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Jim Frogue (Center for Health Transformation)

The government must reduce inefficiencies and fraud in Medicare and Medicaid before either programs can be expanded, according to panelists at a meeting of the Republican Congressional Health Care Caucus Tuesday afternoon.

The panelists -– Jim Frogue of the Center for Health Transformation, Dennis Smith of Leavitt Partners and former CMS Medicaid director and primary care physician Christian Kryder -– agreed on the need for increased scrutiny and transparency of the government health care programs.

Frogue, who testified before a House Judiciary Committee subcommittee on the same topic last week, cited a 2009 study by Thomas Reuters that found that one-third of national health care spending is wasted. Part of this is due to fraud, he said, while the remainder is administrative waste, he said.

“It’s just so easy to steal from these programs,” Frogue said, adding that there are essentially no checks to ensure that the people are legitimately providing the services for which they submit claims.

Chris Kryder (Massachusetts Intitute of Technology)

Frogue also noted the difficulties law enforcement agencies face in combating health care fraud. The system is designed to pay now and ask questions later, and as a result, those who commit minor fraud fly under the radar, he said. The message to criminals, according to Frogue, is just don’t steal too much.

Frogue suggested making the government health care programs more like credit card companies, which vet customers beforehand.

Kryder, the former Medicaid director, called the government health care programs “deeply flawed” and cited the need to shift away from the current fee-for-service model.

According to Kryder, the problem with the fee-for-service model is that a third party is paying and the beneficiary is not involved. If beneficiaries were part of the payment equation, providers wouldn’t be able to submit fraudulent claims, as beneficiaries would be able to identify services they did not receive, he said.

Dennis Smith (Leavitt Parters)

Kryder also suggested posting all Medicare and Medicaid claims online with personal information to comply with the patient privacy regulations of the Health Insurance Portability and Accountability Act (HIPAA). This would allow claims to be “scoured” by thousands of eyes, not just by government officials if a claim or provider is actually flagged, he said.

The panel, which was moderated by caucus Chairman Rep. Michael Burgess (R-Texas), mentioned the current efforts to overhaul the health care system only during the question-and-answer portion of the panel discussion. While the panelists repeatedly cited figures in the billions of dollars of health care waste, they did not compare the cost of various health care legislation to savings that could be realized by reducing health care fraud and inefficiencies.