[Congressional Record Volume 154, Number 102 (Thursday, June 19, 2008)]
[Senate]
[Pages S5836-S5837]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MARTINEZ (for himself and Mr. Cornyn):
  S. 3164. A bill to amend tile XVIII of the Social Security Act to 
reduce fraud under the Medicare program; to the Committee on Finance.
  Mr. CORNYN. Mr. President, ``the first important rule of fraud 
control is: What you see is not the problem. It is what we don't see 
that really does the damage, and the efficacy of control systems 
depends upon how well they uncover, and then suppress, the invisible 
bulk of the problem.'' Such are the words of the preeminent expert on 
health care fraud, Harvard, Kennedy School of Government Professor, 
Malcolm Sparrow.
  Just last week, the Washington Post ran a front-page article, which I 
would ask to be entered into the record, ``Medical Fraud a Growing 
Problem: Medicare Pays Most Claims Without Review.'' The story detailed 
how one

[[Page S5837]]

woman, defrauded the Government out of $105 million using just a laptop 
while sitting in her Mediterranean-style townhouse.
  While the lottery's slogan is ``All you need is a dollar and dream.'' 
This woman discovered something better. Maybe Medicare should adopt the 
slogan ``All you need is a Provider Number and a dream.''
  Quite simply, Medicare is not sophisticated enough to address the 
fraud that runs rampant through it. Every year, Medicare's anemic fraud 
controls let slip by an array of schemes that cost the Medicare program 
and taxpayers $60 billion, if not more. That is 20 percent of all 
Medicare spending.
  Often, as pointed out by the Washington Post article, Medicare pays 
claims with little or no review as to why or where the checks are going 
or to whom. One phantom company, comprising nothing more than two 
rented mailboxes and a phone number was paid $2.1 million over a 6 
month period. In another case, the owner of the fraudulent company was 
an unemployed tow truck operator who used the identities of dozens of 
dead patients. Again, ``All you need is a Provider Number and a 
dream.''
  Medicare fraud is not limited to one segment of the health care 
sector. There are numerous examples of fraud conducted by physicians, 
dentists, health systems, laboratories, teaching hospitals, patients, 
and billing specialists to name a few. While I would agree that most of 
these groups are operating on the straight and narrow, the truth 
remains that the losses associated with Medicare fraud are helping 
drive the program to bankruptcy.
  Unfortunately, conducting Medicare fraud has such a low risk of 
getting caught and less severe punishment yet high reward that it has 
even attracted organized crime. Again, ``All you need is a Provider 
Number and a dream.''
  Usually, the only way Medicare is able to recoup a small portion of 
the annual $60 billion in losses is by expending more resources on 
investigations and law enforcement activities through the Office of 
Inspector General and Department of Justice. While these agencies have 
done a commendable job in combating fraud, to a large extent it is good 
money chasing bad.

  Sometimes systems are set-up to fail. In this case, the Medicare 
fraud prevention program is not only set-up to fail, it is nearly non-
existent.
  We need to go from ``pay and chase'' to ``detect and prevent.'' 
Medicare needs to be mobile and it needs to be focused on preventing 
criminals from ever getting paid in the first place. Medicare needs a 
system that will continually, as Malcolm Sparrow said: ``uncover, and 
then suppress.''
  Today, I am proud to join Senator Martinez in what I hope is the 
first in a line of necessary common sense solutions to this problem. 
The Seniors and Taxpayers Obligation Protection Act or STOP Act, will 
protect honest taxpayers, seniors, and providers, by strengthening the 
Medicare program itself.
  To prevent fraud, the STOP Act employs lessons from the private 
sector and moves Medicare into the 21st century. For example, Medicare 
may be the only program, company, or industry left in the country that 
still thinks it is a good idea to use social security numbers for 
identification. In a time where a stolen social security number is a 
stolen identity, Medicare has not stopped printing it on identification 
cards that are sent through the mail.
  Even worse, when seniors report that their social security number is 
being used fraudulently to bill for services in Medicare that they 
didn't receive, Medicare has no ability to stop paying claims on that 
social security number or provide the senior with a new number. 
Medicare has ignored the warnings of the Government Accountability 
Office and the pleas of groups like AARP and Consumers Union to change 
this practice. Passage of the STOP Act will mean Medicare can ignore it 
no longer.
  The STOP Act requires physicians in high risk areas to review the 
claims they submitted, similar to how you or I would review our credit 
card statement at the end of the month to ensure there are no mistaken 
or fraudulent charges.
  It implements prepayment fraud detection methods, such as site 
visits, data analysis, and integrity reviews, so that a guy with a 
mailbox can no longer rely on ``All you need is a Supplier Number and a 
Dream.''
  It ensures providers are billing for only those services for which 
they are qualified.
  It tracks the usage of durable medical equipment and it conducts a 
study on the implementation prospects of real-time claims analysis 
technology.
  Yes, many acts of fraud may be invisible, but it doesn't make them 
undetectable, and it certainly doesn't mean that we should just turn a 
blind eye. I hope my colleagues and members of the health sector will 
join Senator Martinez and me in stepping up to the task of being part 
of the solution. Our seniors, our providers, and our taxpayers deserve 
better accountability from Medicare.
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