Senate Panel Studies Options To Curb Fraud in Medicare, Medicaid
On Wednesday, the Senate Judiciary Committee examined fraud in the Medicare and Medicaid programs and questioned how to best combat it as health care reform proposals look to expand the government's role in the systems, the Wall Street Journal reports.
According to the Journal, fraud costs the U.S. about $60 billion annually, with some estimates putting the cost at 10% of the more than $2 trillion the nation spends each year on health care.
Calling the rate of health care fraud in the U.S. "staggering," Judiciary Committee Chair Patrick Leahy (D-Vt.) said that "as health care reform moves through the Senate, I want to make sure we do all we can to tackle the fraud that could undermine efforts to reduce the skyrocketing cost of health care" (Zhang, Wall Street Journal, 10/28).
Leahy and four other committee Democrats announced new legislation that would, among other things, strengthen sentencing guidelines for health care fraud and allocate $20 million more each year for fraud prosecution.
Sen. John Cornyn (R-Texas) highlighted how private insurers have lower rates of fraud than the government, with fraud accounting for 1.5% of private health insurance payouts compared with 3% to 10% of federal health care spending. He said that those statistics indicate a need to switch from a "pay and chase" model of combating fraud to a "detect and prevent" model (Reichard, CQ HealthBeat, 10/28).
Turning on the HEAT
During the hearing, HHS Deputy Secretary William Corr said that Medicare receives 4.4 million claims each day and that the program reviews only 3% of them. He added that Medicare improperly paid more than $10 billion in claims during the fiscal year that ended on Sept. 30, 2008 (Wall Street Journal, 10/28).
Corr also highlighted the Obama administration's new initiative, called the Health Care Prevention and Enforcement Action Team, or "HEAT." Corr said that HEAT is a joint effort from HHS and DOJ to "marshal our resources, expertise and authorities" to prevent fraud (CQ HealthBeat, 10/28).
Corr added that as part of the program, the government is using new data analysis and information-gathering methods to detect and find patterns of fraud in areas where it is more prevalent (AP/Boston Globe, 10/28).
The Obama administration "has been able to achieve a more rapid response to fraudulent schemes," he said, adding that investigations by HHS' Office of the Inspector General have led to collections of $4 billion in FY 2009, up from $3.2 billion in FY 2008 (CQ HealthBeat, 10/28).
Assistant Attorney General Tony West said that DOJ has focused on tackling fraud perpetrated by pharmaceutical companies and device makers.
During the hearing, Corr told the committee that the Obama administration has requested $311 million to combat fraud in the current fiscal year, $113 million more than last year (Wall Street Journal, 10/28).In addition, Corr said that the administration is considering a summit of patients, physicians, insurers, and law enforcement that could "bring fresh ideas and collaborations that we believe will result in more effective methods of preventing and detecting fraud" (AP/Boston Globe, 10/28). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.