MEDICARE FRAUD: President Unveils Tough Measures
The White House "is seeking a major change in federal law to require competitive bidding in" the Medicare program, an effort designed "to save billions of dollars on such items as drugs, wheelchairs and surgical services," the Los Angeles Times reports. In his Saturday radio address, President Clinton said the proposed changes "will bring down costs by allowing Medicare to purchase goods and services at a competitive price" (Rosenblatt, 1/25). The president outlined a number of steps that together could save Medicare more than $2 billion in the next five years, including: "[p]aying market prices for drugs"; "[m]aking medical equipment suppliers compete on price"; "[d]oubling the number of audits for hospitals and nursing facilities"; "[p]enalizing doctors who certify outpatient mental health and hospice benefits for patients who do not need them"; and "[p]utting Medicare at the top of the list of debtors to be repaid when fly- by-night providers go bankrupt." Clinton is expected to outline the Medicare bidding proposal in his State of the Union address tomorrow night. In addition, the proposal will be submitted with the administration's FY 1999 budget plan to Congress next month (Srinivasan, AP/San Diego Union-Tribune, 1/25).
Health and Human Services Secretary Donna Shalala underlined the need for the changes outlined by the president. "I can go down to a store and purchase something cheaper than what Medicare is paying. We ought to be behaving like the big purchaser that we are and getting the government the best prices," she said. Shalala noted that while Medicare "is the biggest single buyer of health care services," the program "is paying higher prices than corporations, which have been successful in getting discounts through their insurance companies" and HMOs (Los Angeles Times, 1/25). Shalala noted that the Medicare program's "pricing structure" pays more for goods and services because it "was designed to attract doctors and suppliers into the system." She said, "We're overpaying for almost everything because we're locked into a pricing structure" (AP/Union-Tribune, 1/25).
The Los Angeles Times reports that in addition to "doubl[ing] the number of audits for hospitals and get[ting] expanded powers to prosecute kickback schemes involving doctors and other health care providers," the administration wants "to get volume discounts from hospitals for routine surgeries." Medicare is already getting such discounts for coronary-bypass surgeries "in some markets" through a Centers of Excellence demonstration program. The president's plan also calls for a toll-free hotline that will be listed "on all statements sent to Medicare beneficiaries to enable them to report fraud." In his radio address, the president said, "We will only win the fight against fraud and abuse in the Medicare system with the help of the American people" (1/25).