[Congressional Record Volume 157, Number 34 (Tuesday, March 8, 2011)]
[House]
[Pages H1583-H1584]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             MEDICARE FRAUD

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Florida (Mr. Stearns) for 5 minutes.
  Mr. STEARNS. Mr. Speaker, last week, as chairman of the Oversight and 
Investigations Subcommittee of Energy and Commerce, I held a hearing on 
the problem of Medicare fraud. This is not a new issue. It has been a 
continuing problem with Medicare, and I have been concerned about 
Medicare fraud for some time here. Last Congress, I introduced a bill 
to increase the civil and criminal penalties on those who defraud the 
Medicare program.
  In fact, in 1990, the Government Accountability Office, GAO, listed 
both Medicare and Medicaid as high risk because these programs are 
vulnerable to waste, fraud, abuse, and mismanagement. Now, how badly 
mismanaged are we talking about? Well, the GAO recently issued a report 
that there was $48 billion just in improper payments. This isn't fraud. 
This is just improper payments. So when it comes to fraud, it is 
estimated anywhere from $60 billion to $90 billion is lost to Medicare 
fraud every year.
  During this hearing, I asked the Director of Medicare Program 
Integrity, whose job it is to protect Medicare against fraud and abuse, 
if he knew how much money is lost to fraud in Medicare. He could not 
answer this question. The following week, Secretary Sebelius was asked 
in a Health Subcommittee hearing if she knew how much money was lost to 
fraud in Medicare. Her answer: ``If we knew how big it was, we'd 
hopefully shut it down.''
  But in my hearing, Special Agent Omar Perez, the head of the Medicare 
Fraud Strike Force in the Miami region of Florida for the Office of the 
Inspector General, testified he was able to find $3.8 billion in 
Medicare fraud. My colleagues, this is one city. If extrapolated across 
50 States, with almost 20,000 municipalities, you can see how we could 
get to $60 billion to $90 billion in fraud. According to the Inspector 
General, Medicare fraud is more lucrative than the drug trade, with 
easy money, less violence, and lighter punishments. And organized crime 
is taking notice and getting involved in defrauding Medicare.
  So here are five reform ideas that came out of this hearing that were 
mentioned to help secure Medicare against criminals engaged in 
defrauding the program.
  First, Medicare needs to maintain better control over their provider 
network. It is easy for a company to do business with Medicare, and the 
burden is on the government to remove a company from the Medicare 
program. This needs to change to allow the government to remove bad 
actors from the program quickly and efficiently.
  Secondly, Medicare needs to significantly improve their provider and 
supplier screening process. While individuals have a right to Medicare, 
companies do not have a right to become or stay a Medicare provider.
  Third, Medicare needs to shift away from a fee-for-service program. A 
capitated managed care organization provides a strong financial 
incentive to the managed care organization to eliminate fraud and 
abuse. It is the managed care plan that has the financial risk and not 
the United States Federal Government when criminals perform fraud. 
Managed care organizations present their own set of challenges but need 
to be considered when discussing reforms to eliminate fraud in 
Medicare.
  And fourth, Medicare needs to increase the role of physicians in 
detecting and preventing fraud themselves. Medicare providers and 
suppliers must use a doctor's prescription to obtain government 
reimbursement. Bad actors forge these documents. Previously, the GAO 
has recommended that Medicare require that physicians receive a 
statement of Medicare home health services that their patients receive 
so they can review the documents. This will allow them to look at it 
carefully and detect any potential misuse of their authorizations.
  And lastly, Medicare needs to use predictive computer modeling and 
other technologies. The credit card industry uses this modeling to 
identify potentially fraudulent transactions. Medicare and Medicaid 
should adopt this style of analysis to prevent fraudulent claims.
  Mr. Speaker, these are five simple ideas to empower the Medicare 
program to stop the fraud in this system,

[[Page H1584]]

and this was recommended from the hearing what we had in Oversight and 
Investigations. It must be stated again there is an estimated $60 
billion to $90 billion in fraud in Medicare every year, and of course, 
no one over at Health and Human Services knows how much is lost. The 
Secretary of Health and Human Services could not even come up with a 
number. And think of that. After 45 years of this program, no one knows 
how much fraud is in Medicare, and no steps have been taken to really 
analyze and find out. Yet we have all the baby boomers that are 
beginning to retire. The cost of Medicare will explode, and the hidden 
cost of fraud will increase.
  My committee will forward the material from the Oversight and 
Investigation hearing to the Health Subcommittee to start to develop 
legislation to address these problems with Medicare fraud. We have a 
$1.5 trillion deficit, and eliminating waste, fraud, and abuse is 
necessary to balance our budget, and we should start now.

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