MEDICARE: Clinton Launches Program To Fight Fraud, Waste
President Clinton is slated to announce today a crackdown on Medicare waste, fraud and abuse that will save "at least $2.1 billion." The series of legislative initiatives would let the Health Care Financing Administration purchase drugs more cheaply, tighten restrictions on therapy reimbursements and impose requirements and penalties to prevent double-counting of Medicare patients (AP/Dallas Morning News, 12/7). The AP/Wall Street Journal reports that under Clinton's plan, HCFA will purchase Medicare-covered drugs -- typically limited to those administered by a doctor or in a hospital -- at wholesale prices. Currently, "markups for 22 drugs cost Medicare hundreds of millions of dollars annually because the program pa[ys] more than twice the average wholesale price for certain drugs" (12/7). Clinton's proposal singles out Amgen Inc.'s anemia drug, Epogen, currently reimbursed at levels "about 10% higher than the cost of the drug." The legislation would also require "private health insurers to report which Medicare beneficiaries they insure, to prevent providers from billing Medicare for claims owed by private insurers. Additionally, "HCFA would have the authority to recover twice the amount owed by insurers who allow Medicare to pay claims they owe and to impose fines for failing to report legal settlements where Medicare should have been reimbursed." Additional components of Clinton's plan include:
- Sending memorandums to Medicare contractors telling them "they are required to refer suspicious providers to the [Health and Human Services] inspector general's office"
- Awarding contracts to "fraud fighters" in order to safeguard Medicare payments
- Giving HCFA the authority "to oversee the performance of contractors ... and terminate those who perform poorly," and institute competitive bidding for hospital beds and other medical equipment" (AP/Morning News, 12/7).