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“60 Minutes”‘ $60 Billion Lie About Medicare

| November 5, 2009

I haven’t watched CBS’ “60 Minutes” in years. But it was one of those stories that stops you in your tracks: Medicare fraud is “a $60 billion crime.” Medicare is the $456 billion government health insurance program serving 46 million elderly Americans. Its credibility as a government-run program is at the heart of the health-care reform debate. If Medicare isn’t doing the job, the government certainly can’t.

Except that the fraud claim is not true. The more evident fraud is “60 Minutes”’ amateurish journalism that wouldn’t get past your average small-town copy editor’s fact-checking.

The first thing I did after watching the show was get in a big funk: Maybe conservatives are right. Government can’t run anything. And this is “60 Minutes,” not some tabloid sap like “Dateline” or NBC’s more explicit garbage like its “Predator” miniseries. Plus I have special affection for CBS, which literally put me through college. My father was an assignment editor at the station, and back in the day I used to loiter on Walter Cronkite’s chair and pretend to be writing the evening newscast on typewriters (it was typewriters back then) when no one was looking. CBS ruled.

Cut to the sham. The second thing I did was apply the first lesson of the trade: verify the facts. It didn’t take long for the story to unravel. There are no facts. “60 Minutes” doesn’t know how much Medicare fraud there is. You don’t know. I don’t know. The federal government doesn’t know. Nobody knows, because Medicare fraud as a whole isn’t tracked. That’s why Kroft said fraud is “estimated now to total about $60 billion a year.” Estimated. Fine. By whom? You’d think Ed Murrow’s ghost at the Columbia Broadcasting System might still compel his descendants to attribute colossal estimates to a reliable source.

Not this time.

I called “60 Minutes.” I asked to speak to one of the two producers of the segment. I was patched through to a spokesman instead, who said the $60 billion figure came from Kirk Ogrosky, a Justice Department prosecutor in charge of Medicare fraud. But it didn’t. Nowhere in the “60 Minutes” broadcast or its written report does Ogrosky mention the figure. Nor is the figure attributed to him or Attorney General Eric Holder, who makes a cameo on the show. The spokesman’s best explanation: Ogrosky was cited in the piece, “60 Minutes” got the figure from him, and the Justice Department didn’t call the next day to dispute the figure (as if the Obama administration were going to start a credibility war with yet another network). I was welcome, the spokesman said, to check with Ogrosky’s office at Justice.

I did, asking if Ogrosky or anyone at the department had given “60 Minutes” that $60 billion figure, and if it stood by it. After cutting through the initial bureaucratic hurdle, Charles Miller, one of the Department of Justice’s spokesman, wrote me: “This sounds like a good question for HHS,” meaning the federal Department of Health and Human Services. I let Charles know the buck-passing was getting old. He tracked down Ian McCaleb, the spokesman for the department’s criminal division, who worked with “60 Minutes” on the segment. McCaleb’s answer: “The estimate range in the Attorney General’s Q and A was $27 to $90 billion, but that is using National Healthcare Anti-Fraud Association and General Accounting Office estimates on total federal expenditures.”

McCaleb and the attorney general were wrong, too. GAO has never estimated total Medicare fraud. It investigates targeted programs within Medicare, finding fraud in the millions, not billions. And it’s not total federal expenditure that those estimates McCaleb referred to are based on. It’s total public and private expenditure on health care. The National Health Care Anti-Fraud Association, a partnership between private insurers and the federal government, says that it “estimates conservatively that 3 percent of all health care spending — or $68 billion — is lost to health care fraud.” The association bases that figure on 2007 total health care spending of $2.27 trillion in the United States. It’s an unscientific, very dubious way of making estimates. But even if you go with it, well over half that spending is private sector. Medicare in 2007 was a $436 billion program. Applying the association’s 3 percent standard, that works out to an estimated $13 billion in Medicare fraud. For argument’s sake, throw in Medicaid’s $191 billion spending in 2007. You’re up to $19 billion in fraud.

Nowhere near the “60 Minutes” claim, which went as far as saying that when Medicaid was included, fraud adds up to $90 billion. Steve Kroft and his producers never bothered to trace their facts to the source and certainly never did so for viewers, relying instead on the slob-journalist’s cheapest cop-out: attribution by estimates. Nor did they make the equally important point: Insurance fraud isn’t unique to Medicare or government-run programs. If anything, it affects the private sector more. That’s without mentioning a different kind of fraud private-sector insurers excel in—the routine turning down of claims in hopes that claimants don’t pursue them. Imagine what profits insurers reap from that swindle if just 3 percent of claimants didn’t follow through. “60 Minutes” was mum on that, too.

Shame on “60 Minutes” and the Justice Department for throwing around wild numbers, although the $27 to $60 billion range should be a hint to anyone who hears it that something is amiss. “60 Minutes” isn’t the only fiction peddler. You can see those same wild, patently false “estimates” quoted alongside claims of Medicare fraud in National Public Radio reports, in the Wall Street Journal, in the Washington Post and the rest of the mainstream herd. And those are the numbers — the fictions — shaping public opinion across the country and public policy in Washington.

Medicare fraud is a serious problem. But singling it out and exaggerating it beyond credibility won’t fix it, although it may help doom any government expansion of health care. In that regard, the “60 Minutes” segment did its death-panel best.

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