[Congressional Record Volume 142, Number 10 (Thursday, January 25, 1996)]
[Senate]
[Pages S363-S365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FRAUD, WASTE, AND ABUSE IN THE MEDICARE PROGRAM
Mr. HARKIN. Mr. President, I came to the floor today to talk about a
letter I received just yesterday from the inspector general of the
Department of Health and Human Services.
Mr. President, over the last 6 years I have spoken frequently on the
Senate floor about the problem of fraud, waste and abuse in the
Medicare Program. For several years I chaired the appropriations
subcommittee that funded the Health Care Financing Administration.
Every year I would have one full day of hearings on fraud, waste and
abuse in the Medicare Program.
Through the use of our subcommittee we have had a number of GAO
investigations and the inspector general's investigations. I was
wondering just what might be happening to these investigations because
of some of the Federal Government shutdowns and slowdowns. As
background, let me just say that the GAO has estimated that up to 10
percent of Medicare spending is lost to waste, fraud and abuse. And 10
percent out of a program running about $180 billion a year means that
is $18 billion a year going for waste, fraud, and abuse. So it is not
just a small item. It is a big item, and it is a direct hit to the
pocketbooks of taxpayers.
One of the main activities and one of the main positive forces we
have going after waste, fraud and abuse is the inspector general's
office. It is our main line of defense against Medicare fraud. As I
pointed out before, even at last year's level, they did not have enough
resources to do the job. But it is absolutely essential in stopping
this terrible waste of taxpayers' dollars and saving us money.
So I was concerned about the possible impact of the Government
shutdowns and the low level of temporary funding that the inspector
general is operating under, and what that would mean in our fight
against Medicare waste, fraud and abuse.
Last year I wrote to Inspector General June Gibbs Brown to ask her
what the impact was. Mr. President, I received her letter yesterday. I
want to share it with the Senate because it is absolutely shocking.
The inspector general has said that literally billions of dollars are
to be lost to fraud and abuse if action is not taken now. Let me read
some portions of this letter.
First of all she says:
Dear Senator Harkin: Thank you for your recent letter
expressing concern about the extent to which the critical
anti-fraud and abuse activities of the Office of Inspector
General (OIG) in the Department of Health and Human Services
(HHS) are suffering from the government shutdowns and under
the current stop-gap spending bill. Specifically, you asked
the following questions:
Were major enforcement initiatives, investigations, and
audits suspended?
[Second,] [a]re fewer initiatives, investigations, and
audits being initiated?
[Third,] [w]hat is the potential impact on Inspector
General activities of being forced to operate under another
short-term funding measure similar to the one currently in
effect?
As I said, Mr. President, the answers are shocking.
I am not going to read the whole letter. I will put it in the Record.
A few points need to be highlighted. On my question on investigations
and audit activity, listen to this, Mr. President.
Cases to U.S. attorneys offices for prosecution dropped from 92 in
the first quarter of last year to 51 in the first quarter of this year.
Indictments fell from 50 to 34.
Criminal convictions dropped from 84 for the first quarter of last
year to 36 for the same period this year.
Investigative receivables fell from approximately $77.7 million for
the first quarter last year to about $30.8 million for the same period
this year.
The Office of Inspector General issued 33 percent fewer reports,
processed 30 percent fewer non-Federal audits, and identified 40
percent fewer dollars for recovery to the Federal Government compared
to the same period last year.
The shutdowns [she went on to say] prevented us from
excluding individuals and entities from participation in
Medicare and Medicaid. Providers were allowed to continue to
bill the Medicare and Medicaid programs even though they
should have been excluded due to convictions or because they
[have been] abusive to patients.
Understand what she is saying. She is saying that certain individuals
and entities should be excluded from participation because they have
been convicted of criminal activities. They could not even keep them
out because of the their lack of funds caused by the shutdown in the
Government and because of their underfunding.
In comparison, she states that last year at the same time there were
493 health care exclusions versus only 210
[[Page S364]]
exclusions for the same period this year. Starts on 100 audit
assignments were delayed or postponed.
But here is really the central point of the whole letter.
. . . Under the continuing resolution scenario, [the
Inspector General said] the number of completed inspections
may drop to approximately half [of the number of last year,
which was 68.] Considering the program savings generated in
past years as a result of such reports, as much as $1 billion
could be lost from the drop in program inspections alone.
That is $1 billion.
Program inspections identify sources of fraud and abuse and
recommend program adjustments to prevent future occurrences.
That is what will not be done this year, as she said, under the
continuing resolution scenario.
Mr. President, I ask unanimous consent that the full text of the
inspector general's letter be printed at this point in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Department of Health and Human Services, Office of
Inspector General,
Washington, DC, January 24, 1996.
Hon. Tom Harkin,
Ranking Minority Member, Subcommittee on Labor, HHS, and
Education, Senate Committee on Appropriations,
Washington, DC.
Dear Senator Harkin: Thank you for your recent letter
expressing concern about the extent to which the critical
anti-fraud and abuse activities of the Office of Inspector
General (OIG) in the Department of Health and Human Services
(HHS) are suffering from the government shutdowns and under
the current stop-gap spending bill. Specifically, you asked
the following questions:
Were major enforcement initiatives, investigations, and
audits suspended?
Are fewer initiatives, investigations, and audits being
initiated?
What is the potential impact on Inspector General
activities of being forced to operate under another short-
term funding measure similar to the one currently in effect?
Suspension and Curtailment of Pending OIG Work
[Note: Social Security related activities have been removed
from FY 1995 figures because the Social Security
Administration became an independent agency on March 31, 1995
with its own Inspector General. The FY 1996 figures include
some activities funded by Operation Restore Trust--a limited
Medicare demonstration project funded through the Health Care
Financing Administration.]
Investigations and audit activity--comparison of the first fiscal
quarters of 1995 and 1996
Presentations of cases to United States Attorneys for
prosecution dropped from 92 in the first quarter of Fiscal
Year (FY) 1995 to 51 in the first quarter of FY 1996 while
indictments fell from 50 to 34.
Criminal convictions dropped from 84 for the first quarter
of last year to 36 for the same period this year with civil
judgements going from 27 to 19.
Investigative receivables fell from approximately $77.7
million for the first quarter last year to about $30.8
million for the same period this year.
The OIG issued 33 percent fewer reports (54 reports
compared to 82 reports), processed 30 percent fewer
nonfederal audits (861 compared to 1,223), identified 40
percent fewer dollars for recovery to the Federal Government
($14.2 million compared to $23.8 million), and is collecting
30 percent fewer dollars approved for recovery ($83.2
million compared to $120.1 million).
HHS financial statement audits
The Government Management Reform Act requires that agencies
have financial statement audits beginning FY 1996. The HHS-
wide financial statement audit requires audits of eight
operating agencies accountable for about $280 billion. The
financial statements of the Health Care Financing
Administration alone comprise expenditures in excess of $230
billion that are material to the overall departmental
financial statements and to the General Accounting Office
effort to report on governmentwide financial statements. If
travel funds are not obtained, all such audit work will be
suspended with resultant impact on HHS-wide and
governmentwide statements. Audit activity must be performed
at multiple State agencies and Medicare contractor locations,
all requiring substantial travel funds. In addition, funding
must be sought for expert medical assistance to review
medical claims.
Administrative sanctions--fines, penalties, and exclusions
The shutdowns prevented us from excluding individuals and
entities from participation in Medicare and Medicaid.
Providers were allowed to continue to bill the Medicare and
Medicaid programs even though they should have been excluded
due to convictions or because they are abusive to patients.
By comparison, there were 493 health care exclusions
implemented for the first quarter of FY 1995 versus 210
exclusions for the same period this year. Approximately 400
exclusion cases are presently awaiting implementation.
impact on new oig initiatives
During the first quarter of last year, the OIG
investigations component opened about 560 cases and closed
about 605 cases. For the same period this year, under the
continuing resolution, we opened only 425 and closed about
390. During the furlough period this year, we opened and
closed only 2 criminal cases.
Starts on 100 audit assignments were delayed or postponed
indefinitely because of the furlough. An example of this is
the national review of prospective payment system (PPS)
transfers. The United States Attorney in Pennsylvania
proposed a joint review of PPS transfers based on prior audit
work that identified over $150 million of overpayment to
hospitals. If we are able to follow the Department of Justice
proposal, we anticipate recoveries of over $300 million under
the provisions of the Federal False Claims Act. The project
has been suspended due to the furlough and lack of
adequate travel funds.
Potential Effect of Continued Underfunding
Lack of funds for travel and other expenses of field work
For investigations, audits, and inspections not funded
under Operation Restore Trust, travel has been reduced to
about one-third of the prior year's expenditure for the same
period. If the underfunding of OIG activities continues, most
travel will be suspended and employees furloughed.
Approximately 60 percent of ongoing or planned audits will be
curtailed or severely reduced in scope because of travel
requirements with the resultant loss in program savings. The
FY 1995 audit-related savings totaled $5.5 billion.
Last year the OIG issued 68 program evaluation reports.
Under the continuing resolution scenario, the number of
completed inspections may drop to approximately half that
number. Considering the program savings generated in past
years as a result of such reports, as much as $1 billion
could be lost from the drop in program inspections alone.
Program inspections identify sources of fraud and abuse and
recommend program adjustments to prevent future occurrences.
Effect on sanctions activity
The OIG expects a decline in potential settlements and
exclusions as a result of fewer investigative and audit
initiatives. In addition, since many of the false claim cases
originating from the Department of Justice are generated
through OIG investigations and audits, we expect a decline in
that caseload as well.
Currently, the OIG administrative sanctions staff has under
development 292 cases including false claims, Qui Tams, and
civil monetary penalties, all of which will be put on hold
during another furlough. Activity on them would be greatly
reduced if we are operating under a continuing resolution
with an inadequate level of funding.
Since the furlough, we have not been able to respond to
more than 2,217 inquiries from licensing boards and private
sector providers, who are required by law in inquire about
the exclusion status of a practitioner before hiring,
concerning the current status of a health care practitioner.
The minimum funding that would allow the OIG to meet its
basic obligations and maintain its infrastructure is the
amount shown in the Senate markup of the HHS appropriations
bill ($75,941,000). We have enclosed at Tab A a copy of the
Committee recommendation.
We sincerely appreciate the effort you have made toward
achieving a level of funding for the OIG that would allow us
to sustain basic services. We also appreciate your consistent
support year after year toward curtailing waste, fraud, and
abuse in Medicare, Medicaid and other HHS programs. The
attention you give to our findings and recommendations and
your enthusiastic encouragement assist us greatly in
strengthening the integrity of these important programs.
Sincerely,
June Gibbs Brown,
Inspector General.
Mr. HARKIN. Thank you, Mr. President.
Much of the problem is they have no funds for travel. It is
interesting that their auditors and their investigators can come to
work and sit at a desk, but they cannot do anything. Much of the
investigative work of the inspector general is involved in traveling
and in investigative activities. So we have hundreds of these people
sitting at their desks unable to do their jobs. Every day that the
Government is either shut down or every day that they operate under the
continuing resolution, with the short funding that they have, the
crooks and the con artists are picking Medicare's and the American
taxpayers' pockets costing us billions, as the inspector general said,
if we fail to act.
So this is not just again some little item. It is very odd to me, Mr.
President, we can pass a continuing resolution to provide a full year
of funding to a number of important programs, including the Kennedy
Center for the Performing Arts--that is fine--and yet we do not fully
fund the inspector general's office that goes out after the
[[Page S365]]
crooks and the con artists and stops them and recovers money for the
taxpayers.
We cannot fund that. I just wish somebody could justify that to me. I
do not understand it. I guess we are going to be considering a new
continuing resolution tomorrow.
I want to take this opportunity today to let my colleagues know that
I intend to insist that that continuing resolution provide adequate
funding for the Office of Inspector General in the Department of Health
and Human Services to fight Medicare fraud, waste, and abuse. If we do
not, then it is the crooks and the scam artists who will be smiling as
they rip off the taxpayers even further.
I just want to point that out, Mr. President. If there is a
continuing resolution and they are going to fund some portions of the
Government to go on, this is one portion of the Government that this
Senator is not going to let sit there and not be adequately funded.
People are talking about cutting Medicare and making our beneficiaries
pay more for their monthly premiums to make up for Medicare shortfalls
in the future. I say, wait a minute, if the General Accounting Office
is saying that up to 10 percent of Medicare money is lost to waste,
fraud, and abuse, that is $18 billion a year each year for 7 years. We
already have more money than we need right there to make up for the
Medicare shortfall that we face.
So this is an important matter and I intend to pursue it. I hope
Senators will do so on both sides of the aisle--I do not say this is a
partisan issue. I just hope we pay some attention to this issue and
make sure the Office of Inspector General is fully funded.
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