It’s yet another case of government incompetency that’s like a swift kick in the stomach during a $16 trillion (growing by more than $3 billion daily) national debt crisis. Because the Social Security Administration can’t seem to provide accurate information on time, Medicare, the government insurance for the elderly, makes improper payments for services it shouldn’t even be financing.

During a recent two-year period U.S. taxpayers spent $92 million for the medical care of 2,600 illegal aliens and $34 million to treat 12,000 prisoners, who already get their healthcare needs met by states, according to separate federal audits. The fleecing was first reported a few days ago by a weekly publication that covers the healthcare industry.

The story cites two reports issued this month by the Department of Health and Human Services Office of Inspector General. The first reveals how Medicare, the government program that provides health insurance for people aged 65 and over and those with disabilities who have worked in the U.S., regularly pays for the healthcare costs of ineligible foreigners living in the country illegally.

During a sample probe that spanned from 2009 to 2011, investigators reviewed 133,541 claims on behalf of 2,575 unlawfully present beneficiaries with $91,620,548 in associated Medicare payments. The Centers for Medicare & Medicaid Services (CMS), the agency that runs the program, approved payments because the Social Security Administration didn’t give it verification data relating to unlawful presence in a timely manner, the probe found. When CMS got the information on time, it was able to flag illegal aliens who are not eligible for services.

Each year a chunk of the money paid for the inpatient and outpatient hospital care of illegal aliens. In 2009 the tab for those services was around $31 million, with $25 million in 2010 and nearly $10 million in 2011. The other high expenses were for physician services and skilled nursing facilities. This is only a small sampling so the cost could very well be much higher. The inspector general recommends implementing policies and procedures to recoup the “improper payments” rendered to unlawfully present beneficiaries. Since it’s not their money, the feds currently have no such process.

The second report identifies 135,805 Medicare beneficiaries who had been incarcerated at some point during calendar years 2009 through 2011 and were therefore not eligible for the program. This is because state’s pick up the healthcare costs of jailed populations. Auditors limited the review to 75,639 claims on behalf of 11,619 incarcerated beneficiaries with $33,587,634 in associated Medicare payments, so again, there are probably a lot more. Like in the case of illegal aliens, the feds have no process to recoup the money. That’s because it’s not coming out of their pocket.

1. Documents Uncovered

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has obtained documents from the Department of Health and Human Services regarding the controversial review of the prostate cancer treatment Provenge by the Centers for Medicare and Medicaid Services (CMS). Judicial Watch obtained the documents pursuant to a Freedom of Information Act (FOIA) lawsuit filed on January 3, 2011 (Judicial Watch v. Department of Health and Human Services (No. 11-0002)).

According to the documents, the purpose of this review, deemed a National Coverage Determination (NCD), is to determine if the FDA-approved Provenge treatment is “reasonable and necessary” and should therefore be reimbursed on a uniform and national level. The review was triggered by the fact that local Medicare contractors were not uniformly providing coverage for Provenge leading to multiple complaints by patients. Some contractors withdrew coverage in the middle of treatment. CMS is expected to post a “proposed decision” on its website March 30, 2011, with a final decision published 60 days after the public comment period for the proposed decision has ended.

Among the highlights from the documents uncovered by Judicial Watch:

• The documents include a CMS Q&A sheet that denies cost was a factor in the decision to review Provenge. However, a June 8, 2010, internal email uncovered by Judicial Watch from William D. Rogers, Director of the CMS Physicians Regulatory Issues Team, to Louis B. Jacques, CMS Director, Coverage Analysis Group, states: “We discussed this on the last CMD [Contract Medical Director] call. $93,000 per treatment adds four months to life, 27,000 patients a year $2.6 billion dollars a year.” Medicare and the FDA are legally prohibited from denying approval of a medical treatment based solely on cost. Obama administration officials have denied that the review of Provenge had anything to do with the treatment’s costs.

• A July 28, 2010, letter to Louis Jacques from Hans Bishop, Chief Operating Officer of Dendreon, the company that manufactures Provenge, and Mark Frohlich, Dendreon’s Chief Medical Officer, objecting to the “highly unusual” review of Provenge.

  While noting the “overwhelming clinical evidence” of Provenge’s effectiveness, and the FDA’s rigorous approval process, Dendreon asked the CMS to shut down the NDA: “We remind you that the patients we serve have late-stage cancer and few, if any, appealing treatment options available to them, with only chemotherapy as an FDA-approved alternative. Not only is Provenge clearly reasonable and necessary…but it provides an unambiguous survival benefit and real hope for patients battling their disease.” Dendreon argued to keep the system’s status quo, with local contractors making coverage decisions as coverage variations have “subsided.” The letter also suggests that coverage is required by law as a result of the FDA’s prior approval of the Provenge treatment for prostate cancer.

• An internal CMS email indicating that the government hired health insurance giant Blue Cross Blue Shield, identified in public documents as an “external entity,” to conduct a technological assessment of Provenge’s clinical effectiveness. The involvement of Blue Cross Blue Shield raises concerns about a potential conflict of interest as private insurers use Medicare’s coverage determinations in setting their own coverage limits.

• The documents include back-and-forth discussions between CMS and Dendreon about “comparative effectiveness.” In response to Dendreon’s request for clarification regarding the term “comparative effectiveness,” Jacque’s writes in a July 22, 2010, email to a CMS colleague: “Why do they need clarification?…We need to maintain an arms [sic] length relationship with them. We do no[t] owe them any questions.” Many have criticized comparative effectiveness research as a method to limit needed health care in order to reduce costs (i.e., death panels).

A number of the documents were distributed to CMS Administrator Donald Berwick, dubbed “Death Panel Donald” for his public comments endorsing health care rationing.

“Clearly, there is enormous public interest in the CMS decision to review Provenge given all of the talk of health care rationing and death panels associated with Obamacare. The American people get very nervous when the government decides to meddle in their health care and they have every right to be nervous given that we have unaccountable czars like Donald Berwick running Medicare and Medicaid. One can’t help but conclude from a review of these documents that there is a strong bias against Provenge in the Obamacare bureaucracy,” stated Judicial Watch President Tom Fitton.

A recent study shows that in 2010, only two of the 11 National Coverage Determinations led to “unrestricted positive coverage decisions.” The remaining decisions mandated restrictions of coverage of one type or another.

Documents Uncovered

• First release – February 2, 2011
• Second release – February 24, 2011
• Third release – March 23, 2011

1. Judicial Watch Investigates Charge HHS is Unlawfully Rationing Healthcare by Targeting FDA-approved Medical Treatment Based on Cost
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Judicial Watch Investigates Charge HHS is Unlawfully Rationing Healthcare by Targeting FDA-approved Medical Treatment Based on Cost

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