CORPORATE CRIME REPORTER

Lewis Morris v. Malcolm Sparrow – How Much Health Care Fraud?
24 Corporate Crime Reporter 1(10), January 7, 2010

Some experts say health care fraud hovers around three percent of all health care expenditures.

Three percent of $2 trillion: $60 billion.

But Malcolm Sparrow says the number is probably much higher.

Sparrow is a professor of public management at Harvard’s John F. Kennedy School.

He believes the number could be as high as 20 percent.

Or even 30 percent.

That would be more like $400 billion.

Or $600 billion.

Sparrow says the government knows how to measure health care fraud.

But it refuses to do it.

Why?

“The news would be too bad,” Sparrow says.

Lewis Morris is the chief counsel at the Office of Inspector General at the Department of Health and Human Services.

Morris is at the center of the fight against health care fraud.

Does the government know how to measure health care fraud?

“Not that I’m aware of,” Morris told Corporate Crime Reporter in an interview last month. “If you could steer me toward someone who knows, I would be tickled pink. But to my knowledge, the government does not have a valid way of measuring the true, precise level of health care fraud.”

Morris says the problem is proving the fraud.

“It is a big jump to move from a billing error to a fraud,” Morris said. “Fraud is an intent based act. In order to establish it, you need someone to admit it, or you need sufficient evidence to prove it. And you would need to build that circumstantial evidence in each one of the cases that you counted toward your fraud statistic. It may be doable, but with the resources we have now, I would rather go after the bad guys that are in our scopes right now rather than trying to perfect the percentage point of fraud.”

During the interview, Morris repeated that there was no “conspiracy” to hide the bad news.

But Professor Sparrow didn’t allege that the government was engaged in a conspiracy.

“If the thought is we know how to measure it and we have affirmatively decided not to, and therefore have asked civil servants like myself to be part of a cover-up so we keep the bad news from the public – that smacks of conspiracy to me,” Morris said.

“Certainly, those of us in the fraud fighting business would love to have more resources to do our job better,” Morris said. “So, we have every incentive to bring the scope of this problem and the nature of this problem to the attention of policy makers. And we are doing that.”

[For the complete q/a transcript of the Interview with Lewis Morris, see 24 Corporate Crime Reporter 1(11), January 4, 2010, print edition only.]

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