Thursday, March 01, 2012

Medicare Fraud

This $375 million scam should be more surprising than it is.  In the typical market, the customer doesn't get overcharged the first time because he knows the price of the transaction before he enters into it.  If he gets overcharged once, it doesn't happen a second time, because he pays the cost of the service and can go elsewhere for a cheaper price.  As the article linked above indicates, Medicare is left to "pay and chase."  What a shame -- some of Medicare's most effective auditors are the customers themselves.  A reasonable co-payment might have prevented this scam from getting so large, as the customers would have refused to go along with it or the more conspicuous bribe that would have been required.

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