Health Care/Joan Retsinas

High-Class Robbery

Scott Fitzgerald supposedly explained to Ernest Hemingway that the rich were different from everybody else. Hemingway supposedly replied, “They’ve got more money.”

Both men were right; the two classes are inherently different, and the rich have far more money.

Look at how they commit robbery.

Poor people are robbers: they blunder into a convenience store, sometimes masked, and ask for whatever is in the till (although many customers pay with credit or debit cards). Generally a camera captures them; generally the police arrest them; generally they go from jail to court to prison, without long breaks, especially if they can’t make bail. Robbers sometimes target a house, searching for anything they can fence (though much of the fence-ables are marked beforehand, so that when the hapless robbers sell the loot, the trail leads back to them). Again, the trek from jail to court often ends in prison, with a “record” that, on release, almost propels them back into “the game.” The forces of law-and-order, from police to district attorneys to judges, win plaudits for tamping down on crime. Indeed, television is awash with righteous heroes vanquishing evil-doers. Post-release, robbers don’t end up either wealthy or esteemed.

Rich people, however, are not garden-variety robbers, but fraudsters. Their target is not a single home, or a convenience store. They aim higher: they want to defraud us, the taxpayers, but they do it so ingeniously that we are oblivious. Indeed, we may lavish praise upon the miscreants. Fraudsters live in a criminal Nirvana. Their modus operandi is deception: the savvier the fraudster, the deeper the deception. No cameras capture the malfeasance.

The clue is often a “whistleblower.” The New Yorker (“Annals of Health Care, The Whistle Blowers,” by Sheelah Kolhatkar, Feb. 4, 2019) recounts the saga of Freedom Health, a Florida insurance company that administered a Medicare Advantage plan — one of the private-sector insurers that the government lured to bring fiscal sanity and lower costs to Medicare. The rationale dovetailed with Republicans’ faith in the private sector to leapfrog over the bureaucratic inanities of a government-run program. Traditional Medicare is a fee-for-service proposal: the more services a patient uses, the more Medicare pays. Medicare Advantage plans receive a capitated amount, per enrollee; the company provides whatever services the enrollee needs. If enrollees need minimal services, the company makes a profit.

Darren Sewell, a physician at Freedom, sniffed fraud, went to the FBI, wore a tape, and went undercover for a year. Sewell filed a “qui tam” complaint, letting him sue on behalf of the government anybody thought to be defrauding the government. The motivation is not solely altruistic: whistleblowers will share in the money recovered, from 15 to 25 percent - but since whistle-blowers generally lose their jobs, and their chances of future employment in the industry, the wire may not be the happiest decision for a citizen.

The fraud is buried in the arcana of statistics. Sometimes there is no one instance of mega-fraud, but, thanks to computer’s wonders, millions of touchstrokes that add up to millions of dollars lost. Sewell felt that Freedom was gaming the system: discouraging sicker enrollees, giving agents cash incentives to get sicker enrollees to withdraw. It was “miscoding” diagnoses. It “rented” medical practices to expand, then dropped the practices once Medicare OK’d the expansion (leaving enrollees with fewer physicians than advertised).

Other Medicare Advantage plans have drawn the attention of federal auditors; e.g., UnitedHealth Group, Humana, Cigna, and Aetna.

The government does sometimes win. Seven years after Darren Sewell filed the case, Freedom paid the government $31.7 million. By that time Sewell, unemployed, insolvent, and depressed, accidentally fell. At age 39, he died.

As for the fraudsters behind the scam, they suffered no repetitional risks. Indeed, they generally continue as community philanthropists, enjoying the bounty of their fraud. The entrepreneur behind Freedom considered the fine a cost of doing business.

Today we have come to accept chicanery and deceit as part of the arsenal of a successful business: our Entrepreneur-in-Chief smiles through the special counsel investigations - all part of doing business. But robbery is still robbery. We shouldn’t laud the robbers, whether rich or poor.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.

From The Progressive Populist, March 15, 2019

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