Medicare and Social Security Beyond Death?

Glitches in the Medicare system cost taxpayers $23 million over a three-year period for services provided to deceased people, the General Services Administration says.

GSA auditors say from 2009 to 2011, Medicare spent $8.2 million on medical equipment prescribed by doctors who had been dead for at least a year. The audit said that since 2008, glitches led to more than $700 million being paid to the deceased.

With about 2.5 million Americans passing away each year, the system often fails to keep track of who receives benefits. In one notable case, a son kept receiving his dead father’s federal benefits for 26 years before he was discovered. In another, a man was arrested for submitting $2.1 million in false Medicare claims, including 10 claims for beneficiaries who had died.

The Office of Management and Budget says $47.9 billion in “improper payments” were made in 2010, though some were later seen as legitimate. The Congressional Budget Office estimates that total Medicare spending was $528 billion in 2010. There are several avenues for fraud, including including phantom billing, patient billing and uploading and unbundling schemes which inflate bills by using a billing code which shows patients need expensive procedures.

The problem isn’t just Medicare. As of May 2012, the Social Security Administration had paid $31 million to approximately 1,546 deceased beneficiaries.

The Affordable Care Act does provide rewards to pursue physicians guilty of making fraudulent claims, and the Healthcare Reform Law provides for stricter penalties. But with millions of dollars annually lost to false claims, a case can easily be made that the federal bureaucracy is failing to interface with other government agencies to stop the fraud in the system.