Medicare Fraud Costs Taxpayers More Than $60 Billion Each Year

"That's the stunning thing about it...from my standpoint, relatively simple fixes can be instituted and aren't then something's terribly wrong," Sloman said.

Obama Administration on Stopping Medicare Fraud

Earlier this week President Obama said stopping such fraud would help fund his ambitious health care plan.

"Nightline" asked Obama's Secretary of Health and Human Services, Kathleen Sebelius, how much money the administration is counting on saving over the next ten years.

"Well, right now, I think the estimates are somewhere in the $25 billion range," she said.

While that may sound like a lot, at the rate things are going, it isn't very ambitious; $1 trillion is likely to be stolen from Medicare in the same period.

Sen. Charles Grassley, R-Iowa, who has been holding hearings for decades on Medicare fraud, said he's worried the president's health care bill fails to address the problem at the heart of the matter: pay and chase. Medicare pays the criminals and then chases after them.

"What's in there is good," says Grassley, referring to the Medicare fraud provisions in the Administration's bill, "but it isn't as fundamental of a fix as we need. The fix is to shut down the check-wiring for suspected fraud until you find out whether there's real fraud of not."

When asked why the fix isn't part of the president's health care bill, Grassley said: "I hope it's an oversight, but except for saying it's an oversight, I can't give you a reason why it's not in there."

So we asked Secretary Sebelius. She said it was not an oversight.

"I think we have a difficult balance here," she said in an interview with "Nightline." "They can't just slow down payments willy-nilly because that's an unfair burden on the majority of providers who are legitimate."

In fact, Sebelius' staff later told us that despite what Sen. Grassley said, they already have the power to stop payments --- though it's an option they rarely use, even when there is clear evidence of fraud.

"Medicare very rarely suspends payment. Many of the criminals that are stealing from Medicare file the same claims over and over again for different patients," Ogrosky said. "If you have one hundred patients getting a dosage of a drug intended for chemo, they would be getting the same amount of the drug regardless of their body weight, regardless of the state of their diseases, regardless of their condition...if you were to ask any doctor, they would tell you that's impossible."

That should be good evidence of fraud, he said, yet over and over again, Medicare pays. Meanwhile, the vicious cycle continues: law enforcement continues to do its best to chase down the bad guys and the system continues to pump out the checks to the cheats.

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