[Congressional Record Volume 143, Number 13 (Wednesday, February 5, 1997)]
[Senate]
[Pages S1018-S1019]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MCCAIN:
  S. 264. 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 proud to be introducing legislation 
today which will significantly reduce fraud and abuse by providers in 
the Medicare program. The Medicare Whistleblower Act of 1997 will 
provide strong incentives for Medicare beneficiaries to identify 
provider fraud in the Medicare system.
  As I travel around my home State of Arizona, seniors keep telling me 
about the fraudulent and negligent billings which are rampant 
throughout the Medicare Program. Over and over again, they tell me 
about their personal experiences with fraud and overbillings in the 
Medicare system. Many of the seniors say that their Medicare bills 
frequently include charges for medical services which they never 
received, double billings for a specific treatment, or charges which 
are disproportionate and severely marked up. Usually, most of these 
seniors have no idea what Medicare is being billed on their behalf and 
they have no way to obtain a detailed explanation from the Medicare 
providers.
  These personal stories from senior citizens are confirmed by analyses 
and detailed studies. According to the General Accounting Office, 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 about 10 percent of the program's costs.
  This is quite disconcerting, especially in light of the financial 
problems facing our Medicare system. Currently, the Medicare system is 
expected to run out of funds in the year 2001.
  A fundamental problem with the Medicare system is that most 
beneficiaries are not concerned with the costs of the program because 
the Government is responsible for them. One of my constituents shared 
with me an experience he had when his provider double-billed Medicare 
for his treatment and the provider told him not to be concerned about 
it because, ``Medicare is paying the bill.'' This is an outrage and we 
cannot allow this flagrant abuse of taxpayers dollars to continue. 
Remember, when Medicare overpays, we all overpay, and costs to 
beneficiaries and the taxpayers spiral while the financial 
sustainability of the program is violated.
  My bill, the Medicare Whistleblower Act addresses this fundamental 
problem in the Medicare Program. This legislation strengthens the 
procedures for detecting and identifying fraud and waste in the 
Medicare system. This bill provides beneficiaries with incentives for 
carefully scrutinizing their bills and actively pursuing corrections 
when they believe there has been an inappropriate or unjustified charge 
made to the Medicare Program. The beneficiaries would be 
financially rewarded if they detect negligent or fraudulent charges in 
their Medicare bill.

  I recognize that provider fraud is not the sole source of waste and 
abuse in the Medicare system, and I wholeheartedly support other 
initiatives which address beneficiary fraud. However, studies indicate 
that provider fraud is most prevalent and the greatest concern for the 
system, making initiatives such as this one which specifically target 
provider fraud very important.
  The Medicare Whistleblower Act will give beneficiaries the right to 
request and receive a written itemized copy of their medical bill from 
their Medicare health care provider. This itemized bill should be 
provided to the beneficiary within 30 days of the provider's receipt of 
their request. Once the beneficiary receives the itemized bill they 
would have 90 days to report any inappropriate billings to Medicare. 
The Medicare intermediaries and carriers would then have to review the 
bills and determine whether an inappropriate payment has been made and 
what amount should be reimbursed to the Medicare system.
  If the Secretary of Health and Human Services confirms that the 
charges were either negligent or fraudulent, the beneficiary would 
receive an award equal to 1 percent of the overpayment reimbursed up to 
$10,000. The financial awards given to the beneficiaries would not 
increase costs to the Federal Government since they would be paid 
directly from the overpayment. In cases 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 Treasury.
  Several important safeguards have been built into this legislation. 
First, the Secretary of Health and Human Services would be required to 
establish appropriate procedures to ensure that the incentive system is 
not abused by overzealous beneficiaries. Second, an incentive payment 
would be awarded only to the extent that the Health Care Financing 
Administration HCFA is able to recover the overpayment from the 
provider. Finally, there would be no incentive payment if HCFA can 
demonstrate that it had identified the overpayment prior to receiving 
the beneficiary's complaint.
  Some may argue that seniors and other beneficiaries should not 
receive financial rewards for fighting fraud--that it should be their 
civic responsibility. While I may agree with this contention, I also 
recognize that these seniors would not be able to detect and report 
fraud or abuse without having access to the itemized bills that this 
legislation provides. Besides, I do not see anything wrong with 
providing beneficiaries with a financial incentive for fighting waste. 
After all, we currently pay Federal employees for suggestions which 
result in savings for the taxpayers, and we pay private citizens for 
identifying fraud by defense contractors.
  It is imperative that we put an end to the rampant abuse and fraud in 
the Medicare system. This bill would contribute significantly to this 
effort.
  Mr. President, I believe that a very effective approach for detecting 
and fighting fraud is to provide individuals with a personal financial 
interest in the process. By passing this legislation, Congress would be 
empowering over 36 million Medicare beneficiaries to protect their 
program from fraud, waste, and abuse. I ask unanimous consent that the 
following letters of support from the Seniors Coalition and the 
National Committee to Preserve Social Security and Medicare be included 
in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                    National Committee to Preserve


                                 Social Security and Medicare,

                                 Washington, DC, January 27, 1997.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain: On behalf of the 5.5 million members 
     and supporters of the national Committee to Preserve Social 
     Security and Medicare, we offer our endorsement of the 
     Medicare Whistleblower Act of 1997, legislation to strengthen 
     procedures for identifying fraud and waste in the Medicare 
     program.
       A major effort to prevent fraud and abuse is essential and 
     appropriate--particularly at a time when Congress is 
     considering ways to ensure the solvency of the Medicare 
     program for current and future beneficiaries. 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.
       Your legislation will strengthen the role of beneficiaries 
     in detecting and reporting fraud and waste. Of particular 
     importance are the provisions ensuring 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

[[Page S1019]]

     program. It is also important for the Secretary to establish 
     procedures 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,

                                    Fairfax, VA, January 30, 1997.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain: The Seniors Coalition, representing 
     2.4 million senior citizens nationwise, is pleased to support 
     the legislation you have recently introduced to reduce waste 
     and fraud in the Medicare system. Our members report to us 
     the same kinds of experiences as your constituents do to you, 
     and we are certain that your legislation will help.
       However, I must note that while these are desirable 
     reforms, they do not correct the basic flaws in the Medicare 
     program, and it is these flaws which make Medicare ultimately 
     unsustainable.
       By separating those who receive benefits from those who 
     pay, Medicare encourages overuse, waste, fraud, abuse, and 
     cheating. Passage of legislation such as yours, which creates 
     some incentives to discover fraud and abuse, can never 
     substitute for the self-policing systems of true free 
     markets, where every patient has an incentive to find the 
     least expensive, most cost-effective treatment, and to 
     monitor for double-billing, mistakes, and fraud in a way no 
     artificial system can ever re-create.
       The Seniors Coalition is happy to support your efforts, but 
     we urge you to undertake a thorough and long-overdue 
     revamping of the entire program, before its internal 
     contradictions bring it crashing down on the heads of seniors 
     who deserve better treatment.
       Please let us know what we can do to help you with your 
     efforts.
           Sincerely,
                                                   Thair Phillips,
                                          Chief Executive Officer.
                                 ______