[Congressional Record Volume 143, Number 80 (Tuesday, June 10, 1997)]
[Senate]
[Pages S5455-S5456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAHAM (for himself, Mr. Mack, and Mr. Baucus):
  S. 865. A bill to provide for improved coordination, communications, 
and enforcement related to health care fraud, waste, and abuse, to 
create a point of order against legislation which diverts savings 
achieved through medicare waste, fraud, and abuse enforcement 
activities for purposes other than improving the solvency of the 
Federal hospital insurance trust fund under title XVIII of the Social 
Security Act, to ensure the integrity of such trust fund, and for other 
purposes; to the Committee on Finance.


                  the medicare anti-fraud act of 1997

  Mr. GRAHAM. Mr. President, I rise today, and join my colleagues, 
Senator Mack and Senator Baucus, to introduce timely legislation that 
addresses a problem that continues to plague the Medicare Program--
fraud and abuse. The premise of this bill is quite simple: if Congress 
is to look for cuts in the Medicare Program, it should begin with 
eradicating fraud--for several reasons:
  First, we cannot fix Medicare while letting fraud erode the system. 
The General Accounting Office estimates that the Medicare waste, fraud, 
and abuse ripoff rate is about 10 percent. With fraud pilfering the 
health system's resources losses to Medicare and the Federal share of 
Medicaid could be $30 billion annually. Using the most conservative of 
estimates, we could cover an additional 2 million seniors a year with 
funds lost just to Medicare waste, fraud, and abuse.
  Mr. President, over the next few weeks, Congress will be ironing out 
the details of a historic budget agreement--one which will finally 
balance the budget. And both Congress and the President deserve credit 
for doing so. However, a balanced budget does not come without some 
pain--some consequences. For instance, the Medicare Program will 
realize cuts of approximately $115 billion over the next 5 years. We 
will be asking our Nation's seniors to share in the sacrifice along 
with the rest of the country.
  Congress cannot, in good conscience, ask the Medicare Program and its 
beneficiaries to accept cuts unless we also work hard to eradicate 
fraud and abuse. Passage of the Kennedy-Kassebaum legislation last year 
was a step in the right direction. But the cheats and swindlers are 
clever at gaming the system. It is a sad fact that there will always be 
greedy people looking to take advantage of our Nation's seniors. So it 
is imperative that Congress be equally vigilant by cracking down on 
fraud wherever possible. Passage of my bill will continue the process 
and send this signal to the con artists and thieves: ``Your days are 
numbered.''

  My legislation is crafted to build on State successes. For instance, 
one of the most crucial provisions in my bill, modeled after an 
extremely successful Florida Medicaid antifraud program, requires 
providers of durable medical equipment, home health, and transportation 
services to post a $50,000 surety bond to participate in the Medicare 
Program.
  While a $50,000 bond is relatively inexpensive to post for scrupulous 
contractors, at the cost of between $500 and $1,500, the requirement 
has achieved tremendous results in my State. Since implementation of 
the surety bond requirement, the fly-by-night providers have scattered 
like so many roaches when the lights are turned on.
  Durable medical equipment suppliers have dropped by 62 percent, from 
4,146 to 1,565; home health agencies have decreased by 41 percent, from 
738 to 441; providers of transportation services have disenrolled from 
the State's Medicaid Programs in droves--from 1,759 to 742, a drop of 
58 percent. Fewer providers bilking the State's Medicaid Program is 
projected to save over $192 million over the next 2 years in Florida.
  Two years ago I spent a day working in the U.S. attorney's Office in 
south Florida. I realized then that it was easier to get a provider 
number under Medicare than a personal VISA; easier to get a blank check 
paid for by the Treasury than a VISA or MasterCard.
  This bill requires individuals to provide their social security 
number [SSN] and employer identification number [EIN] to get a Medicare 
provider number. This will make it more difficult for swindlers to 
enter the program. This bill has several other provisions which are 
critical to stemming rampant fraud in the Medicare Program:
  My bill would enable State fraud control units, often the first line 
in the

[[Page S5456]]

fight against health care fraud, to investigate and prosecute fraud in 
Federal health care programs.
  It would also prevent providers from discharging Medicare debt by 
declaring bankruptcy. The bill would also preclude Medicare swindlers 
from transferring their business to a family member in order to 
circumvent exclusion from the Medicare Program.
  This legislation enacts a broad-based Federal statute aimed at 
suppressing Medicare fraud. It enhances the arsenal of weapons to 
combat fraud and prescribes stiff penalties against those convicted of 
fraud.
  At the signing of the Medicare bill in Missouri 30 years ago, 
President Johnson said that Medicare had been planted with ``the seed 
of compassion and duty which have today flowered into care for the sick 
and serenity for the fearful.'' Medicare has lived up to its promise. 
But fraud is threatening to compromise the integrity of the system. We 
have the prescriptions to combat fraud. Now is the time to employ them 
if we want to save the integrity of Medicare.
                                 ______