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Posted by on Apr 1, 2008 in Guest Contributor, Health, Politics, Society | 6 comments

Guest Voice: Hillary Clinton’s Health Care Plan: One Way To Help Pay For It

Health care proposals in Campaign 2008 have often gotten drown out in bitter campaign exchanges — but what about the issue’s specifics? In this Guest Voice post, D. Cupples , co-administrator of the site Buck Naked Politics, takes a stand-back look at Senator Hillary Clinton’s health care proposal. Guest Voice posts do not necessarily reflect the opinion of The Moderate Voice or its writers.

Hillary Clinton’s Health Care Plan: One Way To Help Pay For It

By D. Cupples

The New York Times recently did an extensive interview with Hillary Clinton about her health care policy and how she would make health care affordable for us Americans. Some naysayers believe that there is little room in the budget to pay for affordable health care coverage.

There would be a lot more room in the budget, if our public servants would truly crackdown on health care contractor fraud — more about that after a bit about Sen. Clinton’s interview:

“Mrs. Clinton said she would like to cap health insurance premiums at 5 percent to 10 percentof income.

“The average cost of a family policy bought by an individual in 2006 and 2007 was $5,799, or 10 percent of the median family income of $58,526, according to America’s Health Insurance
Plans, a trade group. Some policies cost up to $9,201, or 16 percent of median income.

“The average out-of-pocket cost for workers who buy family policies through their employers is lower, $3,281, or 6 percent of median income, according to the Kaiser Family Foundation, a
health research group.

A cap on premiums has been part of Mrs. Clinton’s universal coverage proposal since she announced it in September. (NY Times)

Every tax dollar devoted to waste or fraud is one less dollar for legitimate health care services. And private contractors are necessarily involved in state and federal health care programs.

That doesn’t mean that we taxpayers must settle for overcharging, waste or fraud.

Health care contractor fraud was so rampant that Department of Justice (DoJ) finally started cracking down in the ’90s under Bill Clinton.

In 2003, the DoJ said that health care contractors’ settlements were the lion’s share of fraud-suit settlements from 2000-2003 (larger, even, than defense contractors’ settlements).

Since 2000, America’s two largest for-profit hospital chains (HCA and Tenet) have settled massive DoJ fraud suits over allegedly fraudulent conduct that had occurred for years. Contractors tend to settle fraud suits without admitting guilt, because if contractors are found guilty of fraud, the government can bar them from receiving lucrative contracts.

It’s not just the big fish who’ve been sued, and it’s not just hospitals. Below are more than a dozen examples of healthcare contractors that faced lawsuits, their alleged conduct, and the outcomes.

Note: it’s hard to know exactly how many tax dollars are going toward contractor waste or fraud, because we know only about those contractors who got caught. That and contractors may settle for less than they’d actually taken from us taxpayers.


In 2006, Tenet Healthcare (America’s second largest for-profit hospital chain) settled DoJ suits for $900 million after allegedly false billing of Medicare and other federal programs. The alleged conduct included: patient diagnoses (billing for more expensive treatment than was done or called for), unreasonable inflation of charges, and illegal kickbacks to doctors.

In 2005, Health South settled DoJ suits for $327 million after (among other things) allegedly charging for false claims for outpatient physical therapy, over-billing Medicare for hospital costs, and billing Medicare for un-allowable costs (e.g., employee travel, entertainment, and even an administrator’s meeting at Disney World).

By 2003, HCA (America’s largest hospital chain) had agreed to pay $1.7 billion to settle DoJ suits. The alleged conduct included falsifying hospital-cost reports and giving doctors illegal kickbacks for patient referrals. Some of the alleged conduct dated back to the 1980s.

Drug Companies & Pharmacies

In 2005, GlaxoSmithKline settled a DoJ suit for $140 million after allegedly submitting false claims to Medicare and other federal programs by falsely reporting inflated drug prices.

Retail pharmacies Wal-Mart (2004) Rite Aid (2004), Eckerd (2002), and Walgreen (1999) settled unrelated DoJ suits for a combined $23.4 million after allegedly charging federal healthcare programs full price for partially filled prescriptions.

In 2003, AstraZeneca settled DoJ suits for $280 million after allegedly conspiring with health care providers to charge federally funded insurance programs for free samples of a prostate cancer drug.


In 2003, Abbott Laboratories settled DoJ suits for $382 million after getting snared in a federal undercover investigation. Apparently, a division of Abbot had offered kickbacks to federal agents to buy the company’s products, then “advised them how to fraudulently bill the government for those items.”

In 2002, four individuals in Florida were sentenced to prison and ordered jointly to pay a total of $11.7 million after conspiring to defraud Medicare and Medicaid by submitting false claims for laboratory tests that were not actually performed.

In 1997, SmithKline Beecham laboratories settled a DoJ fraud suit for $325 million after allegedly over-billing federal programs by: double billing for tests for kidney dialysis patients; paying illegal kickbacks to doctors; and billing for tests that weren’t done, weren’t
medically necessary, or weren’t ordered by a doctor.

HMOs & Insurance Companies

In 2004, Lovelace Health Systems, (a Cigna-owned hospital and HMO) settled a DoJ suit for $24.5 million after allegedly falsifying Medicare cost reports for ten years. Among other tactics, the company reportedly shifted the costs of its HMO patients to Medicare.

In 2002, PacifiCare Health Systems agreed to pay $87 million
to settle allegations that it (and its predecessor companies) had
inflated insurance claims while contracted to provide
government-employee benefits under the Federal Health Benefits Program.

In 2002, General American Life settled a Medicare-fraud case for $76 million after allegedly failing to perform its contractual duties to the Centers for Medicare and Medicaid Services (CMS).  The company allegedly failed to process claims, submitted false information to CMS, failed to report errors, and disguised true error rates by deleting claims selected for CMS-review. 

Equipment Suppliers

In 2000, an Ohio medical supplier was ordered to pay $15.1 million and sentenced to 70 months in prison after pleading guilty to defrauding Medicare by billing for urinary incontinence supplies that were not provided and by falsifying paperwork to hide the schemes from Medicare.

In 1997, Olympus of America settled a DoJ suit for $22.8 million
after allegedly overcharging the Department of Veterans Affairs (VA)
for medical-imaging equipment.

Doctor Fraud

In 2004, a Connecticut pediatrician pleaded guilty to fraud and agreed to pay back $548,000 after billing Medicaid and other insurance programs from 1997-2002 for childhood vaccines that the doctor had received free-of-charge via the joint federal/state Vaccines For Children program.

In 2001, a U.S. doctor was sentenced to 10+ years’ prison after conspiring to dispense/distribute controlled substances, committing Medicare fraud, and taking illegal kickbacks.  He was also ordered to pay $229,384 in restitution. Reportedly, the doctor routinely wrote large quantities of prescriptions for highly addictive pain medication, billed Medicare for services not provided, and upcoded office visits.

In 2000, a Texas doctor and his lawyer brother were convicted and sentenced to prison after carrying out a "sophisticated scheme to defraud local, state and federal heath programs and private insurers of over $46 million from 1986 to 1998."  In the process, the doctor upcoded his services, falsified medical reports and engaged in multiple billing.