[Congressional Record Volume 141, Number 121 (Tuesday, July 25, 1995)]
[House]
[Pages H7556-H7557]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STOP WASTING MEDICARE FUNDS
The SPEAKER pro tempore. Under the Speaker's announced policy of May
12, 1995, the gentleman from Florida [Mr. Stearns] is recognized during
morning business for 5 minutes.
Mr. STEARNS. Mr. Speaker, I do not think many Members know how many
more cases of fraud, waste, and abuse have come before our Committee on
Commerce. According to the General Accounting Office, the amount of
taxpayers' dollars that will be lost to waste, fraud, and abuse for
fiscal year 1996 is estimated to be an astounding $19.8 billion, or
roughly 10 percent.
In hearings held in both the House and Senate, evidence was presented
showing how widespread these practices have become. The Committee on
Commerce on which I sit has been holding a series of hearings on waste,
fraud, and abuse; and frankly, some of the examples that we have
discovered are simply unbelievable.
One such example was transmitted to me by Willis Publishing Co. in
Lebanon, GA. I was provided with documented evidence of licensed
providers of goods and services marking up their products by as much as
a thousand percent. That is right. You heard me correctly. A thousand
percent.
You might ask, how is this possible? A good example is billing of
Medicare-Medicaid $1,210.55 for 155 adult diapers which on a wholesale
level cost 41 cents. Tripling the wholesale cost, a great markup, would
have resulted in a price of $1.23 each.
The licensed Medicare provider billed Medicare for $1,210.55,
collected $986.44, and then had the nerve to bill Medicaid for the
remaining $242.11. U.S. taxpayers paid $7.81 for each one of these
diapers which went on wholesale for 41 cents each.
I will include the material I received from Willis Publishing in the
Record.
Another very telling example of that further demonstrates that this
type of abuse, but on a larger scale, was reported during the hearings
held before the Senate Select Committee on Aging this past March.
At those hearings, the inspector general at the Department of Health
and Human Services testified that a special investigation of home
health care visits for which Medicare reimbursement was sought by a
health care agency in Florida showed that from the $45.4 million that
was claimed, the office of inspector general estimated that almost $26
million did not meet Medicare reimbursement guidelines.
This is just one agency in the State of Florida covering home health
visits. Frankly, I shudder to think what the IG's office would find if
it investigated all 50 States.
I would like to convey yet another example that was sent to my office
by a constituent from Altoona, FL. This letter read, in part, ``The
hospital charges seemed to me to be excessive. One in particular in the
amount of $195 was for trimming my toenails. My only comment to that
would be, that is a pretty expensive pedicure.''
Mr. Speaker, it doesn't take a math genius to figure out how much
money we could save by wiping out waste, fraud, and abuse in the
Medicare Program. By my calculations, if, as has been reported by the
GAO, such practices of bilking Medicare at the cost of $20 billion a
year are now prevalent, then by putting a stop to this type of
fraudulent behavior we could save $140 billion in expenditures over the
next 7 years.
Mr. Speaker, earlier this year I introduced legislation to establish
a bipartisan commission on the future of Medicare to make findings and
issue recommendations on the future of this program. One of the areas
on which the commission shall make specific findings is the need to
eliminate waste, fraud, and abuse.
We are doing a vast disservice to our seniors if we do not stop this
type of abuse from occurring. Such practice not only costs taxpayers
money, but it cheats our seniors by denying them access to benefits
they would have otherwise received.
Mr. Speaker, I include the following material for the Record:
Willis Publishing,
Lebanon, GA, July 13, 1995.
c/o Representative Cliff Stearns,
Rayburn Building,
Washington, DC.
Ms. Crow: Here is the question I'd like someone to answer
during your congressional hearings on fraud and abuse in the
Medicare/Medicaid system:
``How are prices set for the goods and services sold to
Medicare/Medicaid recipients and who approves those prices?''
It is my belief, based on 2 years research, that there is
corruption in every step of the Medicare/Medicaid delivery
system. Per our conversation today, here is a synopsis of my
findings:
[[Page H 7557]]
1. ``Licensed providers'' are bribing government officials
for the license and then for setting the prices paid at
artificially high levels: [Example (see document transmitted
with this letter): The ``licensed providers'' of goods and
services are marking their products up by as much as 1,000%
(one-thousand percent). An example of billing Medicare/
Medicaid $1,210.55 for 155 adult diapers which cost 41 cents
each wholesale is included with this transmission. Tripling
the wholesale cost--a great markup--would have resulted in a
price of $1.23 each. The ``licensed Medicare provider''
billed Medicare for $1,210.55, collected $968.44 and then
billed Medicaid for the remaining $242.11. U.S. Taxpayers
paid $7.81 each for diapers which wholesale for 41 cents
each!]
2. Facilities which provide services to the elderly and
handicapped are paying bribes to government agency personnel
who refer the elderly and handicapped to them for treatment;
[I have access to a tape of a conversation between a druggist
and a personal care home owner in which the druggist offered
a ``kickback'' if the owner would allow him to bill Medicare/
Medicaid for all prescriptions of the owner's residents. This
was not a ``volume discount'' but an under-the-table bribe.]
3. ``Licensed providers'' are bribing owners of facilities
providing housing and other services to the elderly and
handicapped to allow the providers to furnish goods and
services to their residents; [Example: a ``licensed
provider'' approached the owner of a personal care home about
providing ``hip protectors'' to the elderly residents of the
facility. The ``provider'' said he had a doctor who would
``sign off'' on the ``protectors'' and that the ``hip
protectors'' were already ``Medicare approved''. The ``hip
protector''
consisted of two cotton pads about 6 inches in diameter
connected with Velcro belts to hold them in place around
the hips. The price to Medicare--$300.00 per unit!]
4. The nursing home and home-health industries are bribing
legislators and government administrators and regulators to
channel all Medicare/Medicaid payments into their industries
rather than to the less-expensive ``intermediate care'' homes
and ``local'' nurses, doctors and social workers who might
accomplish the same goals at one-third to one-half the cost
of nursing homes and the ``licensed'' home-health agencies.
[This is common knowledge among State legislators in Georgia.
Studies from Georgia government agencies and corroborating
studies from Oregon, Maryland, South Carolina and numerous
other places have shown that of the 40,000+ people residing
in 24-hour skilled nursing facilities in Georgia with
Medicaid funding, more than two-thirds do not need ``skilled
nursing'' and would be better off in a smaller, more
residential setting like a personal care home with the
resultant savings to Georgia taxpayers of more than
$350,000,000 per year!
In terms of long term care for the elderly and handicapped,
including home-health and residential facilities, here are
some experts that you might wish to contact regarding
potential savings to Medicare/Medicaid and the real benefits
for the elderly and handicapped which would be derived by
eliminating the graft and corruption from the system:
Richard Ladd (former head Oregon and Texas agencies
handling the elderly and handicapped who succeeded in
reducing nursing home populations in both states) (512) 266-
7406/266-7648, Austin, TX
Professor Rosalie Kane, Institute for Health Services
Research, Univ. Minnesota, 420 Delaware Street SE, Box 197,
Mayo Building, Room D-527, Minneapolis, MN 55455 (612) 624-
5171]
Larry Polivka, University of S. Florida, Aging Dept.,
Tampa, FL (813) 974-3468
Please pass along my gratitude to Rep. Stern for the good
work. If the fraud and abuse were eliminated in Georgia from
the Medicare/Medicaid system, it would reduce the that
expenditure by at least 50% while not cutting one needed
service to the elderly and handicapped.
I am continuing my research and working with the Georgia
Attorney General's office, several legislators and many
professionals in the long-term care field. If I find more
information, I'll send it along and if there is some specific
information you need, please let me know.
Sincerely,
Clay Willis.
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