[Congressional Record Volume 140, Number 34 (Wednesday, March 23, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 23, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
           MENTAL HEALTH CARE PROVIDERS BOUNTY PREVENTION ACT

                                 ______


                            HON. JOHN BRYANT

                                of texas

                    in the house of representatives

                       Wednesday, March 23, 1994

  Mr. BRYANT. Mr. Speaker, I have become increasingly concerned about 
the abuse and mistreatment visited upon psychiatric patients by so-
called bounty hunters.
  Therefore, today I am introducing legislation to prohibit the 
intentional solicitation or offers for payment for patient referrals to 
mental health facilities. The legislation does not prohibit the 
legitimate referrals--only those unscrupulous ones which simultaneously 
violate patient needs and taxpayer pocketbooks.
  Since I started looking into this matter in the fall of 1991, I have 
been amazed at both the lengths to which some of those in the health 
care industry are willing to go and the perversity of the schemes, 
driven by a commitment to greed, rather than the Hippocratic oath.
  My limited investigation leads me to believe that a private, for-
profit psychiatric hospital can be a very dangerous thing. Reportedly, 
hundreds, possibly thousands, of patients may have been subjected to 
expensive and unnecessary treatment at private for-profit psychiatric 
hospitals. In their zeal to compete for diminishing insurance dollars, 
some of those institutions apparently have been involved in a win-at-
any cost war for patients.
  Law enforcement officials in several States have investigated and 
continue to investigate private for-profit psychiatric hospital chains 
based on allegations that they systematically kidnap patients to 
increase profits from insurance claims. Across the country, State 
attorneys general have uncovered elaborate, aggressive, creative, 
deceptive, immoral and illegal schemes being used to fill empty for-
profit psychiatric hospital beds. What was once thought to be an 
isolated problem occurring at just a few institutions in a few States 
is, in actuality, a national scandal.
  More than 200 complaints charge that among other abuses, private for-
profit psychiatric hospitals hire bounty hunters who kidnap patients 
with medical insurance whether or not hospitalization is needed.
  Some of these hospitals have set up employee-incentive programs to 
stir up new business. The hospitals are even offering kickbacks and 
bounties to employee assistance programs [EAP]. Some institutions have 
set up their own EAP's and are referring patients to themselves.
  At least one former private for-profit psychiatric hospital 
administrator testified that bounties are often paid through a third 
party to launder or disguise the money. The payment often cities a fake 
or contrived treatment, such as patient aftercare, which often is not 
performed following treatment.
  International brokers have brought thousands of Canadian patients to 
the United States for treatment. Plagued by empty beds, private for-
profit psychiatric have paid bounties ranging from $1,500 to $4,000 per 
Canadian patient. Claims from U.S. hospitals for Ontario patients alone 
increased from $5.4 million in 1988 to $51.3 million just 2 years 
later.
  One man is referred to as the ``half million dollar man.'' He 
reportedly received over 20 months of treatment in five different 
Houston hospitals and returned to Canada a cocaine addict. According to 
the Ontario Ministry of Health, recruiters targeted Toronto's down-and-
out and promised them stays in Florida or California.
  One hospital chain was getting such high numbers of Canadian patients 
that the chain negotiated discounts with American and Northwest 
airlines. Many of those sent to U.S. institutions for substance abuse 
therapy did not need to be in those U.S. facilities or did not get 
appropriate care.
  Recent disclosures indicate that some private for-profit hospitals go 
to great lengths to find and admit children. The most infamous of these 
cases, and the one that really started the latest overall 
investigation, involves an adolescent boy who was apprehended at his 
grandparents' home by two employees of a private security firm. The two 
were not even certified peace officers, even though they flashed large 
police-like badges.
  Their firm was being paid between $150 to $450 for each patient 
delivered to certain private for-profit psychiatric hospitals in the 
area. The family was told that if the 14-year-old did not cooperate, a 
warrant would be obtained and the child would be detained for 28 days. 
Officials discovered that the boy had been ordered detained by a 
hospital staff doctor based on a report by his 12-year-old brother.
  School officials have testified that private for-profit psychiatric 
hospitals really pursue referrals from public schools. Indeed, 
investigation has even found that financial relationships have existed 
between hospitals and school personnel. State authorities are looking 
into complaints that some chains offer school counselors free office 
furniture or other rewards in exchange for referrals.
  Hospital have lent their own employees to schools to help guidance 
departments evaluate psychiatric and substance abuse problems. While 
these actions are not illegal, they could create an atmosphere that 
pushes students into institutional care they did not need. Estimates 
put the level of fraud perpetrated by certain actors in the health care 
industry at $70 billion dollars. The GAO estimates the fraud could 
reach $100 billion by 1995.
  This figure dwarfs the estimated $5 billion lost through criminal 
fraud in the entire savings and loan debacle. Most authorities estimate 
that health care fraud and abuse encompasses 5 to 15 percent of this 
nation's overall medical costs--this at a time when health insurance 
premiums have skyrocketed out of reach for a significant portion of our 
citizens.
  These private psychiatric corporations are listed on our country's 
major stock exchanges and motivated by profit because shareholders 
demand high investment returns--apparently with little management 
regard for the fact that mistreatment of human beings can be the 
cornerstone for generating even greater profits. This bottom line 
crunch is forcing many for-profit psychiatric hospitals to engage in 
aggressive, and what should be illegal, recruitment and referral 
practices that totally ignore the needs of the young people and others 
they pretend to serve.
  For-profit psychiatric facility patients have been bought and sold 
through a plethora of cleverly designed schemes--each scheme more 
diabolical than the last. I am particularly outraged about the 
situation in which one psychiatric hospital marketing director was on 
the local school board which dealt with troubled children.
  In many cases, children have been transported out of State for 
treatment, a practice which increases reimbursement payments and evades 
the regulation of any government entity. As one advocate put it: ``The 
Department of Agriculture keeps tabs on every single chicken sent out 
of State, but nobody can tell you how many kids have been sent to 
psychiatric facilities out of State.''
  Current Federal laws have not curbed the abuses wrought by those who 
do not fall within the purview of the Medicaid and Medicare illegal 
remuneration statutes. That is why in the past I have introduced 
legislation to prohibit for-profit patient referrals. Patients 
referrals should be dictated by patient need and nothing else.
  To enslave troubled young people out of greed, fueled by our tax 
dollars, as has so often happened in recent years in my home State of 
Texas and elsewhere, is an abomination. Those who do so are nothing 
less than sick criminals.
  The bill I offer is a cost containment measure to protect our 
children from unconscionable abuse. This measure is meant to cover all 
forms of payment for referral--not merely traditional methods of 
referral payment.
  It further provides for criminal penalties; and violations are 
punishable by fines in excess of $250,000 and imprisonment of up to 5 
years.
  Section 1 provides that the short title of the bill shall be the 
``Mental Health Care Providers Bounty Prevention Act.''
  Section 2 creates a new offense at section 1822 of title 18, United 
States Code, imposing a fine and up to 5 years imprisonment upon any 
mental health care provider who knowingly and willfully offers or pays 
remuneration for mental health patients or any person who solicits or 
receives remuneration for referring mental health patients.
  The bill maintains the safe harbors for conduct precluded from being 
a violation under the Social Security Act. Such conduct would not be a 
violation under this bill.
  The term ``mental health care provider'' means any provider of goods 
or services for the diagnosis and treatment of mental illness, if the 
provider operates in or affects interstate or foreign commerce.
  I urge my colleagues to join me as a co-sponsor of this important and 
humane legislation.

                                H.R. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Mental Health Care Providers 
     Bounty Prevention Act of 1994''.

     SEC. 2. TITLE 18 AMENDMENT.

       (a) In General.--Chapter 89 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1822. Mental health care provider bounties prohibited

       ``(a) Whoever knowingly and willfully solicits or receives 
     any remuneration (including any kickback, bribe, or rebate) 
     directly or indirectly, overtly or covertly, in cash or in 
     kind--
       ``(1) in return for referring an individual to a mental 
     health care provider for the furnishing or arranging for the 
     furnishing of any item or service; or
       ``(2) in return for purchasing leasing, ordering, or 
     arranging for or recommending purchasing, leasing, or 
     ordering any good, facility, or service, or item from a 
     mental health care provider;

     shall be fined under this title or imprisoned not more than 5 
     years, or both.
       ``(b) Whoever knowingly and willfully offers or pays any 
     remuneration (including any kickback, bribe, or rebate) 
     directly or indirectly, overtly or covertly, in cash or in 
     kind--
       ``(1) to refer an individual to a mental health care 
     provider for the furnishing or arranging for the furnishing 
     of any item or service; or
       ``(2) to purchase, lease, order, or arrange for or 
     recommend purchasing, leasing, or ordering any good, 
     facility, or service, or item from a mental health care 
     provider;
     shall be fined under this title or imprisoned not more than 5 
     years, or both.
       ``(c) Any conduct which under section 1128B(b)(3) of the 
     Social Security Act is precluded from being a violation of 
     that section is not a violation of this section.
       ``(d) As used in this section, the term `mental health care 
     provider' means any provider of goods or services for the 
     diagnosis and treatment of mental illness, if the provider 
     operates in or affects interstate or foreign commerce.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 89 of title 18, United States Code, is 
     amending by adding at the end the following:

``1822. Mental health care provider bounties prohibited.''.

                          ____________________