Q. Why is fighting fraud in Medicare and Medicaid important?
A. The federal debt has ballooned to a record $14 trillion, and the deficit this year alone will be $1.3 trillion. Congress is currently debating whether it will make budget cuts in a short-term funding bill needed to continue federal programs for the remainder of the fiscal year. Tough decisions need to be made, and cuts will impact many Americans. Medicare and Medicaid spending is one of the largest expenditures in the federal budget. Every dollar lost to fraud shortchanges taxpayers and the beneficiaries who rely on the health care programs.
Q. What's the scope of Medicare and Medicaid fraud?
A. The best estimates are that between five and eight percent of the money spent on Medicare and Medicaid is lost to fraud every year. The federal government spent $502 billion on Medicare and $379 billion on Medicaid in fiscal 2009. So, it is estimated between $40 billion and $70 billion was lost to fraud that year.
Q. What has been done to curb this fraud?
A. The federal False Claims Act is one of the most effective tools against health care fraud. I authored a major update of this law, in 1986, with Rep. Howard Berman of California. Since then, it has recovered more than $28 billion and deterred billions of dollars in additional fraud against the taxpayers. The qui tam whistleblower provisions that were created by our 1986 update are among the most successful elements of the False Claims Act. These provisions allow average citizens who learn about fraud to report it and file suit to recover tax dollars that have been lost to fraud. This year, the False Claims Act brought in $3 billion in recoveries, with $2.5 billion from health care fraud cases, and nearly $2.4 billion of the recoveries thanks to the qui tam whistleblowers provisions. I've worked repeatedly to fortify and protect this statute. It's effective and, as a result, there are constant attempts to weaken or even gut the law.
This civil recovery of public dollars that otherwise would be lost to fraud is a great victory in the fight against fraud. It ought to be buttressed by a robust criminal prosecution. That effort is falling short. At the end of last year, I asked the Attorney General and the Secretary of Health and Human Services to account for the falling number of criminal prosecutions. Administration leaders promote the value of a special fraud prevention and enforcement task force known as HEAT. That stands for the Health Care Fraud Prevention & Enforcement Action Team. The new health care law dedicates additional federal dollars to HEAT and related efforts. In fiscal 2009, there were a record number of criminal health care fraud defendants, but the conviction rate for health care violations is flat, resulting in a falling conviction rate. Of the 803 criminal defendants charged that year, only 583 were convicted or plea bargained. That's a 72 percent conviction rate compared to past rates that topped 90 percent. It looks like things are improving since fiscal 2009, but continued oversight of the Justice Department is needed. To strengthen the ability of government watchdogs to see what's actually happening with tax dollars directed to anti-fraud efforts, more information should be included in publicly available Health Care Fraud and Abuse Control Account reports each year. For example, 75 percent of the discretionary dollars that Congress has directed to HEAT, goes to the Department of Health and Human Services for vague initiatives labeled oversight. There should be accountability as to how exactly this money is used to achieve criminal prosecutions.
I also want to make certain that qui tam settlements do justice to taxpayers. They never should be just a cost of doing business for corporations and contractors who were engaged in fraud. The Justice Department is reluctant to share details of settlements reached under the False Claims Act, despite the taxpayer interest in making this information transparent. So, I will introduce legislation this year to require the Attorney General to report each year details about the settlements to Congress. Again, it's a matter of accountability.
Q. What can be done to prevent fraud in the first place?
A. I also plan to re-introduce my comprehensive bill to protect health care dollars. The bill is a package of common sense initiatives to fight fraud, waste and abuse in taxpayer-sponsored health care programs. As spending on these programs continues to grow, Congress should act quickly to pass these reforms. A major component of this reform effort of mine would give the government more time to evaluate the legitimacy of Medicare providers before payment is required when there's suspicion of foul play. Without this change, we're left with a pay-and-chase situation that only enables fraud against the taxpayers. My legislation would help program officials better detect fraud with new disclosure requirements. It would enhance coordination among federal agencies responsible for fighting fraud. And it would make penalties tougher and apply them more broadly than they are today.