Beyond the estimated $100 billion annual cost, the lure of easy money has a corrosive effect on health care and society, Oz said.
WASHINGTON—Fraud is pervasive in the medical industry and undermines the integrity of the entire health care system, Dr. Mehmet Oz said on April 28.
Oz is administrator of the nation’s largest health care system, the Centers for Medicare and Medicaid Services, which spends about $1.7 trillion on medical services each year.
“The reason [fraud is] so corrosive is it corrupts the very foundation of the system,” Oz said. “It’s not just the numbers and the dollars.”
Oz detailed the problem at a forum conducted by Paragon Health Institute, a Washington-based think tank.
Fraud, plus wasteful spending and abusive billing practices, cost Medicare and Medicaid about $100 billion per year, Oz said.
Yet Oz and other speakers said the true cost of medical fraud is its impact on society.
Emboldens Criminals
During the COVID-19 era, the government suspended some checks on the federal health system to ensure that Americans didn’t lose coverage during the national emergency.
Enrollees in Medicaid and Obamacare were automatically re-enrolled each year, and new rules allowed some people to be enrolled in Obamacare plans with no out-of-pocket premiums.
Those policies became opportunities for fraud, Oz said.
“COVID taught a lot of bad people that you can steal from the federal government and you can get away with it,” Oz said.
Brian Blase, president of Paragon, reports that unscrupulous insurance brokers signed up millions of people without their knowledge, particularly in plans with no premiums.
Americas Health Insurance Plans, the trade association for health insurance companies, has disputed that claim. However, 24 states had more enrollees in Obamacare zero premium plans in 2024 than they had qualifying residents, according to data from Paragon.
Oz pointed to what appear to be fraud schemes by organized crime groups with ties to the Chinese regime operating through senior care centers in Queens, New York.
“These are actually places where you congregate people and educate them on how to scam the system,” Oz said. The scheme involves buying patients’ Medicare numbers, which are then used to send fraudulent claims to the government.
