Health Benefits Fraud

Posted by Barkimba Diallo.

In the last few months, a federal investigation has helped yield numbers of guilty pleas in South Jersey. A firefighter in Atlantic City, a Margate doctor, two local pharmaceutical representatives and six others admitted fraud of more than $25 million.  The number of convictions is expected to go up due to court documents showing that more than $50 million was paid to one compounding pharmacy. According to the article, this is a minor fraud case compare to the trial of Senator Bob Menendez where a Florida eye doctor Salomon Melgen abetted by Senate Majority Leader Harry Reid was convicted of Medicare fraud for more than $100 million in five years. Sen. Bob Menendez and Harry Reid allegedly contacted former Health and Human Services Secretary Kathleen Sebelius for advice on the trial and She replies in the negative.

Marc Pfeiffe, of the Bloustein Local Government Research Center at Rutgers University, said that “New Jersey’s $2.5 billion State Health Benefits Plan’s generosity presents opportunities for fraud.” He also added that the $25 million fraud represents just a smidge of what really goes on. Public servants involved in the crime do not fear the consequences of their actions as they are aware that the malaise is deep rooted.

Marc Pfeiffer, of the Bloustein Local Government Research Center at Rutgers University, said that fraud is the big reason why we don’t have fair competition among health providers because the choice of beneficiaries is done based on who gives the most kickbacks. He concluded that we should imbibe the best practices in the private sector if we want to root out corruption.

Barkimba is a graduate student at the Felicano School of Business, Montclair State University.

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