For a textbook case of journalism malpractice, we go to today's
front-page story on TennCare fraud in
The City Paper. Here's reporter Judith Tackett's lead:
TennCare abusers who sell prescription drugs they obtain through the program for illegal purposes still enjoy their state-sponsored insurance benefits. By federal law, they cannot be kicked off the rolls. It's a problem that could be costing the state up to $800 million a year.
That this occurs may be alarming, but the $800 million claim is preposterous on its face. What's the basis for such a number? Tackett writes: "The U.S. Government Accounting Office estimates that 10 percent of federal healthcare spending is fraud. Tennessee's TennCare budget is about $8 billion." So although the story doesn't say so explicitly, one assumes she applied the GAO fraud rate estimate to the TennCare budget total to arrive at $800 million.
Turning that into an assertion that reselling TennCare drugs is an $800 million cost to the state is beyond fatuous. First of all, only about a third of the $8 billion in
TennCare spending involves state money. Second, as Tackett notes in the piece, TennCare fraud involves a variety of ills beyond drug reselling, including people who underreport income, enrollees with access to other insurance, and benefit recipients who actually live out-of-state. Third, the GAO fraud rate Tackett mentions is
actually an estimate that "10 percent of national health care spending is attributable to waste, fraud, and abuse" (not just fraud), and it comes from a GAO report issued more than a decade ago.
To come up with the
City Paper's scary $800 million estimate of the impact on Tennessee taxpayers, you have to misconstrue a dated federal fraud rate estimate, misrepresent the source of TennCare funding, and make the bizarre assumption that reselling prescription drugs accounts for 100 percent of TennCare fraud.