Congress Set to Approve $1.7B to Fight Health Care Fraud

u_s_capitol_building.jpgCongress is moving forward toward granting the Obama administration’s request for a record $1.7 billion to fight health-care fraud, in part to almost triple investigations into crime rings that steal from Medicare.
The money, included in both House and Senate versions of a fiscal 2011 spending bill for the Health and Human Services Department, amounts to a $250 million increase. Almost half of that, $116 million, would go toward expanding a program of fraud “strike forces” to 20 cities from seven.
The health care fraud strike force program has stopped fraud schemes totaling about $1.9 billion and led to charges against more than 800 people.
The amount of fraud the strike forces have deterred from happening is “far higher but nearly impossible to calculate” according to former United States Department of Justice Kirk Ogrosky, a partner at Arnold & Porter LLP in Washington, who began the strike force program in Miami in 2007.
In the strike force’s first year operating in south Florida, Ogrosky said, the Center for Medicare Services observed a $1.2 billion decrease in claims from the area for purchases of durable medical equipment, the industry targeted.
The Obama administration forecasts that a budget increase for anti-fraud programs will pay for itself and then some, bringing in $10 billion for the government over a decade.
Jay Darden, another former federal prosecutor who is now a partner at Patton Boggs LLP in Washington, said that the government should consider stepping up its law enforcement in places like Miami — a hotbed for health-care fraud — before expanding to more cities.
“I think there’s 20 cities where Medicare fraud is a problem,” Darden said in a phone interview. “I’m not sure you could say there are 20 cities where Medicare fraud is the size of the problem as it is in South Florida and L. A. and in the Southern District of Texas.”
The Southern District of Texas includes Houston and McAllen, a town that was the focus of a New Yorker story last year examining differences in Medicare spending across the U.S.
The legislation carrying the extra money for fraud-fighting is stalled in Congress due to a partisan debate over government spending. Senator Tom Harkin, the Iowa Democrat who is chairman of the appropriations subcommittee that wrote the bill, said last week that it is unlikely to become law before the end of the year. The full Senate Appropriations Committee approved the bill last week on an 18-12 vote. The additional cities weren’t identified.
The legislation is S.3686. It states in relevant part:
Healthcare Fraud and Abuse Control Account
In addition to amounts otherwise available for program integrity and program management, $561,000,000, to remain available through September 30, 2012, to be transferred from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund, as authorized by section 201(g) of the Social Security Act, of which $376,167,000 shall be for the Centers for Medicare and Medicaid Services Program Integrity Activities, including administrative costs, to conduct oversight activities for Medicare Advantage and the Medicare Prescription Drug Program authorized in title XVIII of the Social Security Act and for activities listed in section 1893 of such Act and for Medicaid and Children’s Health Insurance Program (‘CHIP’) program integrity activities; of which $94,830,000 shall be for the Department of Health and Human Services Office of Inspector General to carry out fraud and abuse activities authorized by section 1817(k)(3) of such Act; and of which $90,003,000 shall be for the Department of Justice to carry out fraud and abuse activities authorized by section 1817(k)(3) of such Act: Provided, That the report required by section 1817(k)(5) of the Social Security Act for fiscal year 2011 shall include measures of the operational efficiency and impact on fraud, waste, and abuse in the Medicare, Medicaid, and CHIP programs for the funds provided by this appropriation.
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