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Fraud contaminating free health-care pool

Gaping loopholes in the program that covers poor uninsured Bay Staters have cost taxpayers tens of millions in bogus claims from out-of-staters and foreigners —not to mention gynecological bills for men and foot X-rays for headaches, according to the commonwealth’s inspector general.

“We’re finding overpayments, double payments and medically unnecessary payments,” Massachusetts Inspector General Gregory Sullivan said of his office’s scathing review of the state’s so-called Uncompensated Care Pool obtained by the Herald. “When the state set up the free-care pool, it was supposed to have the most cutting-edge anti-fraud system to go along with it, but it’s not up and running, and because of that, many millions of dollars are being wasted.”

The fund spent $414 million on emergency health care for nearly 1 million claims in 2009, Sullivan told the Pulse, including:

• $7 million on care for non-Massachusetts residents. Even though the law limits free care to Bay State citizens, claims were paid out for patients with home addresses in 48 other states, Ireland, Canada, Germany and the United Kingdom.

• $17.8 million for more than 60,000 “medically unlikely” or “medically unnecessary” claims, such as foot X-ray charges for patients suffering from headaches.

• Suspicious claims for gender-specific procedures for members of the opposite gender.

• $6 million for 13,000 duplicate claims.

A spokeswoman for the Patrick administration acknowledged problems with the free-care pool and vowed to fix them.

“We share the inspector general’s commitment to finding ways to enhance and improve the integrity of the claims adjudication systems at the Health Safety Net,” said Paulette Song, a spokeswoman for JudyAnn Bigby, secretary of the state’s Executive Office and Health and Human Services, “and are reviewing the 2011 report thoroughly to find opportunities to help increase efficiencies.”

Perhaps the report’s most troubling finding is that the state relies on the honor system when determining who is eligible for free care — and does not review an applicant’s assets, or even require a Social Security number to verify income, citizenship or address, Sullivan said.

“It’s hard to say how much this is costing us, but we did see thousands of examples of people who are receiving free care who have Social Security numbers, but didn’t give them to the state,” Sullivan said.

The Health Safety Net’s policy is to deny coverage to out-of-staters and citizens from other countries, Song said.

The IG’s office also found that 45 percent of the free-care recipients told the state they had no income at all, although Sullivan points out that “any form of public assistance must be reported as income.” Under law, a single person who is covered by the free-care pool must have no more than $2,000 in assets and earn less than $32,586 a year.

The Uncompensated Care Pool fund, also known as the Health Safety Net, was established in 2006, under then-Gov. Mitt Romney’s health-care reform law. It is designed to reimburse hospitals and community health centers for treating uninsured people for medical emergencies — as they must under federal law — and is funded by taxpayers, health insurers and hospitals.

Earlier this year, Gov. Deval Patrick ordered government agencies to conduct a more thorough review of people’s assets before doling out any state benefits.

“The taxpayers’ interest,” said Sullivan, “must be protected.”