With the state facing a potential $1 billion-plus budget deficit and money getting tighter every day, one might think that collecting an extra $11 million from health care providers who defraud the Medicaid program wouldn't be terribly controversial. But Gov. Martin O'Malley's proposal to do just that has met surprising resistance in Annapolis this year.
The Senate has a chance to set matters straight this morning, however, by approving the governor's proposal to allow the state to collect up to triple damages in Medicaid fraud cases. The federal government already has such authority - as do at least 22 other states - but the measure is opposed by drug companies and some misguided souls in the medical community who argue it will increase health care costs.
In this, opponents are 100 percent wrong. Studies have suggested that 10 percent of the nation's health care dollars end up paying for waste, fraud and abuse. Any effort to discourage such behavior ought to be applauded by the health care community, not feared.
The Maryland False Health Claims Act is a response to the grim reality that the federal government has a roughly 10-year backlog of Medicaid and Medicare fraud cases. The Maryland attorney general's office is an active prosecutor in this arena, but the state lacks the authority to penalize perpetrators beyond the amount stolen.
Annually, the state collects more than $20 million from such fraud, but states that have the authority to seek triple damages do much better. When Tennessee changed its law, collections went from $3.5 million to $19.7 million. In Texas, the amount rose from $25.3 million to $136.6 million. The federal government actively encourages such efforts - states that adopt these measures are given a bigger share of the state-federal split of any false claim.
Remember, these scofflaws aren't physicians who made some innocent clerical error but people who have deliberately bilked the government. By failing to impose a penalty, Maryland essentially gives interest-free loans to frauds. The fact that the perpetrators include large and politically connected drug companies such as Merck (which recently agreed to pay a $670 million government claim) ought not discourage the effort.