Medicare was signed into law by President Lyndon Johnson on July 30, 1965. And, as I developed tonight's story on Medicare fraud, I learned the shenanigans of bilking dollars from the health care program began surfacing within a few years of the program's inception. It shouldn't be a real surprise. Whenever any government program is set up, dispending benefits and services to a large group of people, it's going to attract more than its share of people looking for ways to spirit away even more federal cash.

Part of the focus of tonight's story was trying to answer the question: Is it "worth it" to try to crack down on Medicare fraud? By most respects, actively enforcing fraud statutes as they relate to federal health care spending appears to very much be a worthwhile activity. The Department of Health and Human Services issued a press release today on the latest federal dragnet of fraud suspects. A team of federal agents working in New York, Louisiana, Boston, and Houston arrested 32 people. And, throughout the past two months, the federal Medicare Fraud Strike Force, composed of FBI agents and investigators from the DOJ and HHS, recovered $371 million from companies and individuals allegedly running Medicare-related frauds. The HHS Office of Inspector General, in it's 2007 report, said $797 million had been recovered during that fiscal year from Medicare fraud activity and returned to the Medicare Trust Fund.

The "big fish" of Medicare fraud are not the fly-by-night storefront operators, or the shady physicians who sometimes take part in such schemes. The big fraud recovery money from what would otherwise be legitimately operating companies. For tonight's story, we talked with Marcella Auerbach, a former DOJ prosecutor and now the managing partner at Nolan & Auerbach. Her firm specializes in what are usually called "whistleblower lawsuits" -- cases brought on behalf of the federal government, against a company, by an insider with knowledge of the alleged scam. Such whistleblower cases, strengthened by the federal government's False Claims Act, have resulted in fines and settlements in the hundreds of millions. Merck paid a record $900+ million in fines for a related case in 2008. Tenet Healthcare paid $700 million in combined fines and claims in 2006.

In May 20, 2009, President Obama signed the Fraud Enforcement & Recovery Act of 2009, which included amendments to the False Claims Act. (It was the first time the FCA has been amended since 1986.) With the strengthened laws now on the books, federal investigators may be able to recover many billions more. And as Auerbach told us in our interview, such funds will be increasingly important as the nation debates how best to pay for, and care for, the millions of uninsured people at the center of the health reform debate.