A Hero Returns to the Fray - by The Boston Globe

A hero returns to the fray
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The Boston Globe / Editorial
September 1, 2011

 
[ GORBACHEV VS. PUTIN ]

YOU DON’T have to be a recipient of the Nobel Peace Prize to publicly condemn Russian Prime Minister Vladimir Putin for undermining democracy and dragging Russia backward, but it helps. And you don’t have to be the last head of state of the USSR to point out that Putin’s United Russia Party is reminiscent of the old Soviet Communist Party, but that helps too.

It is an irony of history that Mikhail Gorbachev, the former leader of the totalitarian Soviet Union, is now one of the most eminent critics of authoritarian rule in contemporary Russia. Twenty years ago this summer, Communist hardliners outraged by Gorbachev’s reforms attempted to remove him from power, take control of the Kremlin, and shut down the independent media. But the coup collapsed within days, and by the end of the year the Soviet Union no longer existed.

There were hopes that democracy and freedom would take root in Russia, but the rise of Putin, a former KGB colonel, has dashed them. Under Putin, who was elected president and then evaded term limits by continuing to dominate the government as prime minister, democratic liberties have been suppressed - and so have critics of his regime. The direct election of local governors and members of parliament has been abolished. Opposition parties have been marginalized. Political opponents have been jailed, aggressive journalists have been murdered, and academic freedom has been stifled. Media outlets have been taken over by Kremlin loyalists, and nongovernmental organizations have been severely restricted.

In this ominous environment, Gorbachev’s re-emergence as advocate of political openness and democratic change is deeply welcome.

“Honest elections are needed: single-ballot elections, elections of governors,’’ Gorbachev told interviewers last month. “People must have a feeling that something depends on them.’’ The one-time father of glasnost and perestroika accuses Putin of “dragging the country into the past,’’ and of resembling Stalin in his drive to consolidate power.

Gorbachev is 80 now, and could choose to spend his remaining years in comfort and quiet. That he chooses instead to speak out in support of Russia’s beleaguered reformers attests to his moral authority - authority he first acquired a generation ago, when his determination to end totalitarian rule made “Gorby’’ a hero and changed the course of history.
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© Copyright 2011 Globe Newspaper Company.

Thieves and Crooks Everywhere ! ! - by TPO

A government cash machine for crooks
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article by MALCOLM SPARROW
Los Angeles Times
August 28,2011

Last week, a Los Angeles jury convicted a local pastor and his wife of fraudulently claiming $14.2 million from Medicare.

The culprits recruited parishioners to help run fake durable medical equipment companies, and spent the proceeds on expensive cars and other luxuries.

Assistant U.S. Attorney General Lanny A. Breuer said "they treated the Medicare program like a personal till."

Around the country, a never-ending stream of Medicare and Medicaid rip-off stories suggest many people now use these programs as personal tills. In July 2010, authorities exposed and shut down a more organized scheme, charging 94 conspirators from five cities who had stolen $251 million from Medicare.

Three months later, 52 members of an Armenian American organized-crime ring were arrested and charged with $163 million in fraudulent billing.

Scores of reports over the last decade catalog completely implausible Medicare and Medicaid claims paid, apparently without a hiccup, for patients who were dead, imprisoned or deported. A significant number of claims involved prescribing physicians who were long-since dead.

What makes these health care programs so vulnerable to fake billings? It's not the program design. The vulnerability stems from the payment mechanism the government has chosen.

Most Medicare and Medicaid funds are paid out electronically and automatically, in response to electronic claims received from a vast spectrum of providers. Most claims are adjudicated by computers using rule-based systems, with no human intervention at all.

Fraud perpetrators have only to learn the rules; then they can submit thousands of claims electronically and with relative impunity. If they get things wrong, they'll receive helpful computer-generated messages explaining their mistake.

Scammers find it easy to get paid for fabricated claims because the government's systems check for billing correctness but not for truthfulness. The simple rule for getting rich quick through health care fraud is "bill your lies correctly."

In 1995, as electronic claims processing was becoming more widespread, one seasoned Medicaid fraud investigator warned: "Thieves get to steal megabucks at the speed of light, and we get to chase after them in a horse and buggy. No rational businessman would ever invent a system like this."

Nevertheless, the government continues to find such systems attractive, mostly because the processing efficiencies are obvious and tangible.

This problem is not restricted to health care. Federal and state agencies increasingly disburse funds through such "electronic signal in, electronic payment out" (ESI-EPO for short) systems.

The economic stimulus package, for example, included 56 tax provisions worth $288 billion. Ten have already been designated high-risk because of electronic processing.

Submit a qualifying tax return electronically, and if it has been completed correctly, out will come an electronic payment with little or no validation of the supporting evidence.

Payments for the stimulus fund's first-time homebuyer credit were found to have included $9 million to 1,300 prisoners, many serving life sentences when they purportedly bought homes.

More than 10,000 taxpayers received credits for homes also claimed by other taxpayers. One home was claimed 67 times.

The recipe for disaster is now clear. Whatever the nature of the payments -- welfare supports, reimbursements, health claims, tax credits, incentive payments or subsidies -- pay them electronically.

Set up the system with honest claimants in mind. Allow claims to be submitted electronically. Set the administrative budget low enough that the bulk of the claims have to be paid without verification.

To make things really dangerous, add a degree of urgency to the public purpose (as with the stimulus package).

Urgency tends to trump caution and raises policymakers' perception of the "business-acceptable risk." And if it's a really "valuable" program, supporters and officials will be loath to hear any criticism of it, and to discount reports of fraud.

It is no longer sensible to disburse public funds, on trust, through electronic systems. The commensurate risks are enormous and seriously underestimated. Organized-crime groups, prisoners and a host of other criminal entrepreneurs troll government websites looking for programs with these vulnerabilities.

Such systems must now either be fortified with substantial resources for routine validation or, preferably, be phased out altogether through structural reforms.

Fixing these vulnerabilities offers substantial promise for long-term deficit reduction, in a form that both political parties could support. But one important political obstacle remains: finding the courage to admit how serious and pervasive this problem has become.

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Prof. Malcolm K. Sparrow of Harvard's Kennedy School of Government is the author of "License to Steal: How Fraud Bleeds America's Health Care System." He wrote this article for the Los Angeles Times.