[Congressional Record Volume 141, Number 162 (Thursday, October 19, 1995)]
[Senate]
[Pages S15359-S15360]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                HEALTH CARE ANTIFRAUD AND ABUSE EFFORTS

   Mr. COHEN. Mr. President, over the last week there has been 
substantial criticism levied against the health care fraud and abuse 
provisions contained in the House Medicare and Medicaid reform 
proposals. Unfortunately, some of the headlines and attacks imply that 
all Republican Budget Reconciliation legislation is soft on fraud and 
abuse.
  Headlines such as ``GOP Medicare Bill Seen to Favor Fraud,'' and 
``GOP Plan to Ease Medicare Fraud Rules `Terrible,' May Go,'' and 
``Beneath Surface, Health Care Plan Is Offering Boons'' are leading the 
public to believe that all Republican Medicare proposals are going 
light on those who are ripping off Medicare while honest Medicare 
providers and some beneficiaries are being asked to make sacrifices to 
save Medicare.
  As the author of fraud and abuse provisions in the Senate 
reconciliation bill that was recently marked up by the Finance 
Committee, I feel that I must set the record straight, at least as it 
concerns the Senate version.
  I commend the Senate Finance Committee and the Senate leadership for 
its strong commitment to tough antifraud measures. Many law enforcement 
officials have indicated to me that the Senate bill contains the 
toughest and most comprehensive--but fair--health care antifraud bills 
to come out in decades. It pains me to see headlines stating that 
Republican efforts on health care fraud fall short.
  Let me tell you about what my Senate colleagues and I have 
incorporated in the Senate budget reconciliation bill. My legislation:
  Creates an antifraud program to coordinate Federal, State, and local 
law enforcement efforts to combat fraud and abuse;
  Appropriates a mandatory $200 million in fiscal year 1996 for 
antifraud investigators and auditors with a 15-percent increase every 
year thereafter for 7 years;
  Makes it mandatory for the Secretary of Health and Human Services to 
exclude individuals from receiving payment from Medicare and Medicaid 
when convicted of felonies relating to health care fraud and allows the 
Secretary to exclude individuals convicted of a criminal misdemeanor 
related to a health care offense;
  Sets minimum periods of exclusion from Medicare and Medicaid 
payments;
  Allows the Secretary to exclude individuals who have direct or 
indirect ownership or control interest of 5 percent or more in an 
entity--or is an officer or managing employee--if the entity is already 
excluded from Medicare or Medicaid;
  Allows the HHS Secretary to impose intermediate sanctions on a 
Medicare HMO if the HMO fails to carry out the contract such as in 
quality of care 

[[Page S 15360]]
areas. These penalties range from $10,000 to $100,000 depending on the 
violation. Suspension of continued enrollment or payments can also be 
used as sanctions;
  Establishes a national health care fraud and abuse data collection 
program for reporting final adverse actions against health care 
providers, suppliers, or practitioners. The information in the data 
base is required to be available to Federal and State government 
agencies and health plans according to procedures that the Secretary 
will set by regulation;
  Increases civil monetary penalties from $2,000 to $10,000 for a 
number of current fraud and abuse violations;
  Adds new prohibited practices to the current law for which civil 
monetary penalties can be assessed such as: incorrect coding; medically 
unnecessary services; and persons offering remuneration--including 
waiving coinsurance and deductible amounts--to induce the individual to 
order from a particular provider or supplier receiving Medicare or 
Medicaid;
  Allows the HHS Secretary to impose civil monetary penalties of up to 
$10,000 per violation for criminal anti-kickback violations;
  Establishes enhanced fraud and abuse guidelines to enable the 
provider community to better comprehend anti-kickback requirements;
  Amends the criminal code to include:
  A new health care fraud statute;
  Forfeiture of property that is obtained from the proceeds traceable 
to health care fraud;
  Injunctive relief on activities related to health care fraud;
  Grand jury disclosure for health care fraud proceedings;
  Criminal penalties for false statements;
  Criminal penalties for obstruction of a criminal investigation;
  Criminal penalties for theft or embezzlement;
  Criminal penalties for laundering of money used in health care fraud 
offenses; and
  Subpoena authority to the Attorney General for health care fraud 
cases.
  Extends the authority of the State Medicaid fraud units by allowing 
the units to investigate other Federal fraud abuses at the approval of 
the relevant Federal agency; and allowing investigation and prosecution 
in the case of patient abuse in non-Medicaid board and care facilities.
  This legislation has received the enthusiastic endorsement of law 
enforcement and prosecution agencies. At a hearing of the Senate 
Special Committee on Aging that I chaired this past March, FBI Director 
Louis Freeh testified:

       The legislation . . . addresses for the first time in a 
     comprehensive way not only the problem, but some of the 
     important solutions which we in law enforcement look to . . . 
     Aspects of the bill--the establishment of a fraud and abuse 
     database, the coordination that would be required in 
     antifraud efforts between the Department of Justice and HHS, 
     the establishment of an antifraud account--are tremendously 
     innovative and helpful tools . . . A straightforward health 
     care fraud statute would simplify prosecution of these cases 
     and greatly enhance the ability of law enforcement to attack 
     this problem.

  At that same hearing that I convened on health care fraud and abuse, 
the HHS Inspector General June Gibbs Brown testified:

       We strongly support the bill . . . which proposes a number 
     of innovative ways to address health care fraud and abuse . . 
     . strengthening existing legal remedies for addressing fraud 
     and abuse, amending current criminal laws, as well as 
     enhancing administrative sanction authorities available to 
     the Department such as civil monetary penalties and program 
     exclusions which would aid in the fight against health care 
     fraud and abuse.

  The health care fraud provisions contained in the Senate bill have 
received endorsements and support from the National Association of 
Attorneys General and the Medicaid fraud control units. In addition, we 
worked very closely with the Department of Justice to create a fair, 
workable proposal that cracks down on fraud while not penalizing honest 
health care providers.
  Once more, the Senate provisions save billions of taxpayers dollars 
without cutting services or raising taxes. Specifically the antifraud 
provisions yield over $4 billion in savings.
  In addition, many of my colleagues both Republican and Democratic 
have supported and encouraged this bill for a long time including the 
majority leader, the chairmen of the Budget Committee, the Banking 
Committee, the Veterans' Committee, and the Appropriations Committee. I 
am also pleased to point out that several of my colleagues from the 
other side of the aisle have cosponsored this antifraud legislation, 
including Senators Pryor, Nunn, Bradley, Graham, and Moseley-Braun.
  Mr. President, that is why I stand before the Senate today to respond 
to this onslaught directed at the House provisions. We in the Senate 
have worked too hard and too long to come up with a strong health care 
antifraud and abuse bill, that not even the most partisan among us 
could attack. We must not, Mr. President, let ourselves get wrapped up 
in the criticism that is being directed at the House provisions.
  It is my understanding that the House has made some changes to its 
earlier proposals in order to toughen its response to health care 
fraud. Specifically, provisions have been added to toughen criminal 
sanctions against fraudulent health care providers. While I am very 
pleased that the House leadership took this step, I still have strong 
concerns regarding some remaining provisions in the House bill that 
could severely weaken our efforts to combat health care fraud.
  I thank my colleagues for all their longstanding support on this 
issue and for letting me have the opportunity to set the record 
straight. 

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