Meet Medicare Fraud's Whistleblower

(CBS)  Robert McCaslin is a man of few words … but many scruples.

"Just the way I'm wired, I guess," he said. "It's just that simple."

Which is why he lost sleep over major taxpayer fraud he unearthed while working in billing at the Houston Hospital District, CBS News investigative correspondent Sharyl Attkisson reports.

"It's an attack on the whole system," he said. "Everybody that pays taxes it involved in this."

McCaslin caught the hospital billing Medicare for accident victims, even if the patient had private insurance that was supposed to pay. The hospital also billed Medicare for prisoners, even though by law, they're not covered.

When McCaslin alerted his bosses, he was surprised to discover they were in on it.

"In one of the meetings with the manager, they said 'that's just the way they did it here.' That was their procedure," he said.

It's not just a problem in Houston. Across the nation, hospitals are sending Medicare improper and fraudulent charges. It's costing taxpayers big time: nearly $11 billion a year.

The government started a pilot program and sent private auditors to comb through hospital bills in three states (California, Florida and New York), looking for Medicare rip-offs.

In one year, they were able to make hospitals pay back an astounding $247.4 million. That's in just three states.

The audits are supposed to expand to all 50 states in March.

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Read more on Medicare fraud on Couric & Co. blog.

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"Imagine what will happen when it rolls out nationally. The amount of money that can be saved," said Leslie Paige of Citizens Against Government Waste. "And unlike a lot of things, this money goes back into the health care trust fund, which lengthens its life and shores it up."

Without serious help, the trust fund that pays Medicare hospital bills will go belly up in 2019. But not surprisingly, the hospital lobby is trying to put on the brakes on the audits, saying while they support the idea, the program is flawed and unfair.

Meantime, people like Robert McCaslin will be out there fighting one hospital at a time.

He helped the Justice Department build a fraud case that ended with the Houston Hospital District giving taxpayers a giant refund.

"The hospital paid back approximately $15 million," he said. "I got $3 million."

That's right ... McCaslin got a windfall he never expected. Under federal law, whistleblowers can get a piece of the settlement. Now he has the money to drive a nice new car. And in his typically understated fashion, he told us how he planned to make up to his wife for all the sleepless nights.

"We're going to Paris for Valentine's, uh, weekend," he said. "And that will be nice."

A win-win situation for taxpayers - and the man who didn't say much, but did the right thing.

[bookwerm314]

Treat all hospitals as Utilities, end Insurance companies, ALL back offices on both the medical and insurance sides of things, remove ALL profit from Medical, negotiate EU level pricing (1/3rd of what we pay in the US!) for all meds, change the laws so big Pharm can''t keep stealing public drug development for profit, and payoffs to stop generics. Put folks in jail for fraud.

[antoniof123]

This is what happens when you have no controls to stop it from happening. This is why the government needs to keep an eye on businesses. If one is doing it then all have to or they will not survied.

Now it starts to get worst and the GOP wants more time for what to destroy the country completly. No a prayer.

[dansemom]

I feel that you can look further into hospital fraud. How often does anyone who has been in the hospital for an emergency, illness, or surgery get an itemized bill?

On two occaisions I have requested itemized bills and found that there were items I was charged for and never received. i.e. Teds stockings. The insurance company paid for them.

I notified the insurance company and contacted the patient relations department. Unfortunately I never followed up on it to see if anything was corrected.

This may be a small priced item compared to the size of a hospital bill, but it''s the little things that add up. How many millions of people are hospitalized daily?

We wonder why health insurance premiums are so high.

The only thing we see is the portion the insurance company pays and what is left for us to pay when we are finally sent a bill from the hopital.

[sjbj2322]

I agree that the hospitals should be held accountable for this but so should the local hospital districts that condone and encourage it as a means of averting their responsibility for providing indigent care services via local or state resources rather than allowing federal dollars to foot the bill. And does anyone really think the Bush administration was concerned about it. Of course not...they are perfectly happy to let the health care trust fund be depleted that much faster in order to press their agenda. Makes me sick to think of the number of children and adults that could have been insured and receiving the care they need if this had been nipped in the bud long ago. Oh and watch the private insurers as well. I informed my private carrier of over $900.00 in overcharges during a hospitalization only to be told it was no big thing. The devil it wasn''t. The next year my monthly premiums, co-pay, and deductable went up twice the amount they should have recouped from the hospital in overcharges on my bill alone.

[jonesforch]

Robert McCaslin ...
Great job hope you and your wife enjoy your vacation.

[jonesforch]

SURPRISE!! and this did happen on BUSHES watch. Talk about PORK fat?