Unemployment Compensation Extension Act Of 2009--Motion To Proceed

Floor Speech

UNEMPLOYMENT COMPENSATION EXTENSION ACT OF 2009--MOTION TO PROCEED -- (Senate - October 28, 2009)

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Mr. CORNYN. Madam President, I wish to talk about another one of those consequential issues of our day that we have been talking about a lot lately. That is health care reform. I wish to start by asking a question of my colleagues and anyone who is within the sound of my voice, and that would be: Before we create a new government-run health care plan, why don't we fix the ones we already have? Why don't we do more to fight fraud, waste, and abuse in Medicare and Medicaid?

Of course, Medicare is a government-run plan for seniors. It is part of a commitment we made that people who have achieved a certain age will have health care available to them, and that is a commitment we need to keep. Medicaid, conversely, is for low-income individuals. It is a State-Federal Government share program. But like a new government plan could be dressed up in many different ways, kind of like a child on Halloween, like some calling a government plan a public option, or some talking about opt-outs, opt-ins, and triggers, once the mask comes off, what we are left with is plain and simply another government-run health care plan.

When I was on the floor on Monday and talking about our current government plans, Medicare and Medicaid, I pointed out the very serious fiscal problems that both of these programs have and ones that we should attend to before we go creating another government-run plan with perhaps its own set of fiscal problems.

For example, Medicare, which is health care for our seniors, has $38 trillion in unfunded liabilities and will go bankrupt in 2017 unless Congress acts sooner.

Medicaid, we know, has its own share of problems. It actually reduces access to health care. It promises access on the one hand but denies that access because of unrealistically low reimbursement rates to health care providers. So many health care providers in my State, in Texas and elsewhere, simply will not accept a Medicaid patient. What good is Medicaid, what good is Medicare, if you cannot find a physician who is willing to see you? It is not much good at all.

I agree with our colleague, Senator Landrieu of Louisiana, who has asked why don't we fix the two public options we have now instead of creating a new one. This afternoon I wish to talk about how we need to fix another problem with our government plans; that is, how we should do more to fight waste, fraud, and abuse.

I noted earlier this week that both Medicare and Medicaid combined have, by some estimates, as much as $90 billion lost in taxpayer dollars each year, stolen from the intended beneficiaries of those two important government plans.

"60 Minutes'' ran a story on this on Sunday which included the story of a former Federal judge who discovered that someone had billed the government for two artificial limbs on his behalf, even though he still has the ones God gave him when he was born. Someone is using his name and in this instance his billing number in order to defraud the American taxpayer. We ought to be doing more to stop it.

This morning in the Judiciary Committee, we discussed health care fraud. We listened to some witnesses from the Justice Department. Basically what I concluded from that hearing is there are more bad guys than there are good guys, and we are stuck with a lack of resources to deal with this. We need to change the way we approach it to prevent fraud and waste on the front end rather than on trying to chase it down on the back end.

According to the Department of Health and Human Services, $32.7 billion--$32.7 billion--of Medicaid funds were consumed last year by waste, fraud, and abuse. That is about 10 percent of Medicaid's total costs, which were $333 billion.

Medicare has similar problems. Medicare fraud may consume up to 15 to 20 percent of the $454 billion in the Medicare budget. According to Harvard Professor Malcolm Sparrow, that means the amount lost to fraud would be between $70 to $90 billion each year.

Some of the examples of waste, fraud, and abuse should be embarrassing. For example, between 2000 and 2007, more than $90 million of claims were ordered by dead doctors. According to a report of the Senate Permanent Committee on Investigations last year, some of these dead doctors have been very productive. They have been ordering Medicare benefits for up to 10 years.

This past August in Houston the FBI discovered that a doctor and his wife had defrauded health care providers of more than $31 million, one doctor and his spouse, $31 million. They claimed to have administered a number of injections and other treatments that never, in fact, occurred but they still charged the taxpayer for them and were paid because of Medicare fraud.

Defrauding the Federal Government and the Federal taxpayers through their health care programs is so lucrative that Mafia figures and other criminals are getting into the act. According to the Associated Press this month, members of a Russian-Armenian crime ring in Los Angeles were indicted for bilking Medicare of more than $20 million. A week after the FBI issued search warrants related to Medicare fraud in Miami, the body of a potential witness was found in the back seat of a car, riddled with bullets.

Violent criminals are moving into defrauding the government and the American taxpayer because the risks and rewards look better to them than, for example, the drug trade. According to this same AP story, a Medicare scammer could easily net $25,000 a day, while risking a relatively modest 10 years in prison if convicted on a single count.

A cocaine dealer, by comparison, could take weeks to make that amount, while risking life in prison. So it is a matter of incentives, risks, and rewards. Apparently, the risk of committing Medicare and Medicaid fraud is so low and so lucrative that it has continued to grow and grow and grow.

We know vulnerability in government programs also facilitates drug abuse. According to a General Accounting Office study of five States released last month, the General Accounting Office found that about 65,000 Medicaid beneficiaries in these States each visited 6 or more providers for the same type of controlled substance. Each of these 65,000 Medicaid beneficiaries visited 6 or more providers for the same type of controlled substance. These controlled substances included Valium, Ritalin, and various amphetamine derivatives. Together, these 65,000 Medicaid beneficiaries charged taxpayers $63 million to feed their habits--in just 2 years.

Sometimes providers aid and abet these drug addicts. The GAO reported that a Florida physician was sentenced to life in prison after writing multiple prescriptions for controlled substances to patients who he knew were drug abusers. Tragically, five people died as a result of the drugs this doctor prescribed.

We know there is a better way to deal with the fraud in the two public options or government-run plans that currently exist. We do not have to accept the 3- to 10-percent loss in taxpayer dollars because of fraud, waste, and abuse. That is 3 to 10 percent of the taxpayer dollars.

Let's just compare that for a second to another industry that deals with huge amounts of money and millions of transactions: the credit card industry. According to the Center for Health Transformation, the credit card industry processes more than $2 trillion in payments ever year from 700 million credit card transactions, used at millions of vendors. Yet fraud in that industry is a fraction of what exists with Federal Government programs. It is at least 100 times higher.

Then--more close to home--private health insurance companies do a much better job of fighting fraud, waste, and abuse than do government bureaucrats. I know everyone likes to bash the insurance industry, but in this area they sure beat any government plan I have seen. Fraudulent claims in the private sector are much lower. They are roughly 1.5 percent of all the claims submitted, according to a new book called ``Stop Paying the Crooks,'' edited by Jim Frogue. This is because the private sector operates with a different paradigm, a different strategy. They use a ``detect and prevent'' strategy, as opposed to the Federal Government, which will pay first and then we will chase the crooks later on. Because, as I said earlier, there are more bad guys than good guys and our efforts to combat fraud are underresourced, this "pay first and chase the crooks down'' is not working at all. We need to change that paradigm to one that more closely follows the private sector strategy of ``detect and prevent'' rather than "pay and chase.''

So why isn't the Federal Government doing a better job of fighting fraud? We heard testimony this morning, as I said, from representatives of the Department of Justice and the Department of Health and Human Services. I congratulated them, first of all, for their service to our country. They have had some modest successes with stepped-up investigations and prosecutions for health care fraud. I say ``modest'' because the volume of the problem, the enormity of the problem, dwarfs any of their successful efforts. Still, the administration--I will give them credit--is trying to get their hands around the problem.

Regarding Medicaid, for example, the inspector general of HHS released a report in August. He said the data collected by the Medicaid Statistical Information System was not timely or accurate enough to help fight fraud, waste, and abuse. Data from the Medicaid Program takes a year and a half to be publicly available, by which time the crooks will have already gotten the money and escaped, perhaps long retired in the Caribbean.

This morning, the administration told us they were going to conduct a national fraud summit. I can tell you, sometimes having a meeting is a substitute for doing something about the problem. So having a summit is fine in and of itself, but I do not have a whole lot of confidence that another meeting or summit is going to solve this problem. Instead, we need to give the Federal Government--and our law enforcement personnel, in particular--and those custodians of the Federal tax dollars better tools to be able to solve the problem.

I have offered a number of pieces of legislation designed to help fight health care fraud in Medicare and Medicaid. For example, earlier this year, I introduced something I call the STOP Act, which is called the Seniors and Taxpayers Obligation Protection Act. This legislation would give Federal agencies greater tools and authority to detect waste, fraud, and abuse before they happen. The STOP Act has bipartisan sponsors, and I believe its provisions should be a part of what we do to reform our health care system.

I had also offered an amendment to the bill in the Finance Committee that would have made sure we fixed the fraud already existing in Medicaid before we expanded the program. Specifically, my amendment would have said that Medicaid had to reduce its improper payment rate to 3.9 percent. That may sound like a lot, and it is still too high, but it is actually the average of improper payment rates across the Federal Government. So my suggestion in my amendment was, just be average. Yet my amendment was voted down largely along partisan lines.

Fraud is not the only problem we see in government health care programs, but it is one reason I am skeptical of the so-called public option or government insurance companies or government takeovers of the rest of the health care sector that they do not currently control. It is a serious problem we ought to address rather than just creating a new plan with a similar set of problems and see 3 to 10 percent of the amount of money we spend on this new program lost to crooks and other criminals.

Madam President, 61 percent of the American people, in one poll, said they believe the issues of fraud and waste in Medicare and Medicaid should be addressed before--before--we create a new government-run program. I believe we should listen to the American people. I believe we should fix the current government-run programs before we create another one.

So, Madam President, I leave with a few more questions that I think must be addressed, will be addressed over the weeks and months ahead.

First of all, we know Senator Reid, along with help from Democratic leadership, has merged the Finance Committee bill with another Senate committee bill behind closed doors and sent it to the Congressional Budget Office to be scored or a cost estimate provided. I would like to ask, why can't we see the bill? Why can't we see the bill? Why can't the American people see the bill so they can read it for themselves online and they can tell us how they will either be positively or negatively affected by the provisions in another thousand-page bill?

Secondly, I would like to ask--and I guess we will find out sooner or later, but we do not know now--how much will it cost? Will this be another trillion-dollar-plus bill?

Third, I would like to know how much this bill will raise premiums on people who already have health insurance coverage--as virtually every opinion we have heard surveying the Finance Committee bill, the HELP Committee bill, and the House committee bills has said that Federal controls on health insurance plans will actually raise premiums. So we need to know how much the Reid bill--that is going to come to the floor, that has been written behind closed doors, that we need to see posted on the Internet--we need to know how much it is going to cost. We need to know how much it is going to raise insurance premiums for people who already have health care coverage.

The next question is, How much is it going to raise taxes on the middle class? I know some people around here think you can impose taxes on insurance plans, you can impose fees on medical device providers, you can do all of this, and it will be absorbed by those entities, by those companies, when expert after expert tells us what we know, what our common sense tells us; that is, those costs will be passed down to the consumer and they will be passed down to the taxpayer to pay for them, middle-class taxpayers. How much will this bill raise taxes on the middle class?

Then I think the American people would like to know--and this was in the Finance Committee bill; we will find out, I assume, at some point whether the Reid bill does the same thing--there was roughly $ 1/2 trillion in cuts to Medicare. Yes, that is right. It is the same Medicare plan that is scheduled to go bankrupt by 2017. Yet the proposal is, let's take another half-trillion-dollar chunk out of this fiscally unsustainable program, with $38 trillion in unfunded liabilities. We are going to take that, we are going to cannibalize from that plan to create yet another government plan or a public option, as some like to say around here.

Well, I think these are all important questions, and I wish I had the answers to them. I know constituents call my office. They write me. They e-mail me. They tell me in person: We are pretty worried about what we see coming out of Washington these days--with the spending and the debt, the responsibilities we should be meeting today, ourselves, but which we are kicking down the road and going to ask our children and grandchildren to pay for.

This particular subject is one that will affect all 300 million Americans. I know they will be paying close attention, as they should, to the debate as we go forward.

Madam President, I yield the floor and suggest the absence of a quorum.

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