[Congressional Record Volume 160, Number 76 (Tuesday, May 20, 2014)]
[Senate]
[Pages S3190-S3191]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. NELSON (for himself, Ms. Collins, Mr. Carper, Mr. 
        Grassley, and Mr. Casey):
  S. 2361. A bill to amend title XVIII of the Social Security Act to 
crack down on fraud in the Medicare program to protect seniors, people 
with disabilities, and taxpayers; to the Committee on Finance.
  Mr. NELSON. Mr. President, I am joined today by my colleague Senator 
Collins to introduce legislation aimed at strengthening the 
government's hand in stopping Medicare fraud. Senator Collins and I 
have tried to offer some decent leadership to the Senate Special 
Committee on Aging and in the process we have heard a lot about 
Medicare and Medicaid fraud. I want to thank Senators Carper, Grassley, 
and Casey for partnering with us to sponsor this legislation we are 
introducing today.
  Earlier in the year Senator Collins and I convened a hearing of the 
aging committee to examine what government was doing to prevent 
Medicare fraud. The committee heard from law enforcement that despite 
the recent increase in prosecutions, Medicare fraud continues to run 
rampant. It is especially true in my State of Florida, where South 
Florida remains, unfortunately, ground zero for Medicare fraud.
  We also heard from the Medicare organization itself about what the 
program is doing to try to better detect and prevent con artists from 
defrauding the system.
  Then we heard from victims such as Patricia Gresko, a former 
schoolteacher from Michigan. She testified about this unbelievable scam 
where her doctor talked her into spending thousands of dollars for 
treatments for an illness she later discovered she didn't have. These 
treatments caused her to have chest pains and forced her to endure 
intravenous infusions that took hours.
  Her doctor was arrested for bilking $225 million from Medicare. This 
is what he did: falsely telling patients they had cancer--if you can 
believe that, that they had cancer--so he could bill for expensive 
chemotherapy treatments. Ms. Gresko did not have cancer, but she had to 
endure all of that.
  Today we are losing about $60 billion to $90 billion a year in 
Medicare fraud. Just last week, Federal agents arrested 90 people--50 
of them, you guessed it, from Miami--on charges they had stolen $260 
million from the Medicare Program. Fortunately, when we passed the 
Affordable Care Act, we put in provisions--some, I might say, at my 
insistence, because of ground zero being in my State--such as 
background checks, site visits for prospective Medicare providers and 
suppliers, and another one being stronger criminal and civil penalties, 
with the authority to withhold payment in law where there is a credible 
allegation of fraud. Those are just a few of the weapons in law as a 
result of the ACA.
  This recent set of arrests of 90 people on charges of Medicare fraud 
tells us something else: We have to stop playing the game of Whac-A-
Mole with Medicare criminals in trying to stamp out the fraud one bad 
actor at a time. You know what Whac-A-Mole is. You whack this creature 
on a table, and once you have whacked it, it pops right back up. So 
naturally, we talked to Sylvia Burwell, the President's nominee for 
Secretary of HHS. She echoed that last week at her confirmation hearing 
in the Finance Committee. She stated that we need to move away from the 
pay-and-chase model--which is what has happened. You have to chase them 
down. If you catch them, they pop back up again. So we need a better 
strategy.

  While we are making strides by more aggressively pursuing this kind 
of fraud, obviously more needs to be done. That is why today Senator 
Collins and I are introducing the Stop SCAMS Act. It will require 
Medicare to verify that those wishing to bill Medicare have not owned a 
company that previously defrauded the government. It is going to also 
allow private insurers and Medicare to share information about the 
potential fraudulent operators in the system.
  The bill also anticipates problems CMS may face in the future. It 
doesn't delay the rollout of the 10 new medical codes in any way--or 
shall I say what they refer to as the ICD-10 medical codes; there are a 
lot more of those medical codes--but it takes some lessons learned from 
the costly delays that have occurred with these codes and uses them to 
make the process better in the future. The legislation also requires, 
for the new medical coding systems after the ICD-10, that the agency 
assess the impact on fraud-prevention systems and do appropriate 
testing.
  Combating this fraud will continue to be one of the core missions of 
our Committee on Aging. We have taken a look at many types of fraud 
scams--Jamaican phone scams, identity theft, Social Security fraud, 
payday lending--and now we are continuing to focus on Medicare fraud 
and will continue to examine additional issues.
  Every day, Senator Collins and I hear from seniors about scams, and 
they let us know on our committee's hotline. I remind everybody: This 
hotline is there for you to report these scams--1-855-303-9470--and we 
are going to keep this committee going after these scams.
  In the meantime, Senator Collins and I hope our colleagues will join 
us in support of this legislation to try to further clamp down on 
Medicare fraud. I am so happy to have the partner I have in helping 
lead the Committee on Aging, Senator Collins.
  In closing, I would say that we really have a broad array of folks 
supporting us on this legislation: the National Health Care Anti-Fraud 
Association, America's Health Insurance Plans, Blue Cross and Blue 
Shield Association, the National Coalition Against Insurance Fraud, the 
National Insurance Crime Bureau, and Humana Insurance Company. They are 
all supporters of this legislation.
  Mr. President, I await the comments of my colleague.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. COLLINS. Mr. President, I am delighted to join my friend, the 
chairman of the Senate Committee on Aging, Senator Nelson, in 
introducing legislation to help combat fraud in the Medicare Program. 
We are introducing the Stop Schemes and Crimes Against Medicare and 
Seniors Act, or the Stop SCAMS Act.
  As Senator Nelson has described, at our hearings earlier this year we 
heard absolutely appalling testimony from a woman who had to endure 
painful, 7-hour-long series of infusions for a disease she did not have 
just because her doctor was bilking the Medicare Program.
  Imagine a physician who would do that, who would subject a vulnerable 
patient to the anxiety of thinking she had a disease she did not have 
and then treat her for a disease she did not have just to collect 
Medicare dollars. It really was appalling.
  For decades the Government Accountability Office--GAO--has identified 
Medicare as being at high risk for improper payments, abuse, and fraud. 
In the year 2012 Medicare reported that it had lost more than $44 
billion in improper payments due to waste, fraud, abuse, and 
mismanagement--and that estimate may well be too low. Think what we 
could do with $44 billion to improve the quality of health care and the 
coverage we are providing to our seniors or to reduce our unsustainable 
national debt. This is simply unacceptable.
  The loss of these funds not only compromises the financial integrity 
and increases the costs of the Medicare Program, but it also undermines 
our ability to provide needed health care services to the more than 54 
million older and disabled Americans who depend on this vital program.
  Back in the late 1990s when I was chairman of the Permanent 
Subcommittee on Investigations, we held a series of hearings to examine 
fraud in

[[Page S3191]]

the Medicare Program. We identified the dangerous trend of an 
increasing number of completely bogus providers entering the system 
with the sole and explicit purpose of robbing it. One of our witnesses 
actually testified that he went into Medicare fraud because it was 
easier and safer than dealing in drugs; he could make a lot more money 
at far less risk of being caught.
  Our hearings led to the adoption of some safeguards and better 
internal controls. But many years later what our continuing hearings 
have demonstrated is that unscrupulous individuals are always adopting 
and seeking out new ways to rip off the system. They seem to be always 
one step ahead of the authorities.
  I do wish to emphasize an extremely important point; that is, the 
vast majority of medical professionals are caring, dedicated health 
care providers whose top priority is the welfare of their patients.
  When we were investigating Medicare fraud in the late 1990s, what we 
found were a whole lot of individuals posing as health care providers 
who had no medical training whatsoever. I remember one memorable case 
where, had there been a site visit, it would have been discovered that 
this bogus provider had an office in the middle of the runway of the 
Miami airport. But, unfortunately, back then there were no site visits.
  Health care providers--the true professionals--are the ones who are 
most appalled by the unscrupulous bandits who take advantage of 
weaknesses in the Medicare Program to bleed billions of dollars from 
the program.
  As I indicated, we have made some progress over the years in the 
battle against Medicare fraud since I chaired those hearings. 
Unfortunately, however, there is no line item in the budget titled 
``waste, fraud, and abuse'' that we can simply strike to eliminate this 
problem and solve it once and for all.
  The task of ferreting out wasteful and fraudulent spending is made 
all the more difficult by the ingenuity of the scam artists, who 
continually adopt new methods of ripping off both the Medicare and the 
Medicaid Programs.
  It is clear, as my distinguished chairman indicated, that we must do 
more than shift from a pay-and-chase strategy to combat Medicare fraud 
to one that prevents the harm from ever occurring in the first place. 
That is what the bipartisan bill we are introducing today would do.
  Among other provisions, our legislation would require Medicare to 
verify health care provider ownership interests using other databases 
before new health care providers are allowed to enroll in the program. 
That is an upfront control that we can and should implement. Currently, 
Medicare relies on self-reported information. As a consequence, 
providers who previously had an ownership interest in an organization 
that defrauded Medicare can potentially get back into the program by 
simply using different names and failing to disclose their interest in 
the previous organization or practice.
  Our legislation would also allow private insurers to share 
information about potentially fraudulent providers with Medicare and 
with each other to prevent further health care fraud.
  It would also allow the Medicare Payment Advisory Commission to make 
recommendations to us regarding fraud prevention, and our bill would 
require the Medicare Program to develop a strategy for more accurately 
and reliably estimating how many dollars are lost each year to fraud.
  As the chairman indicated, our legislation is endorsed by a wide 
variety of organizations, including the National Health Care Anti-Fraud 
Association, the Blue Cross and Blue Shield Association, Humana, 
America's Health Insurance Plans, and the Coalition Against Insurance 
Fraud.
  I urge all of my colleagues on both sides of the aisle to join us in 
cosponsoring this important bill--legislation that I believe really can 
make a difference. I hope this is a bill we can move quickly. It is a 
commonsense bill. It will save taxpayer and beneficiary dollars, and it 
will help to curb the excessive fraud, the unacceptable fraud that is 
depleting dollars from a program--the Medicare Program--that is already 
under financial strain.
  So let's move this bill. Let's send it to the House and on to the 
President for his signature as soon as possible.
  Mr. President, I again commend the Senator from Florida for his 
leadership. It has been a great pleasure to work with him on this 
important issue.

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