If the U.S. can cut out fraud from the health-insurance system, we can all save a lot of money and get better care.

That’s something just about everyone can agree on. What’s tougher, of course, is actually trying to root out the fraud, or even defining what exactly “fraud” is.

“There is a lot of fraud, waste and abuse in the system,” said Greg D’Angelo of the Heritage Foundation, a conservative-leaning think tank. “It’s sort of marbled into the meat, and identifying it is hard.”

President Obama threw out a number of $1 billion in savings that could be achieved "by rooting out abuse, waste [and] fraud throughout our health-care system" when he spoke to the American Medical Association recently, but many estimates have the actual amount of fraud in the tens of billions of dollars or more.

“Whatever changes you make” in the health-care system, “you have to look at it through the lens of, does this open up opportunities for fraud, or does it hopefully close some?” said Dennis Jay, executive director of the Coalition Against Insurance Fraud. “There are more ways to commit this crime than any other white-collar crime.”

Medicare, Medicaid and private insurance all are susceptible to fraud, but the government-run plans seem to be the main places it occurs.

“Fraud is rampant” in Medicare and Medicaid, D’Angelo said. “They don’t do the things private insurers do” to try to clamp down on fraud, “they just cut the checks.”

He added that if reform efforts create a public health-insurance option, “you might have administrative savings, but you get that savings at a cost -- increased fraud.”

In addition, many states lack the resources to go after fraud on their own, even in areas such as simple business practices that in theory might show fraud relatively quickly.

Jay of CAIF offered just a few major examples of fraud in the system:

• Medical equipment: “Wheelchairs alone are a multimillion-dollar business in this country,” Jay said. He said people will, for instance, go door to door, and give people wheelchairs valued at $200, but charge the government $2,000.
• Drugs, particularly painkillers: “With all the pain clinics and pain management, painkillers are flooding the system,” Jay said. “Tens of billions of dollars between public and private [plans] are going out into the system every year” for these drugs.
• Medicare and Medicaid: “People go through poor neighborhoods, offering people coupons to McDonald’s for access to their Medicaid cards,” Jay said, adding that “immigrant gangs are coming into this country for the sole purpose of eating off Medicare and Medicaid.”

Some people think the Obama Administration’s health-care reform proposals could truly cut down on fraudulent and otherwise unnecessary expenditures.

“They are going to squeeze waste out of the system… when physicians and patients have more and more information,” said Ron Pollack, executive director of Families USA, a liberal-leaning health-care group.
Jay of CAIF agreed.

“We think there’s some real savings to be had, because frankly, we don’t think the federal government has done a very good job of fighting fraud,” Jay said. For instance, he noted, “they haven’t partnered with the private sector, which has some good ideas for fighting fraud.”

Jay said, “there needs to be an infrastructure to coordinate within the federal government” on the issue of health-insurance fraud, adding that there had already been talk of a new, joint office between the Department of Justice and Health and Human Services that also would have “the responsibility of serving as a liaison with the private sector.”

But with public-sector programs historically not the best at rooting out fraud and waste, actual anti-fraud savings could be hard to achieve, even if the reforms are able to pare costs from the administrative end.