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Medicare, Medicaid breed cronyism and fraud

Another day, another massive fraud scheme where private companies scam unaccountable public health programs and profit off of taxpayer dollars. This time the culprit is Walgreens:

NEW YORK — Walgreens Boots Alliance Inc will pay $269.2 million to settle two whistleblower lawsuits accusing it of civil fraud for overbilling federal healthcare programs over a decade, the U.S. Department of Justice said on Tuesday.

The pharmacy chain will pay $209.2 million to resolve claims it improperly billed Medicare, Medicaid and other federal programs from 2006 to 2017 for hundreds of thousands of insulin pens it dispensed to patients it knew did not need them.

Walgreens will also pay $60 million to resolve claims it overcharged Medicaid from 2008 to 2017 by failing to disclose and charge the discount drug prices it offered the public through its Prescription Savings Club program.

The Deerfield, Illinois-based company said it “admits, acknowledges, and accepts responsibility” for conduct alleged by the federal government, according to the settlement agreements.

If you don’t keep up with the current events of public health programs, all you need to do is to put in an internet search bar “Medicare fraud” or “Medicaid fraud” in order to see how often this phenomenon happens.  

Yet, for the past 50+ years after these programs were implemented under the Johnson administration, our federal government increased the amount of funding for each of the programs. Under the Obamacare, states were encouraged to expand Medicaid and the accept more money from the federal government.

Why would a system, that is so obviously flawed, continue to be authorized? Couldn’t lawmakers find a better way to use our tax dollars to ensure our citizens have the assistance and access to healthcare they need? Why is it that these programs remain structurally untouched and their budgets are increased year after year?

The main reason is political pressure. Why would any politician want to mess with a system that so many people rely on, both providers and patients, when it would be so much easier to leave alone and continue to flounder? Any time any change is considered, lobbyist flood the halls of Capitol Hill to ensure their designated taxpayer dollars are not changed.

Politicians are all too ready to cozy up to the industry lobbyists and providers who benefit from this process. You may remember, this is the reason why Senator Bob Menendez was the subject of a bribery accusation surrounding his buddy, Dr. Melgen. Dr. Melgen was the number three biller among individual providers in 2013 where he received $14.4 million from Medicare. When Dr. Melgen was under investigation for overbilling, Sen. Menendez made sure that he still received payments from the government in exchange for campaign contributions and expensive vacations.

The phenomenon will continue as long as the federal government continues to be so heavily involved in healthcare spending and so reluctant to challenge the industry. That is one of the main reasons North Carolina lawmakers should reject Medicaid Expansion and implement other ways to bring down the cost of healthcare in NC for everyone while still helping the most in need populations. Expanding Medicaid will simply further entrench this unsustainable system while simultaneously creating more opportunities for taxpayer dollars to be fraudulently obtained by bad actors.

Jordan Roberts / Health Policy Analyst

Jordan joined the Locke Foundation in the summer of 2018 as Health Care Policy Analyst. He analyzes state and national health policy issues with an eye toward removing governm...

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