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Home Publications Blogs Beat the Press NYT Misrepresents Medicare Scam Story

NYT Misrepresents Medicare Scam Story

Tuesday, 29 April 2014 06:34

People reading the front page of the NYT yesterday saw the headline, "One Therapist, $4 Million in 2012 Medicare Billing." That sounds like some pretty serious fraud, since $4 million would be pretty high annual pay for a physical therapist.

Those who read all the way through the piece would find that this was money paid to a therapist who has several offices and claims to employ a total of 24 therapists. This still sounds like a lot of money ($167,000 per therapist), but certainly a very different story than was conveyed by the headline.

Medicare fraud is a really serious problem and the NYT is right to go after it. But this headline seriously misrepresented the nature of the issues in this article. There may well have been improper payments made to this therapist, but there is an enormous difference between what is implied by the headline and likely size of any improper payments, assuming that he did in fact employ 24 therapists. 

Comments (14)Add Comment
written by Last Mover, April 29, 2014 7:24

Probably just an honest freudian slip where they thought they were reporting on therapists who don't even accept Medicare because it doesn't pay enough.
Shamefully Shoddy Reporting
written by Robert Salzberg, April 29, 2014 7:35
The NYT article repeatedly refers to the number of "treatments" per patient but never bothers to explain that in out-patient physical therapy, treatments are billed in timed based chunks with 4 treatments per 1 hour session being the norm.

Then there's this:

"Furthermore, Mr. Bakry, who says he now operates three offices in different locations in Queens, "

If you're the paper of record hinting at massive fraud or at least aggressive heavy utilization for several local business locations, doesn't that warrant a visit to the clinics to see if the businesses are legit or even exist? Doesn't a front page story in the NYT qualify for minimal fact checking?
billing/not take home
written by medgeek, April 29, 2014 8:28
Dean, there certainly may be a problem here. We should nonetheless all remember that this is the billing, not salary or take home net of expenses. My guesstimate is that the salaries are on the order of half the figures mentioned. If so, the therapists are doing well, but this is not a slam-dunk case of fraud.
written by bananaguard, April 29, 2014 8:32
What medgeek said. Gotta pay rent, benefits, utilities and all that other businessy stuff out of that $167,000.
written by skeptonomist, April 29, 2014 8:41
Scams, even valid ones, are not a legitimate objection to having single-payer or other public systems, since other countries manage to keep costs at around half of US total costs. How is the scam situation in Canada? Having most of the health-care system still under private control means that providers still have a great deal of leverage, not only to set payments high but to keep regulatory oversight low.
No more dishonest that reporting corporate profits
written by Bill H, April 29, 2014 8:58
Media routinely says that a big oil company, fo instance, had "record profits of $9 billion," not mentioning that they also had record sales and that their profits amounted to only 9% of sales. Nor do they compare that to Pharma profits of 50% on sales, or Microsoft at 85% of sales. Their goal is to be critical of the big oil company, and so they cite the profit in raw dollars with no context. Media is an inherently dishonest business.
written by JDM, April 29, 2014 10:17
I thought the NYT was on record as repeatedly implying that salaries on the order of $250 grand (or even more) were very hard to live on in NYC. Why then do they think otherwise for these people?

Of course the "one therapist" line is completely dishonest since they knew it was "one company". Or is this acceptance of the Galtian claim that business owners somehow provide all the money their employees get without the employees doing any part of the money earning.
Medicare fraud
written by Ethan, April 29, 2014 11:11
When I started practicing law in the mid '60's, one of the firm's clients was a Blue plan with a contract to administer Medicare payments. The first case on which I worked was an allegation that the client had failed to detect that a hospital physicians group was cheating Medicare by billing for services performed by residents who were not working under the eye of a "supervising, attending physician in a teaching setting", or who were performing diagnostic procedures just for the experience when they were not "medically necessary". The more things change ...
I'm not saying this involves fraud
written by Dean, April 29, 2014 11:53

to be clear, I don't consider myself enough of an expert of either the pay structure for physical therapists or what exactly is involved in terms of overhead costs. I was just doing the arithmetic and saying the number sounded high. But even if it is above what would be charged by others in NYC, that doesn't necessarily make it fraud.

In short, there could be something here in the way of improper payments, I really don't know. But clearly the story is very different than what is implied by the headline.
written by JDM, April 29, 2014 12:11
That seems to be your basic complaint about stories involving finance: you get to the end and you just don't know if they've described an actual problem. And this despite the fact that the NYT at least has promised to provide context, at least in budget reporting. In this case, important context is missing, so you get to the end of the story and you have no idea if what they clearly imply is likely to be true or not.

And of course the fact that in this case their headline is a lie and that this is shown in the story it heads does not inspire confidence about the story itself being an attempt at accurate reporting. This is a really big problem for news media (a problem entirely of their own making), the more so because they don't seem to be aware that it's a problem at all.

As Atrios would snark, time for another blogger ethics panel.
written by PeonInChief, April 29, 2014 12:51
Physical therapists (most of whom now have PhDs) start at about $70K a year, so $167K a year per therapist might not be that outrageous if you consider overhead. The biggest fraud is the medical device industry--wheelchairs, scooters and even things like knee supports. Medicare sends patients a billing summary, so that patients can catch the suppliers using their SS numbers to charge for devices that the patient never wanted, never ordered, and never saw.
This is only medicare billing
written by KeithOK, April 29, 2014 3:35
The comments about overhead an other expenses are valid. It's also true that these are only Medicare billings. We don't know if these practices cater mainly to the elderly or if the non-Medicare billings are also significant. Total billings could be twice the $167,000 per therapist. We really don't know enough to say much of anything about the reasonableness of the billing.
Has said therapist .....
written by John Puma, April 30, 2014 12:06
stolen enough from Medicare to be elected governor of a state with over ten per cent of the electoral votes needed for victory in a presidential election?
Hi Dean,
written by medgeek, April 30, 2014 8:21
Thanks for the response. We're in agreement--there may or may not have been fraud in this instance, but the case for fraud in the article is weak or nonexistent. It's more an attempt at "gotcha, here are some big numbers; isn't that terrible."

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.