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Mount an Aggressive Attack on Fraud with Supply-Chain Visibility

April 27, 2010 – 12:48 pm

I left a message at the White House for Communications Director Dan Pfeiffer about his blog today on Health Reform. He wrote that the health reform law will strengthen Medicare “by taking aggressive new steps to fight waste, fraud, and abuse within the system.”

Fraud itself could amount to $60 billion EVERY YEAR, reported ABC News last month when it shared a Nightline investigation into Medicare fraud.

That’s a heck of a lot of tax dollars that could instead be spent on making healthcare reform work. Were these potential savings even considered by the economic experts at the Health and Human Services Department who analyzed the law and found that it “falls short of the president’s goal of controlling runaway costs”? (We shared news of that report last week in our daily e-newsletter.)

I wonder what President Obama’s “aggressive new steps” could be? More investigators, more muscle? Another report from ABC just yesterday paints a pretty rough picture of the criminal element behind such fraud.

But why not fight these criminals through increased supply-chain visibility? If unique product serial numbers that could be verified through an exchange system much like the financial industry uses were required for Medicare reimbursement, the government could at least stop reimbursing the phantom pharmacies that Senator Chuck Grassley describes in his letter to HHS Secretary Kathleen Sebelius.

I have also heard that electronic pedigrees could arm prosecutors with the evidence needed to convict criminals once captured. Paper trails are much hard to follow.

I am waiting for Mr. Pfeiffer’s call, so I will let you know what I hear. In the meantime, feel free to suggest your own ideas for fighting fraud. We have shared industry concerns that increased taxes levied against the industry would be tremendously burdensome and could stifle innovation by cutting R&D.

Instead, wouldn’t it be great news if fraud prevention could pay for healthcare reform?

Daphne Allen

  1. One Response to “Mount an Aggressive Attack on Fraud with Supply-Chain Visibility”

  2. I found a thoughtful blog (from an economics student!) while researching this story–along with some harsh comments: http://www.theticker.org/about/2.8217/it-s-too-early-for-health-reform-1.2241821

    By dallen on Apr 27, 2010

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