months...
...Still, says Dr...
...To quote Dr...
...they perform essential services...
...EVERY TWO YEARS," Dr...
...Like the fine print of any policy, these figures make for dull reading...
...The federal government provided matching funds at a rate depending on the means of the state, ranging from 83 percent in Mississippi down to 50 percent in three states with higher per capita incomes (California, Massachusetts, and New York...
...Unlike the mill profiteers, the hospital administrators are not lining their own pockets with illicit funds...
...Travers observed in a recent interview, hospitals easily circumvent this ceiling by simply extending patient treatment over several visits, and charging accordingly...
...Bellin was first deputy commissioner, he directed an investigation of the ambulance services that were transporting patients to hospital clinics for rehabilitative therapy...
...Once a patient comes in, the visit begins and the charge remains the same whatever services are required—X-rays, laboratory tests, or consultations at other clinics in the hospital...
...The voluntary hospitals in particular have, in the decade since Medicaid was enacted, become some of the fattest leeches bleeding Medicaid, a program whose purpose was to make first-rate medical care accessible to the poor at reasonable rates...
...And only some of the misuse of Medicaid funds in the hospitals can be ascribed to the kind of blatant fraud observed by Senator Moss's investigators at some of the Medicaid mills...
...Because it wasn't as prestigious as a CAT...
...Paris asks...
...New York City spends about 14 percent of its budget on Medicaid—the highest proportion in the nation, but still less than many of its citizens realize...
...costs are inflated in every area of medicine...
...They were never given this chance...
...Medicaid is heavily involved in the OPDs, which receive virtually no third-party payments from other sources...
...Washington has to match any expenditures made by a state under an approved program...
...These costs work out to $547 for each American...
...Their comments, however, have not lost their applicability...
...Collectively, the voluntaries now provide about half of outpatient Medicaid care in New York City...
...Bellin complains, "sex, sin, and Medicaid are rediscovered and make front-page headlines...
...At Beth Israel, only 15 to 20 percent of the visits are paid for by the "Blues" (Blue Cross/Blue Shield...
...Other states provided only the minimum required of them in order to obtain federal funds at all...
...New York State has taken the initial step of holding Medicaid reimbursements this year to 1975 levels...
...They are limited to about 400 to 600 challenges to Medicaid billings in a year...
...The Medicaid payments, moreover, must be collected directly from the government...
...Travers, "these hospitals have balked at implementing a wide screening program for glaucoma that would have cost about a dollar a patient...
...q Postscript AS OF April 1, 1977, New York State put a $50 limit on all outpatient visits...
...Travers observes that some hospitals have been deliberately cooking the books: If someone in a Medicaid mill had done this, the place would be closed down and he'd go to jail...
...The charge is now as much as $63 per visit (more in specialized hospitals), above what many physicians would charge for an office visit on Park Avenue...
...But if Medicaid costs have escalated far beyond what the program's creators envisaged, how can we hope to hold costs in line for a more ambitious insurance system...
...Here again the private sector has performed no better than the government, although in fairness it must be said that the administrators' hands were tied...
...Most employees, however, will find that the actual amounts deducted from their paychecks for medical insurance are less than the figures cited, because of substantial copayments by employers...
...An employer or union participating in New York Blue Cross/Blue Shield at the average group rate would pay $736 a year for a family package covering hospitalization in a semiprivate room for 21 days of each stay, then 50 percent of cost for 180 days...
...Sometimes treatment is spread out over ten days of X-rays, tests, and pharmacy visits, and Medicaid is charged for each day...
...Other questionable practices include billing Medicaid for visits on Sunday when the clinic is closed...
...Federal assistance was (and is) open-ended...
...But patients, unfortunately, do not all have access to "free money," and as costs rise the middle-class consumer has been particularly hard hit...
...and closing them down would throw large numbers of people out of work...
...but the costs must be allocated more equitably...
...So dependent are voluntaries on public funds," says Dr...
...An extended insurance program, run more along the lines of Medicare, could be administered by health departments rather than by the agencies euphemistically known as "departments of social services...
...When all these factors are taken into account, the Medicaid program begins to look good—particularly when compared with the cost of other insurance programs that provide lesser benefits...
...Washington's share came to $6.9 billion...
...as a whole, hospital care now accounts for 56 percent of all public spending for health care...
...The middle-class patient is caught in a bind: too affluent for Medicaid and too poor to be able to afford an OPD at a voluntary hospital or to afford a private physician...
...The whole atmosphere is one of selling a product...
...Any hospital will grow where the money is...
...It is important to remember that Medicaid serves a population whose medical needs are greater than those of the average American...
...What they show is that this is one of the better insurance programs...
...Medicaid also pays for costly treatment programs for drug addicts...
...when they cancel an appointment...
...It may be to a hospital's advantage to shift costs from an area generating little revenue to a better source of income, and hospital reimbursement has become an administrative fine art...
...And then everyone forgets about it...
...Travers, it is the first serious audit of the OPDs ever made...
...cost controls have never yet been seriously put into effect, and in any case the vast majority of Americans do not require the most expensive procedures...
...But, contrary to what was implied in the Moss hearings, the great bulk of Medicaid payments in New York City does not go to doctors at all, whether they are in private practice or attached to Medicaid mills...
...Dr...
...Paris: You know who's moonlighting in Medicaid centers...
...But the Commissioner complains that political considerations make it difficult for investigators to obtain adequate time on the computer for screening Medicaid expenditures...
...Many medical economists would argue that the OPD need not take up as burdensome a share of hospital expenses as it now does...
...If we disregard patients in the medically indigent category, who often run up staggering medical bills, because of catastrophic illness, we arrive at the figure of $410 ($578 in New York City...
...The use of a computer allows the city to construct "patient profiles" showing double billings and other irregularities that might be hidden in the jumble of day-to-day records...
...Such institutions as ColumbiaPresbyterian and Mount Sinai hospitals in New York, which once served a comfortably off and almost exclusively white clientele, have come to be a major source of primary care for the poor black and Hispanic populations of the city...
...The more predictable prepaid system, such as New York's Health Insurance Plan, is even less palatable to most American physicians than collecting fees from the government...
...A special study of 18 voluntaries carried out by the United Hospital Fund in 1972 showed that Medicaid visits accounted for 44 percent of visits to the OPDs...
...Bellin...
...It's simply a question of style...
...Medicaid Costs in Perspective: Can We Afford National Health Insurance...
...Title XIX of the Social Security Act (Medicaid) was conceived as an afterthought to title XVIII, which established the program popularly known as Medicare, an insurance system for the elderly, administered as part of the national Social Security system...
...Travers even suggests that some of these facilities are already providing better primary care than many New York City hospitals...
...And in that atmosphere utilization and cost accounting go out the window...
...Medicaid contributes significantly to this inflation," says Dr...
...OPD expenses there were $10 million in 1975, out of a total hospital budget of $ l 10 million...
...The sums involved are large...
...In theory, yes...
...If they had promised less, and if the programs had been far more modest ten years ago, then we would already have national health insurance...
...charging outpatient visits as emergency-room visits or vice versa, depending on which fee is higher...
...Paris...
...and 55 percent of all hospital expenditures come from public funds...
...Of the $10 million, less than $2 million, or 18 percent, appeared as directly budgeted expenses—the salaries of physicians, nurses, and assistants who actually worked in the OPD...
...Travers calls "Medicaid junkies," shifting their financial base to the point where the "voluntaries" are in effect publicly supported institutions...
...One countermeasure often suggested is more vigorous action by county and state medical associations against wayward practitioners...
...The inpatient side, in contrast, is well covered by Blue Cross and other hospitalization insurance...
...Beth Israel, for example, runs 28 methadone clinics for drug addicts, every clinic an efficient intake valve for Medicaid funds...
...Nor is this all...
...In large numbers they "voted with their feet," deserting the municipals for the voluntaries, which had never before seen such an influx of welfare clients...
...Subsequent stories in the press detailed the misdeeds of what the New York Daily News dubbed "Medidocs...
...In 1972, for example, when Dr...
...But most of the truly excessive costs of the Medicaid program are caused by mismanagement, fraud, and questionable accounting practices...
...Travers cites, as an example of the hospitals' greed for glamorous new equipment, the fact that 16 hospitals in New York City have acquired "CAT scanners," Xray devices that give a "3-D" view of internal organs...
...Major medical (with a deductible of $100) would provide 80 percent of charges up to $25,000...
...Bellin...
...They argue that most of the services performed in hospital OPDs could be provided just as effectively and more cheaply in storefront operations— honest, well-run versions of the Medicaid mills...
...But when critics of Medicaid grumble that Uncle Sam, in a new version of the Midas legend, turns everything he touches into other people's gold, a look at the real alternatives is in order...
...New York provided the most generous benefits in the nation...
...Why do hospitals go into the methadone business...
...You don't find such abuses at the hospitals, but if you add up the money lost, the dollar amount is incredible...
...But when the hospitals do it it's known as comprehensive care...
...In the end the costs are higher than for Medicaid...
...When we begin to finance medical care for the most politically conscious and articulate segment of the population, it's going to go through the ceiling...
...These three states had a tradition of generous public assistance and opted for ambitious programs...
...Nonprofit institutions reimbursed for costs on a step-down basis have little incentive to economize...
...Shady financial practices are reprehensible enough," Dr...
...about 2.5 cents of every federal tax dollar you pay goes for Medicaid...
...Few proponents of National Health Insurance, it is true, would argue that we have the resources to make all new medical technology and all elective procedures available on demand to the general population...
...The only area in which demand has grown substantially in the last ten years has been institutional care for the elderly...
...An individual policy, if they could get one, would be far more expensive and would provide fewer benefits...
...No one knows how much Blue Cross, Blue Shield, and private insurance rates have been inflated by questionable accounting practices and outright fraud...
...Even pro ponents of national health insurance such as Commissioner Bellin can understand the public's reservations, in view of Medicaid's disappointing record...
...The government aid programs have transformed some of the voluntary hospitals into what Dr...
...Many people would not even be eligible for the program because they had a preexisting disease or because they did not happen to work for the right company...
...But these fringe benefits are in no sense "free...
...The breakdown in 1975 was as follows: $100 million went to private doctors for office visits, $160 million to the city's voluntary (private, nonprofit) hospitals for ambulatory care...
...One way to start reducing the costs of primary care, say New York City officials, is to take it out of the hospitals...
...Cleaning the Augean stables calls for more than exposing fraud, though...
...This time bomb has to go off...
...While at the outset a family of four with an income of $6,000 would have received benefits, the cutoff is now set at $5,000...
...The Health Department now has two lawyers, a dozen investigators, and about 20 clerical helpers...
...But consider some of the programs that give medical benefits in return for cash premiums...
...Not that Medicaid should be expanded in its present form, if only because it is now so closely associated with welfare that a Medicaid card has become a kind of stigma...
...The maximum for any one surgical procedure would be $1,500, with 20 percent of the surgeon's fee added on for anesthesia...
...Some further financial relief might come if the Medicaid fee schedule for visits to a physician's office were raised to a level more in keeping with prevailing rates, although still below the charges for a hospital OPD...
...What we need is more of the same, and less expensive technology...
...It supports the chronically ill, nursing home patients, and victims of devastating illness who have exhausted private insurance benefits or would not be eligible for them in the first place...
Vol. 24 • September 1977 • No. 4
