[Congressional Record Volume 141, Number 160 (Tuesday, October 17, 1995)]
[Senate]
[Pages S15232-S15234]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (for himself and Mr. Kyl):
  S. 1325. A bill to amend title XI of the Social Security Act to 
provide an incentive for the reporting of inaccurate Medicare claims 
for payment, and for other purposes; to the Committee on Finance.


                     the medicare whistleblower act

 Mr. McCAIN. Mr. President, I am introducing legislation today 
with Senator Kyl that will significantly reduce fraud and abuse by 
providers in the Medical Program. The Medicare Whistleblower Act of 
1995 will efficiently and effectively create an army of private 
inspectors general intent upon wiping out Medicare provider fraud.

[[Page S 15233]]

  At Medicare town meetings throughout Arizona, we have heard over and 
over from senior citizens that the Medicare Program is rampant with 
negligent and fraudulent billings. They have told me, based on their 
personal experiences, that their Medicare bills frequently include 
services that they have not received, double billings for the same 
service, or charges that are disproportionate to the value of services 
received. Often, they have no idea what Medicare is being billed for on 
their behalf, and they are not able to obtain explanations from 
providers.
  These perceptions of Medicare beneficiaries are confirmed by more 
systematic analyses. The General Accounting Office has estimated that 
fraud and abuse in our Nation's health care system costs taxpayers as 
much as $100 billion each year. Medicare fraud alone costs about $17 
billion per year, which is 10 percent of the program's costs. A report 
by the Republican staff of the Senate Committee on Aging has documented 
a broad array of fraudulent activities, including false claims for 
services that were supposed to have been rendered after the 
beneficiaries had died.
  The Medicare Program has many problems. A fundamental problem, and 
the source of many other problems, is that too few people are 
adequately concerned about its costs because the Government is paying 
most of the bills. One constituent informed me of a situation in which 
his provider double-billed for the same service and told him not to 
worry about it because ``Medicare is paying.'' This is an outrage and 
must be stopped. When Medicare overpays, we all overpay, and costs to 
beneficiaries and other taxpayers spiral.
  The Medicare Whistleblower Act addresses this fundamental problem of 
the Medicare Program. It gives beneficiaries an added incentive to 
carefully scrutinize their bills and to actively pursue corrections 
when they believe that there has been inappropriate billing of 
Medicare. In particular, beneficiaries would be financially rewarded if 
they uncover negligence or fraud to the benefit of us all. Although 
such provider fraud is not the entire problem, and there is other 
legislation that I support which also addresses beneficiary fraud, 
studies clearly indicate that provider fraud is most prevalent and the 
greatest concern.
  Under this bill, beneficiaries would have a right to receive in 
writing from their providers, within 30 days of when their request is 
received, an itemized bill for Medicare services provided to them. The 
beneficiary would then have 90 days to raise specific allegations of 
inappropriate billings to Medicare. The Medicare intermediaries and 
carriers would then have to make one of the following determinations: 
That the bill was: First, accurate; second, innocently inaccurate, for 
example, misinterpretation; third, negligent; or fourth, fraudulent. 
All overpayments resulting from inaccurate bills will be reimbursed to 
the Medicare Program.

  If the Secretary of HHS confirms that the billing was either 
negligent or fraudulent, the beneficiary would receive a reward of 1 
percent of the overpayment up to $10,000. Because these rewards would 
be paid directly out of the overpayments, they would not increase costs 
to the Federal Government. In the case of fraud, the rewards would be 
paid directly by the fraudulent provider as a penalty, and would 
therefore not even reduce the amount of the overpayment reimbursed to 
the Federal Government. The Secretary would be required to establish 
appropriate procedures to ensure that the incentive system is not 
abused.
  Some will argue that many seniors and other beneficiaries do not need 
personal rewards for fighting fraud, and in any event, this is a matter 
of national duty. While I agree with this contention, I also recognize 
that these individuals would not be able to identify and report fraud 
without having access to the itemized bills that this legislation 
provides. Moreover, I see nothing wrong with giving beneficiaries an 
added financial incentive. After all, we pay Federal employees for 
ideas that save the taxpayers money, and we pay private citizens for 
identifying fraud by defense contractors.
  Mr. President, we must put an end to rampant Medicare fraud and 
abuse. This bill would contribute significantly to this goal. I believe 
that there is no more effective approach to detecting and fighting 
fraud than giving individuals a personal financial interest in doing 
so. Just wait and see what will happen when we empower over 36 million 
Medicare beneficiaries to ensure that their program is no longer looted 
and abused. I request unanimous consent that this bill and letters of 
support from the Committee to Preserve Social Security and Medicare and 
the Seniors Coalition be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1325

       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 ``Medicare Whistleblower Act 
     of 1995''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to--
       (1) reduce and eliminate fraud and abuse under the medicare 
     program;
       (2) reduce negligent and fraudulent medicare billings by 
     providers;
       (3) provide medicare beneficiaries with incentives to 
     report inappropriate billing practices; and
       (4) provide savings to the medicare trust funds by 
     increasing the recovery of medicare overpayments.

     SEC. 3. REQUEST FOR ITEMIZED BILL FOR MEDICARE ITEMS AND 
                   SERVICES.

       (a) In General.--Section 1128A of the Social Security Act 
     (42 U.S.C. 1320a-7a) is amended by adding at the end the 
     following new subsection:
       ``(m) Written Request for Itemized Bill.--
       ``(1) In general.--A beneficiary may submit a written 
     request for an itemized bill for medical or other items or 
     services provided to such beneficiary by any person 
     (including an organization, agency, or other entity) that 
     receives payment under title XVIII for providing such items 
     or services to such beneficiary.
       ``(2) 30-day period to receive bill.--
       ``(A) In general.--Not later than 30 days after the date on 
     which a request under paragraph (1) has been received, a 
     person described in such paragraph shall furnish an itemized 
     bill describing each medical or other item or service 
     provided to the beneficiary requesting the itemized bill.
       ``(B) Penalty.--Whoever knowingly fails to furnish an 
     itemized bill in accordance with subparagraph (A) shall be 
     subject to a civil fine of not more than $100 for each such 
     failure.
       ``(3) Review of itemized bill.--
       ``(A) In general.--Not later than 90 days after the receipt 
     of an itemized bill furnished under paragraph (1), a 
     beneficiary may submit a written request for a review of the 
     itemized bill to the appropriate fiscal intermediary or 
     carrier with a contract under section 1816 or 1842.
       ``(B) Specific allegations.--A request for a review of the 
     itemized bill shall identify--
       ``(i) specific medical or other items or services that the 
     beneficiary believes were not provided as claimed, or
       ``(ii) any other billing irregularity (including duplicate 
     billing).
       ``(4) Findings of fiscal intermediary or carrier.--Each 
     fiscal intermediary or carrier with a contract under section 
     1816 or 1842 shall, with respect to each claim submitted to 
     the fiscal intermediary or carrier under paragraph (3), make 
     one of the following determinations:
       ``(A) The itemized bill accurately reflects medical or 
     other items or services provided to the beneficiary.
       ``(B) The itemized bill does not accurately reflect medical 
     or other items or services provided to the beneficiary or 
     contains a billing irregularity but the inaccuracy or 
     irregularity is inadvertent or is the result of a 
     misinterpretation of law.
       ``(C) The itemized bill negligently describes medical or 
     other items or services not provided to the beneficiary or 
     contains a negligent billing irregularity.
       ``(D) The itemized bill fraudulently describes medical or 
     other items or services not provided to the beneficiary or 
     contains a fraudulent billing irregularity.
       ``(5) Review of findings of fiscal intermediary or 
     carrier.--
       ``(A) In general.--If a fiscal intermediary or carrier 
     makes a finding described in subparagraph (B), (C), or (D) of 
     paragraph (4), the fiscal intermediary or carrier shall 
     submit to the Secretary a report containing such findings and 
     the basis for such findings.
       ``(B) Determination by secretary.--The Secretary shall 
     determine whether the findings of the fiscal intermediary or 
     carrier submitted under subparagraph (A) are correct.
       ``(6) Recovery of amounts.--The Secretary shall require 
     fiscal intermediaries and carriers to take all appropriate 
     measures to recover amounts inappropriately paid under title 
     XVIII with respect to a bill for which the Secretary makes a 
     determination of correctness under paragraph (5)(B).
       ``(7) Antifraud incentive payments.--

[[Page S 15234]]

       ``(A) In general.--If the Secretary makes a determination 
     of correctness under paragraph (5)(B) with respect to a 
     finding described in subparagraph (C) or (D) of paragraph 
     (4), the Secretary shall make an antifraud incentive payment 
     (in an amount determined under subparagraph (B)) to the 
     beneficiary who submitted the request for the itemized bill 
     under paragraph (1) that resulted in such findings.
       ``(B) Antifraud incentive payment determined.--
       ``(i) In general.--The amount of the antifraud incentive 
     payment determined under this subparagraph is equal to the 
     lesser of--

       ``(I) 1 percent of the amount that the bill negligently or 
     fraudulently charged for medical or other items or services; 
     or
       ``(II) $10,000.

       ``(ii) Limitation of amount.--The amount determined under 
     this subparagraph may not exceed--

       ``(I) in the case of a negligent bill, the total amounts 
     recovered with respect to the bill in accordance with 
     paragraph (6); or
       ``(II) in the case of a fraudulent bill, the sum of the 
     amounts assessed and collected with respect to the bill under 
     paragraph (8).

       ``(8) Penalty.--If the Secretary makes a determination of 
     correctness with respect to a finding described in paragraph 
     (4)(D) (relating to fraudulent billing), the provider or 
     other person responsible for providing the beneficiary with 
     the itemized bill that is the subject of such findings, shall 
     be subject, in addition to any other penalties that may be 
     prescribed by law, to a civil money penalty equal to the 
     lesser of--
       ``(A) 1 percent of the amount that the bill fraudulently 
     charged for medical or other items or services; or
       ``(B) $10,000.
       ``(9) Prevention of abuse by beneficiaries.--The Secretary 
     shall--
       ``(A) address abuses of the incentive system established 
     under this subsection; and
       ``(B) establish appropriate procedures to prevent such 
     abuses.
       ``(10) Requirement that beneficiary discover negligent or 
     fraudulent bill to receive incentive payment.--No incentive 
     payment shall be made under paragraph (7) to a beneficiary if 
     the Secretary or the appropriate fiscal intermediary or 
     carrier identified the bill that was the subject of the 
     beneficiary's request for review under this subsection as 
     being negligent or fraudulent prior to such request.''.
       (b) Payment of Antifraud Incentive to Medicare 
     Beneficiary.--Section 1128A(f) of the Social Security Act (42 
     U.S.C. 1320a-7a(f)) is amended--
       (1) in paragraph (3), by striking ``(3)'' and inserting 
     ``(4)''; and
       (2) by inserting after paragraph (2) the following:
       ``(3) Any penalty recovered under subsection (m)(8) shall 
     be paid as an antifraud incentive payment to the beneficiary 
     who submitted the request for the itemized bill under 
     subsection (m)(1) that resulted in the imposition of the 
     penalty.''.
       (c) Conforming Amendment.--Subsections (c) and (d) of 
     section 1128A of the Social Security Act (42 U.S.C. 1320a-7a) 
     are each amended by striking ``(a) or (b)'' each place it 
     appears and inserting ``(a), (b), or (m)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to medical or other items or 
     services provided on or after January 1, 1996.
                                                                    ____

                                    National Committee to Preserve


                                 Social Security and Medicare,

                                 Washington, DC, October 16, 1995.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: On behalf of the nearly six million 
     members and supporters of the National Committee to Preserve 
     Social Security and Medicare, I offer our endorsement of the 
     Medicare Whistleblower Act of 1995, legislation to strengthen 
     procedures for identifying fraud and waste in the Medicare 
     system.
       A major effort to prevent fraud and abuse is essential and 
     appropriate--particularly at a time when Congress is 
     considering ways to reduce federal health care costs. It is 
     essential that we enlist the cooperation of the public, 
     beneficiaries, providers and carriers to curb fraud and waste 
     in the Medicare program and ensure that Medicare funds go 
     toward patient care. As you know, major and increasingly 
     complex patterns of fraud and abuse have infiltrated many 
     health sectors including ambulance and taxi services, 
     clinical laboratories, home health and durable medical 
     equipment providers.
       Your legislation will strengthen the role of beneficiaries 
     in detecting and reporting fraud and waste. Of particular 
     importance are the provisions mandating that beneficiaries be 
     provided, upon request, copies of itemized bills submitted on 
     their behalf. Beneficiaries must have accurate information 
     about bills submitted on their behalf in order to 
     meaningfully participate in this program. It is also 
     important for the Secretary to establish standards to prevent 
     abuse or over-use of the reporting system.
       Seniors thank you for your help in combating this growing 
     problem.
           Sincerely,
                                                 Martha A McSteen,
     President.
                                                                    ____



                                        The Seniors Coalition,

                                                 October 12, 1995.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: On behalf of the two million members 
     and supporters of The Seniors Coalition, I salute your 
     efforts to reduce the fraud and abuse which have plagued the 
     Medicare system. We also believe that seniors themselves are 
     excellent ``Inspectors General,'' and, when empowered to do 
     so will be a most effective whistleblower force.
       The Seniors Coalition stands ready to work with you and 
     every other member of Congress in taking action to put an end 
     to rampant Medicare fraud and abuse.
           Sincerely,
                                                      Jake Hansen,
                    Vice President for Government Affairs.
                                 ______