White House Medicare Accounting Tricks

From this week’s Barron’s, comes the latest bit of fiscal dishonesty from the White House: 

"THIS SPACE DOESN’T USUALLY INDULGE in advice to the ailing. But we feel compelled by a revelation that came to light last week to do so, even though we lack even the most rudimentary medical training. (If it helps our credibility any here, we might note we’re a faithful reader of the New England Journal of Medicine; the pictures aren’t much, but some of the text — at least that part of it we can understand; we can’t speak for the rest — is unfailingly informative.)

Enough of disclaimers. Let’s get to the heart of the matter. Our advice is simple: Don’t get sick in the last nine of the days of Uncle Sam’s fiscal year; and if you’re already sick, for gosh sakes, don’t get sicker. Especially if you happen to be a geezer, or have the bad luck to be disabled.

This exhortation is not based on any new medical research or even quack notion, and it has absolutely nothing to do with any seasonal blips in the incidence of disease. Instead — and here’s the beauty of it — it springs from cold, hard logic, derived from last week’s disclosure of some smarmy accounting sleight of hand that the Bush administration plans to indulge in so as to make Medicare’s deficit look better this waning fiscal year. Just the kind of manipulation, incidentally, that under Sarbanes-Oxley can land a slippery CEO or chief financial officer in the pokey.

The bureaucratic brainstorm was straightforward — simple-minded is, perhaps, a more appropriate description — don’t pay doctors, hospitals and their army of auxiliaries tending to indisposed old folks and the afflicted disabled for their labors in the last nine days of the current fiscal year. Instead, send them a check for what you owe them, sometime after the first of October, the start of the government’s fiscal ’07. In essence, those doctors, hospitals et al. are making an involuntary loan of nine days’ pay without interest.

That way, point out the gleeful budgeteers and Medicare pooh-bahs, all of whom presumably are glowing with health, Uncle Sam’s Medicare tab this fading fiscal year will be $5.2 billion less than it otherwise would have been. Or at least would seem to be $5.2 billion less — in Washington, as we all know, appearance and reality are not invariably the same phenomena.

Of course, this oh-so-clever stratagem would mean that next fiscal year’s Medicare bill will be $5.2 billion more than it would have been. But, not to worry, those indefatigable financial watchdogs in the Office of Management and Budget and their henchmen in the uppermost reaches of Medicare are on the case. And we have every confidence that next year they’ll make up for any untoward increases in costs by ceasing to send checks to doctors, hospitals et al. in August or even July, if necessary.

It’s never too early for the prudent sickie to begin to prepare for the worst and do everything in his or her power not to allow his or her condition to grow worse toward the end of the fiscal year. Get used to waiting until the start of the new fiscal year before letting it all hang out.

For it ineluctably follows that the doctors and their cohorts might feel some inhibiting hesitation about putting in an often onerous day’s work for the promise of payment later. In the circumstances, who can blame them if they decide en masse to shut down their offices for the summer? And wasn’t it the president, himself, after all, on an earlier occasion, who pointed out that government IOUs are just pieces of paper?

We have a modest counterproposal: Why not hold up the paychecks of the people in the upper echelons of the Medicare bureaucracy and at the Office of Management and Budget until the $5.2 billion target is reached? It might take more than a year or two. But, hey, they’re dedicated public servants, so we’re sure they wouldn’t mind lending the government money for such a good cause. And, no matter how long it took, they’d be paid in full — but fair’s fair, without interest."

This sort of nonsense is beyond disappointing — it is astounding . . .


The Medicare Scam
Barron’s MONDAY, AUGUST 28, 2006   

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What's been said:

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  1. msc commented on Aug 28

    State ‘s do this all the time
    ever notice how your tax refunds are mailed in the next fiscal year ???

  2. Leisa commented on Aug 28

    If this deferral is perpetuated in the next fiscal year, then the budgetary effect is the delta between the current year deferral v. next year’s deferral, not the full tilt of the deferral as suggested in the column.

    But God created accrual accounting v. cash basis to do away with such vagaries. It’s a shame our government still operates on a cash basis.

  3. lola commented on Aug 28

    Can’t wait for Michael Moore’s “Sicko”.

  4. XON commented on Aug 28

    If I’m not mistaken, the gov’t has been doing this (making deferred salary payments) to their employees for years already. This actually diminishes even the minimal ‘ingenuity’ demonstrated by the genius who came up with this idea.

  5. anon95953 commented on Aug 28

    Dear Big Picture:

    I’m torn between being disgusted at the govt accounting trick, and my glee at overpaid hospitals and docs being delayed their share of corporate welfare.

    Please help me resolve my dilemma.

  6. j d ess commented on Aug 28

    wow. 9 days of medicare is $5,200,000,000 or about $577,750,000 ($2.4m/hour). this before the bulk of boomers hit the rolls…

  7. fatbear commented on Aug 28

    j d ess –

    off a little – it’s $24m/hr – or $400k/min or ~$7k/sec

  8. j d ess commented on Aug 28

    ha…a rounding error on my part (i’m sure the admin would approve).

  9. Political Animal commented on Aug 29

    Too Clever by Half

    TOO CLEVER BY HALF….Guess what? The end of the federal government’s fiscal year

  10. Political Animal commented on Aug 29

    Too Clever by Half

    TOO CLEVER BY HALF….Guess what? The end of the federal government’s fiscal year

  11. Political Animal commented on Aug 29

    Too Clever by Half

    TOO CLEVER BY HALF….Guess what? The end of the federal government’s fiscal year

  12. Political Animal commented on Aug 30

    Too Clever by Half

    TOO CLEVER BY HALF….Guess what? The end of the federal government’s fiscal year

  13. cfr commented on Sep 6

    Heck, they just learned this from the insurance industry…..and it’s easier to just deny Medicare claims, at the end of the fiscal year, so providers have to resubmit.

  14. SpinMD commented on Sep 15

    Corporate welfare? Exactly what is your definition or are you to wired up to right wing talk radio to give shit? I spend many hours each week seeing and treating Medicare patients and I should not be reimbursed? Maybe you should suspend posting until you return to reality.

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