Fraud Continues to Plague Medicaid System
Medicaid, the joint state and federal health insurance program designed to provide health care to the
poor, needy, disabled, and elderly, loses billions of dollars in losses every year. Soon, that number may
soon increase when the Affordable Care Act expands Medicaid coverage to millions more Americans.
Of the $400 billion spent on Medicaid last year, it's estimated that about 8% of it was lost to fraud and
Healthcare providers who file fraudulent claims cost the federal government alone $22 billion per
year. States also incur a significant loss because of such fraudulent claims.
Medicaid currently covers about 60 million people, though that number is expected to expand greatly
under the terms of the healthcare expansion law. Unless the Supreme Court overturns the Medicaid
provisions of the law, all states will have to adopt expanded Medicaid guidelines by 2014.
Many states are still dealing with the financial impact of the recession and are having difficulty paying
for Medicaid programs. Medicaid already makes up the single largest budget item on most, if not all,
state budgets. Many states have proposed drastic cutbacks in Medicaid programs to help deal with the
budget crisis, but all face increased Medicaid payments with the 2014 deadline.
Though Medicaid fraud currently accounts for billions of dollars every year, the amount lost to
fraudulent claims has been decreasing. The 8% lost to fraud and abuse in 2011 is down from 11% in
2008. However, because each state has its own Medicaid system, it's difficult for states to find a
uniform system that all can apply to help prevent fraud and abuse.
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