Making Medicaid work

Our view: To fight the rising costs of health care insurance for the poor, Maryland needs broader authority to go after providers who commit fraud

Everyone makes mistakes. Despite their best efforts, doctors, hospitals and other health care providers make their share. So do government bureaucrats. But there's a big difference between an error and a deliberate act of fraud. Those who knowingly and deceptively create a false medical claim in order to bilk the government out of large sums of money deserve no sympathy whatsoever.

That's why one of the bigger errors made by members of the Maryland General Assembly last year was to reject a bill that would have helped the state crack down on Medicaid fraud. Legislation submitted by Gov. Martin O'Malley last January would have given the state the authority to seek triple damages in such cases.

The federal government already has similar power, and it's proven helpful to reducing false claims, but the 10-year backlog of cases is daunting. Maryland's fraud investigations are now hampered: Without some form of punitive damages, perpetrators end up returning their ill-gotten gains as if it was all little more than a no-interest loan.

But the legislation died on the Senate floor by a single vote, the victim of an onslaught of lobbying from the medical community and business interests that claimed it would increase health care costs. Never mind that the complaint was like saying some level of crime is fine because it keeps insurance companies in business.

Specifically, providers complained that provisions in the law meant to protect whistle-blowers would lead to disgruntled employees (and their lawyers) filing costly actions against health care providers with no legitimate cause. But that hasn't been the experience at the federal level. Meanwhile, about half the states - including some of the most politically conservative in the nation - have adopted anti-fraud laws with similar provisions.

That's because the more the state collects from the perpetrators of fraud, the less that must come from taxpayers, providers and beneficiaries. Thanks to the Senate's failure, the state was denied the estimated $11 million in penalties it likely would have received this fiscal year.

In the midst of a severe economic recession, Maryland has had to reduce both services and reimbursements. As much publicity as it generated, the choice to close an Eastern Shore mental health facility was just a small part of the budget reductions. Last year, the total health budget was reduced by more than $271 million to keep pace with falling tax revenues.

With the state facing a projected $1.8 billion deficit in the next fiscal year, Maryland can ill afford to go easy on Medicaid fraud yet again. Governor O'Malley says he will re-introduce the legislation, and we urge the legislature to pass it this year.

Still, there's room for other forms of savings in the $6 billion program. As a recent legislative audit indicated, the Department of Health and Mental Hygiene needs to keep a more accurate accounting of payments to providers made under the program. No doubt a proposed $50 million computer system would help, but there are interim steps that can be taken.