Why dont we see anyone talking about the high cost of corruption and fraud in medicine's health care.?

[Raymond]

Why dont we see anyone talking about the high cost of corruption and
fraud in medicine's health care? Conservative figugres start at 60
billion a tear. Fraud involves doctors, nurses, hospitals, and all
other providers of medical products.
Obama knows about it and has done something about it. Arrests are made
daily and billions have been recovered as a result.

In Texas, a supplier of durable medical equipment was found guilty of
five counts ... the estimated cost of fraud and abuse ranges from $100–
170 billion annually. .....

ALSO SEE:
Medicare Fraud: A $60 Billion Crime - CBS News
Of all the problems facing the United States right now, none are more
important than health care.

President Obama says rising costs are driving huge federal budget
deficits that imperil our future, and that there is enough waste and
fraud in the system to pay for health care reform if it was
eliminated.
http://www.cbsnews.com/2100-18560_162-5414390.html

Fraud and Abuse in Federal Programs.
The future of American health care looks even more expensive
The federal government is a vast money transfer machine. It spends
hundreds of billions of taxpayer dollars each year on subsidy programs—
from the massive Medicare to hundreds of more obscure programs that
most people have never heard of. There are more than 1,800 federal
subsidy programs.1

With such a huge array of handouts, the federal budget has become
victim to large-scale fraud and abuse—that is, people taking
government benefits to which they are not entitled. Just about every
subsidy program suffers from fraud and abuse, and we illustrate the
problems here with discussions of Medicare, Medicaid, housing
programs, student aid, and farm subsidies. Losses to federal taxpayers
from fraud, abuse, and other types of improper payments are in the
ballpark of $100 billion a year or more.2

There have been efforts to reduce improper payments, but the abuse of
federal programs continues at high levels. We think that federal
subsidy programs should be cut because they harm the economy and are
unfair to taxpayers.3 But endemic fraud and abuse provides an
additional reason to pursue cuts and terminations to many federal
programs.


Medicare and Medicaid
Fraud in the two main federal health programs is huge, imposing costs
on taxpayers at least in the tens of billions of dollars each year. As
broad-based government programs, the massive size of Medicare and
Medicaid makes them very difficult to police. Medicare, for example,
processes 1.2 billion claims each year by computer, generally without
human eyes checking them for accuracy.

Let’s look first at the fraud and abuse problems in Medicare. The
Government Accountability Office estimates that there are about $17
billion of improper Medicare payments each year, including fraudulent
and erroneous overpayments to health care providers. 4 That figure
does not include the huge new prescription drug benefit, which is
thought to be highly susceptible to abuse.

Other estimates of improper Medicare payments are higher. Malcolm
Sparrow of Harvard University, a top specialist in health care fraud,
argues that estimates by federal auditors do not measure all types of
fraud. He believes that as much as 20 percent of federal health
program budgets are consumed by fraud and abuse, which would be about
$85 billion a year for Medicare.5

Sparrow says that criminals can rip off federal health care programs
simply by carefully filling out and submitting the proper forms, and
then the “claims will be paid in full and on time, without a hiccup,
by a computer, and with no human involvement at all.”6 He argues that
the abuses do not just stem from occasional overbillings by doctors,
but involves organized looting of health care programs by criminals.

A perfect example of what Sparrow is talking about was reported by the
Washington Post in 2008. A high-school dropout with a laptop computer
was able to single-handedly cheat Medicare out of $105 million by
electronically submitting 140,000 fraudulent claims over four years
for equipment and services.7

There are many ways that Medicare gets ripped off: “Billing by health
care providers for services not rendered, billing for products not
delivered, misrepresenting services, unbundling services, billing for
medically unnecessary services, duplicate billing, increasing units of
service which are subject to a payment rate, falsifying cost reports
resulting in increased payment to the health care provider, kickbacks,
and on and on.”8 You can read about the different types of fraud on
Medicare’s website.9

One area of rampant fraud is Medicare’s medical equipment subsidies.10
One scam is for doctors to steer patients into buying motorized
wheelchairs that they don’t really need, but that Medicare pays for.
Then the doctors receive kickbacks from wheelchair supply companies or
other operatives. A 2008 report by Senate investigators found that 30
percent of medical equipment reimbursements that they examined
appeared to be fraudulent.11

Another area of fraud is Medicare’s home health care benefits.
Medicare pays for home visits by health professionals under certain
limited conditions, but patients find ways to illegally get around
those limits. In addition, criminal gangs have simply looted this
program by submitting false claims.12 The costs of Medicare home
health care coverage soared 44 percent over the last five years, and
fraud appears to be an important cause of the increase.13 Auditors
have been concerned about fraud in home health care for years, but the
problem never seems to get solved.

The bigger Medicare gets, the more fraud there is. The newest subsidy—
the $60 billion a year prescription drug benefit—is thought to be
particularly susceptible to abuse.14 A physicians’ publication noted
that the benefit was “staggeringly complicated and largely
incomprehensible to the very population it was intended to help. It’s
also ripe with opportunities for the dishonest and fraught with traps
for the unwary. … The drug program’s very complexity is a source of
fraud.”15

The Medicaid program also has a giant fraud and abuse problem. The GAO
puts the cost of improper Medicaid payments at $33 billion, or about
10.5 percent of the program’s total spending.16 But if improper
payments are 20 percent of the program’s cost, as Malcolm Sparrow
thinks might be the case, that would be a $63 billion annual loss to
taxpayers.17

New York’s Medicaid is especially fraud-ridden. The former chief
investigator of the state’s Medicaid fraud office believes that about
10 percent of the state’s Medicaid budget is consumed by pure fraud,
while another 20 to 30 percent is consumed by dubious spending that
might not cross the line of being outright criminal.18

A 2005 investigation by the New York Times found remarkably brazen
examples of fraud and abuse in New York’s Medicaid. The article noted
that the program has “become so huge, so complex, and so lightly
policed that it is easily exploited … the program has been misspending
billions of dollars annually because of fraud, waste, and
profiteering.”19 Here are some of the findings:

•A dentist stole more than $1 million from New York’s Medicaid by
making claims for fictitious patients and procedures. She even had the
chutzpah to make claims for 991 procedures supposedly performed in a
single day.
•Medicaid’s subsidies for handicapped transportation are widely
abused. The program pays $50 per trip for handicapped persons to go to
doctor’s appointments, but investigators found that many people using
the service were not handicapped and that many transportation
companies were rigging the system to earn unjustified profits.
•Schools across the state charged Medicaid more than $1 billion for
unneeded or unprovided special education activities as a way to bilk
the state out of additional Medicaid grant money.
•Criminal gangs diverted Medicaid-covered muscle-building drugs that
were intended for AIDS patients to bodybuilders.
Similar schemes to bilk federal health programs are routinely
uncovered across the nation. Federal investigators say that they play
“whack-a-mole” with organized criminals, because when they crack down
on them in one area of the country, they move to a different area and
continue bilking federal health programs.20

A classic type of fraud in both Medicare and Medicaid is double-
billing. In one recent case, the University of Medicine and Dentistry
of New Jersey double-billed Medicaid repeatedly over the years by
directly submitting claims for outpatient physician services, even as
doctors working in the hospital’s outpatient centers were submitting
their own claims for exactly the same procedures.21

Another area of fraud is Medicaid’s long-term care benefits, which
cover the costs of nursing homes and home care for the elderly poor.
Medicaid pays about half of the costs of all long-term care in the
nation. The program has complex rules for eligibility related to one’s
income and financial assets. But nursing homes are expensive, and so
the program creates incentives for middle- and higher-income families
to try and qualify for it. Indeed, an industry of financial
consultants helps seniors hide their income and assets so that they
become eligible. This sort of abuse costs taxpayers about one-fifth of
the program’s cost, or about $13 billion in 2009.22

One reason why Medicaid has high levels of fraud is that it is an open-
ended “matching” program. The states administer the program and decide
how much to spend, but the federal government pays more than half of
the costs. That creates a disincentive for state officials to worry
too much about fraud and abuse. Indeed, state governments themselves
have a history of abusing Medicaid by creating schemes to improperly
boost their receipt of federal matching dollars. The Washington Post
rightly called these state schemes a “swindle,” but noted the
political resistance to doing anything about it.23 One solution to
these problems is to turn Medicaid into a block grant and freeze the
amount of aid to each state. That would immediately give states a big
incentive to cut all types of waste, fraud, and abuse.

In sum, the magnitude and complexity of federal health programs
results in a huge and ongoing waste of taxpayer funds. Sparrow argues
that health care fraud and abuse “might be as low as one hundred
billion. More likely two or three. Possibly four or five” hundred
billion.24 The Inspector General of the Department of Health and Human
Service told Congress in 2009: “Although it is not possible to measure
precisely the extent of fraud in Medicare and Medicaid, everywhere it
looks the Office of Inspector General continues to find fraud against
these programs.”25


Housing Subsidies
Federal housing programs have long been a ripe target for fraud and
abuse. In 1971, Time discussed a scandal at the Federal Housing
Administration in which “real estate speculators used the program to
make huge profits at the expense of the poor through what amounts to
sheer fraud.”26 The article also discussed a scandal from the 1950s
whereby “builders pocketed millions of dollars of unearned profit from
mortgage loans that exceeded the cost of construction” under a federal
program. The magazine concluded that “whenever the government writes a
blank check to the housing industry, some sort of scandal is likely to
result.”27

In the 1980s, huge scandals broke out at the Department of Housing and
Urban Development involving influence-peddling and gross
mismanagement, costing taxpayers billions of dollars.28 Senior HUD
staff were using their positions for personal gain, and when they left
HUD they used their inside contacts to win subsidies and contracts.29
HUD Secretary Sam Pierce favored friends and political allies with
contracts, and his mismanagement allowed HUD programs to become
targets for abuse by financial and real estate interests.30

Today, HUD provides a huge range of subsidies to state and local
governments, real estate businesses, financial institutions, and
nonprofit groups. The largest share of HUD’s budget goes toward rental
subsidies for low-income tenants. There are about $1 billion in
erroneous and fraudulent overpayments of these subsidies each year,
according to the GAO.31 Tenants make false claims to gain eligibility
for rental subsidies, and local public housing authorities (PHAs) have
often abused these federal monies.

Public housing is another area of abuse. HUD provides about $8 billion
a year to more than 2,000 PHAs. PHAs are infamous for their
mismanagement, corruption, and wasteful spending.32

HUD is supposed to oversee the PHAs, but its efforts leave a lot to be
desired. The Miami Herald won a Pulitzer Prize in 2006 for its series
exposing fraud and corruption in Miami-Dade’s PHA—a PHA that had
passed HUD audits.33 Here are some of the abuses uncovered by the
Herald:34

•The PHA gave developers and nonprofit groups with political
connections millions of dollars to build affordable housing, but they
ended up building shoddy houses or no houses at all.
•HUD gave the PHA $35 million to tear down dilapidated public housing
and replace it with new affordable housing. Six years later, half the
money was gone, and only three houses had been built. The agency
frittered away its money on staff salaries and consultants.
•Instead of selling new houses to low-income buyers, the PHA allowed
developers to make sales to wealthy investors who then “flipped” them
for a profit.
The Miami-Dade problems are far from unique. For decades, PHAs across
the nation have been mishandling taxpayer money. Unfortunately, HUD
rarely cuts off the mismanaged PHAs. A USA Today article counted 61
PHAs that received funding from the 2009 federal stimulus bill despite
repeated financial mismanagement.35

Another area of ongoing abuse is the Federal Housing Administration’s
mortgage loan insurance system. Buyers abuse the system by obtaining
loans under false pretenses, and lenders abuse the system by issuing
loans for more than properties are worth. These sorts of fraud
increase the risks of default, which ultimately costs the taxpayers.
As an example, a New Jersey underwriter routinely falsified employment
verification documents to obtain FHA-insured mortgages for unqualified
borrowers, which resulted in $10 million in losses after 66 mortgages
defaulted in 2007.36

In sum, programs for public housing, rental assistance, and housing
finance have been magnets for fraud and abuse for decades. The
Department of Housing and Urban Development ought to be dismantled,
and its poor record on controlling fraud and abuse is one good reason
why.


Student Loans
Federal student-aid programs have long been subject to fraud and
abuse. The three main culprits are students and their families,
educational institutions, and lending companies. It is difficult to
stop the cheating in student loan programs because they “are large,
complex, and inherently risky,” according to the Inspector General of
the Department of Education.37 Federal student loan programs involve
more than 6,000 postsecondary institutions and more than 3,000
lenders.

Students and their families cheat aid programs by falsely reporting
their income level and other items in order to garner larger benefits.
With the Pell college grant program, for example, this type of fraud
costs taxpayers hundreds of millions of dollars per year.38 Another
abuse is that many students simply decide not to pay back their
federal student loans. In 2001, the GAO found that there were more
than $20 billion of student loans in default.39

Educational institutions often pilfer money meant for students. Under
most student loan and grant programs, federal aid is sent to thousands
of educational institutions, which are supposed to distribute it to
eligible students. However, that distribution system has attracted
swarms of shady schools and administrators over the decades that
pocket the federal money at the expense of students and taxpayers.

A string of scandals in the early 1990s made clear the magnitude of
the problem. One scandal regarded the trade school American Career
Training Corporation in Florida. The school recruited new “students”
at housing projects and helped them take out loans.40 The school
owners received tens of millions of dollars in federally guaranteed
student loans, and simply pocketed it. Another scheme involved 21
Jewish schools in New York State that used millions of dollars in Pell
grants to line their pockets while spending little on education.41 Yet
another scandal at the time involved owners of Advanced Business
College in Puerto Rico, who used Pell grants to buy $3 million worth
of sports cars and real estate for themselves.

A Senate investigation in 1991 found that student loan programs were
“plagued with fraud and abuse at every level,” which cost taxpayers
billions of dollars.42 The investigation accused the Department of
Education of “gross mismanagement, ineptitude, and neglect,” finding
that it had a “dismal record” of combating loan abuses.43 Losses from
the student loan program totaled an enormous $13 billion between 1983
and 1990. In 1994, the department admitted that it was losing a
staggering $3 billion or more annually to waste, fraud, and loan
defaults. Education Secretary Richard Riley called the department’s
oversight “worse than lax.”44

Today, fraud and abuse may have been reduced from the extraordinarily
high levels of the 1980s and 1990s, but there are still large amounts
of waste. In 2002, a GAO investigation revealed how easy it was to
scam the student loan programs by simply sending in applications under
fake student names.45 In 2005, an investigation found that owners of a
company called the CSC Institute stole $4.3 million of the $13 million
it received in Pell grants.46 The GAO currently estimates that
taxpayers lose more than $1 billion a year to fraud and abuse in
student aid programs.47

A new scandal involving financial institutions garnering excessively
high profits from student loans has rocked the student-aid industry in
recent years. Under the Federal Family Education Loan Program, dozens
of loan originators figured out how to earn a 9.5 percent guaranteed
return from the government, even though market interest rates have
been much lower. Lenders have been able to earn billions of dollars at
taxpayer expense. In response, some policymakers argue that private
lenders should be cut out of the federal student loan process, and
that all lending ought to flow directly from the Department of
Education. But the department has been a terrible financial manager of
its aid programs, including its direct-loan programs. Thus, the best
reform would be to completely terminate the federal role in student
aid, and leave the activity to market-based private lending and to
charitable organizations.

In 2007, Secretary of Education, Margaret Spellings, testified to
Congress that “federal student aid is crying out for reform. The
system is redundant, it’s Byzantine, and it’s broken. In fact, it’s
often more difficult for students to get aid than it is for bad actors
to game the system.”48 She’s right, but the system should be ended,
not reformed.


Farm Subsidies
The U.S. Department of Agriculture distributes more than $15 billion
in cash subsidies to farmers and owners of farmland each year.49 More
than 800,000 farmers and landowners receive subsidies each year, but
the payments are heavily tilted toward the largest producers.50
Indeed, the largest 10 percent of recipients typically receive about
72 percent of all subsidy payments.51 In 2007, the average income of
farm households was $86,223, or 28 percent higher than the average of
all U.S. households.52

The biggest scandal with farm subsidies is that they exist at all, as
discussed elsewhere.53 But fraud and abuse in farm programs add insult
to injury for taxpayers. One GAO study found that improper or
fraudulent farm-subsidy payments are as much as half a billion dollars
a year.54 But other GAO studies make clear that the USDA doesn’t have
a good handle on how much cheating is actually going on. For example,
the USDA does not adequately police the income eligibility limits on
subsidy programs.55

Fraud and abuse in the farm programs takes many forms. Congress puts
limits on subsidy payments to particular farmers, but farmers create
complex business structures to get around those limits.56 Farmers are
supposed to pay back loans, but farm loan programs have high
delinquency rates.57

Sloppy administration by the USDA makes cheating easier. A 2007 GAO
report found that the USDA paid $1.1 billion in subsidies over six
years to 170,000 deceased individuals.58 There is also the problem of
“emergency” farm payments being handed out willy-nilly. After adverse
events such as droughts, Congress often dishes out emergency payments
to farmers who don’t need them or who have not even asked for them.59
In addition, some farmers will claim to have experienced crop damage
even when they haven’t in order to receive subsidy payments.60

The government response to a drought in 2003 illustrates how emergency
subsidies get wasted. Ranchers needed feed for their cattle because of
a drought, and the government responded by providing some of its large
stockpile of powdered milk. However, much of the free milk ended up
being illegally diverted to other uses, which allowed speculators to
earn large profits at taxpayer expense.61

Finally, the federal crop insurance system operates in a manner that
enriches private insurance companies at the expense of taxpayers. The
companies receive federal subsidies for providing farm insurance, but
those subsidies are not passed through to farmers in the form of lower
premiums. Instead, the companies operate like a cartel and are able to
earn high profits from excessive premiums, all at taxpayer expense.62


Other Federal Programs
Many other federal programs suffer from substantial fraud and abuse.
The data cited in the following bullets are from a 2009 GAO report on
improper payments, unless otherwise noted:63

•Food Stamps. This welfare program is a target for fraud because it is
so large and complex. The government must keep track of millions of
individuals to accurately document their eligibility while keeping
tabs on the 160,000 retailers who deal in food stamps to look for
illegal trafficking. In the past, the program spawned a huge black
market as recipients exchanged their food stamps for cash on the
street. Today, food stamps are issued on electronic cards, and fraud
levels have been reduced. Nonetheless, the program’s improper payment
rate is still about 6 percent, costing taxpayers about $1.7 billion
annually.
•School Lunches. A large share of subsidized school meals are taken by
families with incomes above the legal cutoff points. Program audits
and statistical data have found that about one-quarter of those
receiving free and reduced-cost lunches are not eligible.64 Those
unjustified benefits cost taxpayers about $1.4 billion annually.
•Supplemental Security Income. This program pays out $4.6 billion in
improper and fraudulent benefits annually.
•Children’s Health Insurance Program. About 15 percent, or more than
$800 million annually, of CHIP benefits are improper or fraudulent.
•Child Care programs. The federal child care, foster care, and Head
Start programs pay out about $900 million in improper and fraudulent
benefits annually.
•Temporary Assistance for Needy Families. This program pays out $1.7
billion annually in improper and fraudulent benefits.
•Unemployment Insurance. Almost $4 billion of annual UI benefits are
improper or fraudulent.
•Universal Service Fund. This Federal Communications Commission
program pays out almost $1.3 billion annually in improper and
fraudulent subsidies.
•Earned Income Tax Credit. Almost one-third of EITC payments—$12
billion annually—are improper or fraudulent.
•Veterans Affairs. This department loses at least $800 million
annually on improper and fraudulent payments, but the total is likely
higher because losses are not reported for all of the department’s
programs.
•Emergency Response. Subsidies provided in the wake of emergencies are
highly susceptible to fraud and abuse because funds are usually pushed
out the door quickly with little planning or oversight. Federal
recovery aid after Hurricanes Katrina and Rita in 2005 were subject to
high levels of waste. The GAO estimated that about $1 billion of
payments by the Federal Emergency Management Agency made in just the
first sixth months after the storms were “improper and potentially
fraudulent.”65
•Procurement. We have focused on fraud and abuse in federal subsidy
programs. But another area of fraud and abuse is federal contracting.
Most people have heard of this problem in defense procurement—weapons
contractors that rip off federal taxpayers with inflated billings. But
fraud and abuse in contracting are government-wide problems, which
hamper the ability of government programs to operate efficiently.

Conclusions
All kinds of people are using the federal budget as a cookie jar to
garner benefits to which they are not entitled. Families seek improper
benefits through subsidies such as the school lunch program. Hospitals
rip off taxpayers by double billing Medicare and Medicaid. Criminals
loot subsidy programs such as food stamps. Owners of nonprofit groups
that are supposed to aid the needy line their own pockets with
taxpayer funds.

There have been many efforts to end such abuses, but federal programs
are hugely complex and they deliver benefits to thousands or millions
of recipients. Federal agencies are often sloppy in their
administration of programs, and Congress provides little serious
oversight.

Fraud and abuse generate a catch-22 for policymakers who support
spending programs. On the one hand, fraud is clearly a waste of money
and should be stopped. On the other hand, minimizing fraud requires
extensive bureaucratic rules and heavy enforcement, which reduces
program efficiency. In a recent article on defense procurement, the
Washington Post noted that reforms a decade ago intended to make the
system more efficient and entrepreneurial have created the serious
side-effect of increasing various forms of abuse.66

A further problem is that Congress has little political incentive to
cut down on waste and abuse. That’s because costs are benefits to
politicians. If investigators find abuse by, say, a defense contractor
in a member’s congressional district, that member will usually be
inclined to take the contractor’s view of things. After all, if the
contractor overbilled federal taxpayers, it just means that more money
was spent in the member’s district. Of course, members of Congress
must look as if they are on the side of the taxpayer, and so they will
hold occasional oversight hearings to investigate abuses. But
sustained congressional efforts to really combat waste, fraud, and
abuse in the federal budget are rare.

In sum, fraud and abuse is a serious shortcoming of many federal
programs. It is appalling that $100 billion a year—or perhaps much more
—of benefits are misappropriated by people not entitled to them.
Federal subsidies for industries such as health care and education
ought to be cut because private markets can usually perform these
activities better than governments. But the endemic fraud and abuse
experienced by many government programs provides an additional reason
to pursue major cuts in the federal budget.


--------------------------------------------------------------------------------

1. Chris Edwards, “Number of Federal Subsidy Programs Tops 1,800,”
Cato Institute Tax and Budget Bulletin no. 56, April 2009.

2. The Government Accountability Office found $72 billion of improper
payments in 2008, but that estimate did not include all federal
programs and it may low-ball the actual losses in various ways. See
Government Accountability Office, “Improper Payments: Progress Made
but Challenges Remain in Estimating and Reducing Improper Payments,”
GAO-09-628T, April 22, 2009. Another useful background study is Senate
Committee on Government Affairs, Senator Fred Thompson, “Government at
the Brink,” Volume 1, June 2001.

3. See www.downsizinggovernment.org and www.cato.org for discussions
about the problems with particular subsidy programs.

4. Government Accountability Office, “Improper Payments: Progress Made
but Challenges Remain in Estimating and Reducing Improper Payments,”
GAO-09-628T, April 22, 2009.

5. Malcolm Sparrow, “Criminal Prosecution as a Deterrent to Health
Care Fraud,” Testimony to the Senate Committee on the Judiciary,
Subcommittee on Crime and Drugs, May 20, 2009.

6. Malcolm Sparrow, “Criminal Prosecution as a Deterrent to Health
Care Fraud,” Testimony to the Senate Committee on the Judiciary,
Subcommittee on Crime and Drugs, May 20, 2009.

7. Carrie Johnson, “Medical Fraud a Growing Problem,” Washington Post,
June 13, 2008, p. A1.

8. http://medicare-fraud.net.

9. www.hhs.gov/stopmedicarefraud.

10. See Government Accountability Office, “Medicare: Covert Testing
Exposes Weaknesses in the Durable Medical Equipment Supplier Screening
Process,” GAO-08-955, July 2008.

11. Estimate cited in Associated Press, “Probe: Medicare Paid Billions
in Suspect Claims,” September 24, 2008.

12. www.hhs.gov/news/press/2009pres/06/20090626a.html.

13. See Government Accountability Office, “Medicare: Improvements
Needed to Address Improper Payments in Home Health,” GAO-09-185,
February 2009.

14. Nathan Vardi, “Rx for Fraud,” Forbes, June 20, 2005, p. 124. See
also Government Accountability Office, “Medicare Part D: Some Plan
Sponsors Have Not Completely Implemented Fraud and Abuse Programs, and
CMS Oversight Has Been Limited,” GAO-08-760, July 2008.

15. William H. Maruca, “Fraud Enforcement under Medicare Part D,”
Physician’s News Digest, February 2006, www.physiciansnews.com/law/206maruca.html.

16. Government Accountability Office, “Improper Payments: Progress
Made but Challenges Remain in Estimating and Reducing Improper
Payments,” GAO-09-628T, April 22, 2009, p. 12.

17. Malcolm Sparrow, “Criminal Prosecution as a Deterrent to Health
Care Fraud,” Testimony to the Senate Committee on the Judiciary,
Subcommittee on Crime and Drugs, May 20, 2009.

18. Estimate cited in Clifford J. Levy and Michael Luo, “New York
Medicaid Fraud May Reach Into Billions,” New York Times, July 18,
2005, p. A1.

19. Clifford J. Levy and Michael Luo, “New York Medicaid Fraud May
Reach Into Billions,” New York Times, July 18, 2005, p. A1.

20. Carrie Johnson, “Medical Fraud a Growing Problem,” Washington
Post, June 13, 2008, p. A1.

21. http://medicare-fraud.net.

22. Michelle Higgins, “Getting Poor on Purpose,” Wall Street Journal,
February 25, 2003, p. D1. And see Stephen A. Moses, “Aging America’s
Achilles’ Heel: Medicaid Long-Term Care,” Cato Institute Policy
Analysis no. 549, September 1, 2005.

23. Washington Post, “Medicaid Money Laundering,” Editorial, May 19,
2008.

24. Malcolm Sparrow, “Criminal Prosecution as a Deterrent to Health
Care Fraud,” Testimony to the Senate Committee on the Judiciary,
Subcommittee on Crime and Drugs, May 20, 2009.

25. Daniel R. Levinson, Inspector General, Department of Health and
Human Services, “Combating Fraud, Waste, and Abuse in Medicare and
Medicaid,” Testimony before the Senate Special Committee on Aging, May
6, 2009.

26. Time, “Subsidized Fraud,” January 18, 1971.

27. Time, “Subsidized Fraud,” January 18, 1971.

28. New York Times, “Still Rising: the HUD Bill, and Smell,”
Editorial, July 13, 1989, p. A22.

29. Steven V. Roberts, Joseph P. Shapiro, and Ronald A. Taylor, “The
Undoing of Silent Sam Pierce,” U.S. News & World Report, September 18,
1989, p. 29.

30. www.downsizinggovernment.org/hud/scandals.

31. Government Accountability Office, “Improper Payments: Progress
Made but Challenges Remain in Estimating and Reducing Improper
Payments,” GAO-09-628T, April 22, 2009, pp. 18–19.

32. See Government Accountability Office, “Public Housing: HUD’s
Oversight of Housing Agencies Should Focus More on Inappropriate Use
of Program Funds,” GAO-09-33, June 2009.

33. Government Accountability Office, “Public Housing: HUD’s Oversight
of Housing Agencies Should Focus More on Inappropriate Use of Program
Funds,” GAO-09-33, June 2009, p. 9.

34. The Miami Herald series can be found at www.miamiherald.com/multimedia/news/houseoflies.

35. Brad Heath, “Housing Agencies Faulted in Audits to Get $300M of
Stimulus,” USA Today, April 7, 2009.

36. Department of Housing and Urban Development, Office of the
Inspector General, “Semiannual Report to Congress: October 1, 2007,
through March 31, 2008,” HUD-2008-01-OIG, p. 13.

37. John Higgins, Inspector General, Department of Education,
Testimony before the House Committee on Government Reform, May 26,
2005.

38. John Higgins, Inspector General, Department of Education,
Testimony before the House Committee on Government Reform, May 26,
2005.

39. Government Accountability Office, “Federal Budget: Opportunities
for Oversight and Improved Use of Taxpayer Funds,” GAO-03-922T, June
18, 2003, p. 17.

40. Karl Vick, “Florida Trade School Probed for Loan Abuse,” St.
Petersburg Times, February 27, 1990.

41. Michael Winerip, “Billions for School Are Lost in Fraud, Waste and
Abuse,” New York Times, February 2, 1994.

42. Quoted in Jason DeParle, “Panel Finds Wide Abuse in Student Loan
Program,” New York Times, May 21, 1991.

43. Quoted in Jason DeParle, “Panel Finds Wide Abuse in Student Loan
Program,” New York Times, May 21, 1991.

44. Michael Winerip, “Billions for School Are Lost in Fraud, Waste and
Abuse,” New York Times, February 2, 1994.

45. Government Accountability Office, “Department of Education:
Guaranteed Student Loan Program Vulnerabilities,” Letter to Senator
Susan Collins, November 21, 2002.

46. John Shiffman, “Pair Accused of Taking $4.3 Million from Grants,”
Philadelphia Inquirer, July 1, 2005.

47. Government Accountability Office, “Improper Payments: Progress
Made but Challenges Remain in Estimating and Reducing Improper
Payments,” GAO-09-628T, April 22, 2009, Appendix 1.

48. Margaret Spellings, Secretary of Education, Testimony before the
House Committee on Education and Labor, May 10, 2007.

49. Budget of the United States Government: FY2010, Historical Tables,
Table 3.2. This is spending on budget function 351.

50. www.ers.usda.gov/briefing/farmincome/govtpaybyfarmtype.htm.

51. Environmental Working Group, Farm Subsidy Database, www.ewg.org/farm.
This is a nine-year average, from 1995 to 2003.

52. www.ers.usda.gov/briefing/wellbeing/farmhouseincome.htm.

53. www.downsizinggovernment.org/agriculture/subsidies.

54. Brian Faler, “Farm Subsidy Rules Called Too Vague; Money Going to
Undeserving, GAO Says,” Washington Post, July 1, 2004, p. A21.

55. See Government Accountability Office, “Federal Farm Programs: USDA
Needs to Strengthen Controls to Prevent Payments to Individuals Who
Exceed Income Eligibility Limits,” GAO-09-67, October 2008.

56. Gilbert M. Gaul, “Too Big for Disaster Aid, Farmer Chooses to
Divide and Conquer,” Washington Post, October 15, 2006, p. A1.

57. Government Accountability Office, “Farm Loan Programs:
Improvements in the Loan Portfolio but Continued Monitoring Needed,”
GAO-01-732T, May 16, 2001, p. 1.

58. Government Accountability Office, “Federal Farm Programs: USDA
Needs to Strengthen Controls to Prevent Improper Payments to Estates
and Deceased Individuals,” GAO-07-818, July 2007.

59. Gilbert M. Gaul, Dan Morgan, and Sarah Cohen, “No Drought Required
for Federal Drought Aid,” Washington Post, July 18, 2006, p. A1. See
also Gilbert M. Gaul, Dan Morgan, and Sarah Cohen, “Aid is a Bumper
Crop for Farmers,” Washington Post, October 15, 2006, p. A1.

60. Gilbert M. Gaul, Dan Morgan, and Sarah Cohen, “No Drought Required
for Federal Drought Aid,” Washington Post, July 18, 2006, p. A1. See
also Gilbert M. Gaul, Dan Morgan, and Sarah Cohen, “Aid Is a Bumper
Crop for Farmers,” Washington Post, October 15, 2006, p. A1.

61. Gilbert M. Gaul, Sarah Cohen, and Dan Morgan, “Aid to Ranchers Was
Diverted for Big Profits,” Washington Post, July 19, 2006, p. A1.

62. Gilbert M. Gaul, Dan Morgan, and Sarah Cohen, “Crop Insurers
Piling Up Record Profits,” Washington Post, October 16, 2006, p. 1.
And see Dan Morgan and Gilbert M. Gaul, “Big Profits From Crop
Insurance Criticized,” Washington Post, May 4, 2007, p. A4.

63. Government Accountability Office, “Improper Payments: Progress
Made but Challenges Remain in Estimating and Reducing Improper
Payments,” GAO-09-628T, April 22, 2009, Appendix 1.

64. Phyllis Fong, Inspector General, U.S. Department of Agriculture,
Testimony to the House Budget Committee, July 9, 2003, pp. 17–18.

65. Government Accountability Office, “Hurricanes Katrina and Rita
Disaster Relief,” GAO-07-418T, January 29, 2007, pp. 3–4.

66. Robert O’Harrow Jr., “A $191 Million Question,” Washington Post,
August 7, 2009, p. A1
.
SEE:
http://www.downsizinggovernment.org/fraud-and-abuse