The Impact of Costs Associated with Medicare Fraud on Quality and

Outcome of Health Care for the Elderly
The Impact of Costs Associated with Medicare Fraud on Quality and
Outcome of Health Care for the Elderly
Medicare fraud has become a controversial issue affecting the state and
federal governments of the United States. Parente, Schulte, Jost,
Sullivan & Klindworth (2012) identified that fraudulent activities
within the U.S. healthcare system accounts for between 3 % and 10 % or
($ 75 to $ 250) of the total annual health care expenditure. The
researcher defined Medicare fraud as the act of making a false
representation to obtain health benefits for which the entitlement does
not exist. Although there are several other factors contributing to the
increase in the cost of health care (such as application of better
technology in health care facilities), Medicare fraud is of major
concern to all the stakeholders. This is because the increase in the
cost of health that result from Medicare fraud has no positive gain to
the state, unlike electronic advancement, which improves the quality and
efficiency of health care service delivery.
Statement of the problem
Cases of Medicare fraud have been increasing tremendously in spite of
the legal provisions put in place to curtail the crime. According to
Hyman (2002) the available legal provisions, which include the legal
framework that resulted in formation of Medicaid and Medicare prohibited
the use of false statements to acquire health care. However, the
measures have proven to be ineffective since the cost of health and the
overall government expenditure on health have been escalating as a
result of an increase in incidents of Medicare fraud. This a critical
issue that mainly affects the poor and elderly Americans because the
decline in the quality of health care services affects their health
outcome and quality of life (Kijong & Antonopoulos, 2011). WHO (2006)
defined quality health care as effective, accessible, efficient,
patient-centered, equitable, and safe health care service. Several
researchers have studied Medicare fraud with a focus on failed legal
framework Sheehan & Goldner (2006) and causes of the fraud Fisher
(2008). However, the effect of Medicare fraud on the quality of health
care for the elderly Americans is rarely addressed. The proposed study
will fill this gap by studying the impact of Medicare fraud on quality
of health care and health outcome among the elderly Americans.
Literature review
Medicare programs and quality of health care for the elderly
Research has shown that the elderly population that has enrolled for the
Medicaid health program constitutes 25 %, but account for over 70 % of
the program’s health care expenditure (Swartz, 2009). This implies
that Medicaid is the largest source of financial support for long-term
heal care of the elderly Americans. In addition, the study revealed that
the enrolled elderly people have financially poor background or
uninsured by other health programs available in the market. This would
create a disparity in health outcome in this population in the absence
of Medicaid. Public health programs available in the United States
(including Medicaid) have been evolving with time and their capacity has
been enhanced to improve the quality of life and life expectancy of the
elderly and the poor members of the society (Swartz, 2009).
Potential reasons for the Medicare fraud
Health sector in the United States has undergone significant evolution
especially in the last few decades. Although changes in the health
sector were meant for the betterment of quality of health, Fisher (2008)
identified three major factors that have increased the chances for
health care fraud in the United States. First, the complexity of
medicine, which has resulted from the appropriation of technological
techniques and complex health policy, has increased susceptibility of
health of the healthcare industry to fraud. Secondly, the researcher
identified that the ambiguity of payment methods has increased with
time. Third, the researcher identified that there is limited knowledge
about fraudulent activities within the health care sector. The United
States initiated the fight against Medicare fraud about fifteen years
ago. This means that experts have little knowledge of health care fraud
as a science. These findings were consistent with the result of research
conducted by Parente et al, (2012) who concluded that the fraud
detection methods used earlier could not help in the determination of
how much of the fraud was prevented.
Effect of Medicare fraud on quality of health for the elderly
The decline in quality of health care services as a result of health
care fraud is a widely debated issue by the stakeholders in health
sectors in the United States. Research has shown that Medicare fraud
affects both the health outcome disparity and quality of health care
services (Sheehan & Goldner, 2006). However, these factors are
intertwined with the increase in the cost of providing health care
services by the government. This is because the government is forced to
spend more money to finance health services for which benefits are not
entitled. This reduced the amount of funds available for provision of
quality health care services and purchase of health care equipments. In
addition, the researcher identified that the false claims in different
psychiatric health facilities and nursing homes have increased the
provision of substandard health care services. The poor elderly are the
most affected by the decline in quality of health care services since
they have no alternative for quality health care services.
Fisher, E. (2008). The impact of health care fraud on the United States
health care system. SPEA Honors Paper Series, 2 (4), 2-29.
Hyman, A. (2002). HIPAA and health care fraud: An empirical perspective.
Cato Journal, 22 (1), 151-175.
Kijong, K. & Antonopoulos, R. (2011). Unpaid and paid care: The effects
of child care and elder care on the standard of living. Levy Economics,
691, 1-18.
Parente, S., Schulte, B., Jost, A., Sullivan, T. & Klindworth, A.
(2012). Assessment of predictive modeling for identifying fraud within
the Medicare program. Health Management, Policy and Innovation, 1 (2),
Sheehan, G. & Goldner, A. (2006). Beyond the anti-Kickback statutes: New
entities, new theories in health care fraud prosecution. Journal of
Health Law, 40 (2), 1-26.
Swartz, K. (2009). Health care for the poor: For whom, what care, and
whose responsibility? Focus, 26 (2), 69-74.
WHO (2006). Quality of care: A process for making strategic choices in
health systems. WHO: Geneva. Retrieved September 26, 2013, from

Close Menu