The defrauders win

Our view : Senate rejection of anti-fraud law means those who bilk Medicaid need not worry about paying big fines as long as they can hide behind jobs

March 27, 2009

Your Honor, I was saving jobs."

Malefactors of every stripe ought to memorize that explanation. Next time they're in court facing a stiff penalty for wrongdoing, that's clearly what they ought to tell the judge. It's an argument that apparently persuaded the state Senate to shield those who commit fraud against the government from having to pay for it.

What nonsense. And what bad news for Maryland taxpayers. The Senate rejection this week of Gov. Martin O'Malley's proposal to crack down on Medicaid fraud is going to open up a gaping $11 million hole in next year's budget - that's how much additional revenue the governor's budget assumed would be generated by the new law.

The measure lost in a razor-thin 24-23 vote that likely would have gone the other way had any of four senators simply voted as he or she did on a similar measure last year. Baltimore's Nathaniel J. McFadden and Catherine E. Pugh and Prince George's County's C. Anthony Muse and Nathaniel Exum reversed themselves in the wake of intensive lobbying by a coalition of drug companies, hospitals and other health care providers who claimed that jobs would be lost if the bill passed.

Lost jobs? Isn't that a bit like saying Bernard L. Madoff shouldn't pay punitive damages to the people he swindled because it might force him to reduce his staff? Of course the scale of the crime involved isn't comparable - Medicaid fraud is far worse.

Maryland alone spends about $5 billion on Medicaid each year. With so much money changing hands, eliminating fraud - estimated to consume as much as 10 percent of the health care program's budget - should be of paramount concern to lawmakers.

What sort of fraud are we talking about? Generally, it involves an unscrupulous provider submitting claims he knows to be false. Not accidents, not occasional slip-ups, but deliberate behavior.

This wasn't a matter of the governor seeking some unusual authority, either. The federal government (and 22 other states) can seek the same triple-damage penalty at issue here. The difference is that the feds have a 10-year backlog of investigations that states like Maryland can address a lot faster. That's why federal law gives extra benefits to states that adopt these tougher penalties.

Senate President Thomas V. Mike Miller told reporters after the vote that he hoped the measure could be resurrected before the legislature adjourns next month, but that now seems unlikely. Instead, his chamber will stay on record as favoring perpetrators of fraud over the public interest, and no bogus excuses about mythical lost jobs change that.

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