I bill Medicaid for a bath Bernice never provides and a day of care Lucille never receives, and the Wall Street Journal Editorial Board’s New York’s Adult Day Care Racket reports that New York operators did the same, billing for services they did not provide and paying enrollment kickbacks as high as $1,000 a month. Bernice is my 58-year-old meal sealer with swollen hands. Lucille is a 79-year-old ghost in my Medicaid ledger whose hands can no longer hold a spoon or sign her name. The sandwich in your bag came from the meal money Medicaid paid me for her. You helped pay for that sandwich. I keep $0.83 a month. God bless your stewardship, and the clerk who copies without looking up.
I want you to understand this, not to feel guilty. Feeling guilty doesn’t help anyone. Arithmetic does. Let me put the numbers where you can see them. You’re counting the way I count now.
Lucille isn’t here. Her daughter brought her to my Buffalo door for intake, and my clerk copied her name across today’s attendance sheet. Medicaid doesn’t need Lucille’s body. It pays for personal care, meals, and social activity because the sheet says she was there. No aide sits beside her. The clerk copies forms. This isn’t fraud hidden inside my operation. The false attendance is the operation. You bought a day of care. I sold the receipt.
I refuse 1 aide beside Lucille because her hands cost less than the aide. That’s my business. I read the $1,000 kickback as a market map. My compliance clerk is rewriting Lucille’s file before investigators arrive. I keep $0.83 of each monthly kickback; my clerk pays the rest. The cost I refuse is 1 aide’s monthly wage. I could have paid it and still paid the kickback. I didn’t. I could have tossed $0.83 in the wastebasket; I spent it on coffee instead.
Here is the clinical account. Lucille is present on paper. No aide is assigned. Medicaid remits the invoice. The difference is retained.
At the same Buffalo center, Bernice is my 58-year-old meal sealer. Lucille’s false day is purchased at the front desk; Bernice makes the paperwork pay at the other end. I know this is unpleasant. Let me make the entry plain enough for you to follow every digit. In my codebook, entry 7A means an aide bathed 1 client. Bernice writes the entry. The client received no bath. Bernice seals peach cups instead.
By midafternoon, she has certified 31 entries for services that never happened.
Her swollen thumb slips at every lid.
A powered lid sealer would cost $1,240. I declined it. Her slow hands let me bill more entries than I certify. The Medicaid payment for the bath we never gave becomes working capital for the next invoice.
The margin is $0.03 from every false mark. I let it accumulate against the next invoice; better lids are for people with margins.
Read the lid sealer again. I know you dislike the swollen thumb, but don’t stop there. You’re looking for the cruelest object in the room. The thumb is only evidence. If I bought that sealer, Bernice’s hands would close and the gap between what we certify and what we perform would become too visible for my books. I need her hands to slow down at exactly the rate my bill requires. You may call it cruelty. I call it capacity planning. I’m telling you this because I don’t want you to waste your concern on the sealer. I want you to watch the bill. The bill is the part that matters.
Your payment buys an hour on paper and leaves the bathroom empty. It buys another peach cup for Bernice to seal. It buys a client waiting for a bath. I choose the paper every time.
At the same Buffalo center, 26-year-old Marisol is a personal-care aide. The fraud has merely changed station: Bernice converts time into an invoice, and Marisol turns my neglect into unpaid labor. I make her stay past midnight without pay. Her back locks before she reaches the bus. I approve the schedule.
This is the law: government buys a signature instead of a body. Each missing hour becomes more revenue for Bernice’s slow hands. A client remains in the bathing room without the care Medicaid says it paid for. Your payment clears into my operating account while the client is still waiting. Bernice’s thumb keeps the invoice moving.
Delphine is Lucille’s arithmetic in another body: her daughter wheels her to my Queens door because Delphine’s hands can no longer fasten her coat. Same center. Same form.
1 rung worse: her daughter does the fastening.
The aide who might have helped isn’t here. Her daughter spends the day beside an empty chair while the Medicaid money attached to the false day stays in my ledger. I keep the difference.
The state audit found 207 beneficiaries beyond a center’s maximum capacity. I put those names in my spreadsheet. The building doesn’t grow. I bill them. The New York Post reported 77 adult day-care centers within 1 mile in Queens. I own my door in that crowd. Nobody asks which door is mine. That’s better.
New York can close my storefront. It can’t close the form. As long as Medicaid buys a service while I control the record that certifies delivery, the mechanism survives. That’s the law.
Take away the easy answer. Don’t look for a villain to dismiss. I’m not unusual. I’m a curriculum. This isn’t a rogue operation. It’s Chapter 7 of Calibrated Deprivation. For 30 years, I’ve been Dean of Instruction at Warden University, grading students into this arithmetic. My graduates sit in firms that set your wage, inside state billing offices, insurance claims departments, and procurement teams. They write the checklists that keep Lucille’s file alive after I leave. The strongest subtract faster than I do. The best finish the operative checklist before my clerks finish copying it. I’m proud of them. No single owner can stop a graduating class.
The law is older than Medicaid, which has bought care it does not personally see since 1965. Matthew 23:18 treats a sworn promise and the object sworn upon as different things. The bath and the invoice for the bath are different objects too. My center keeps that distinction more precisely than Albany does.
The King James Version puts the older moral form plainly:
“He hath shewed thee, O man, what is good: and what doth the LORD require of thee, but to do justly, to love mercy, and to walk humbly with thy God?” — Micah 6:8
Micah put the person before the ledger. I put the file before the person. The distinction isn’t theology. It’s procedure.
Next spring I intend to sell my center, surrender the billing password, cancel the last in-person aide, and let my best student sign the claims. Lucille’s file will stay on the server after my name leaves. Bernice’s 31 certifications will sit on next month’s roster. The invoices will clear. The missing care won’t appear in my ledger. Medicaid’s remittance will. The next administrator isn’t my problem. I have bought season tickets to the opera. The evening slot is open now. I have nothing in it, and I am pleased about that.
At 3:15, Bernice certifies another service that never happened. Her swollen thumb misses the peach-cup lid. Your tax payment clears. The cup remains unopened. Across the floor, Lucille’s daughter is still waiting beside the empty chair. Delphine’s daughter is still holding her mother’s coat.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.