Statements On Introduced Bills And Joint Resolutions
Floor Speech
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By Mr. GRASSLEY:
S. 2774. A bill to amend title XVIII of the Social Security Act to prevent Medicare payments being lost to fraud, waste, or abuse; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, in 2008, Medicare accounted for about $470 billion of the $2 trillion spent on health care in the U.S..
Conservative estimates are that as much as $60 billion of that Medicare spending is lost to fraud, waste, and abuse each year.
News reports today tell us that the Medicare payment error rate for fiscal year 2009 is going to be 12.4 percent. To put it in a different way, last year, Medicare made 47 billion dollars in improper payments. $47 billion of taxpayer money that by all accounts was wasted by Medicare on payments that shouldn't have been made.
As Medicare spending continues to skyrocket, so will the dollars lost to fraud, waste and abuse.
That problem is bad enough. But it is even worse because it turns out that a rule in the law today makes it easier for crooks to cheat the system and steal money from Medicare.
A recent 60 Minutes segment highlighted how the law as written contributes to the problem and drives this growing danger to the American taxpayer and public coffers.
In this segment, we saw a medical supply company that billed Medicare, $2 million this past July--despite being empty and having apparently no staff.
Federal agents described the problem as far bigger than the drug business in Miami now. They were told it has pushed aside cocaine as the biggest criminal enterprise there.
According to those interviewed by 60 Minutes, an entire health care fraud industry exists today that is committed to doing nothing except finding ways to rip off the Medicare program.
Many of these suppliers don't exist. There is no office that exists and nobody who works there. They recruit doctors and patients and use stolen patient lists, and do nothing but figure out how to steal from Medicare.
One man interviewed said he was waking up every day making $20,000-$40,000 every day. It was like winning the lottery he said. He was running a fake medical supply company that didn't actually sell any medical equipment to anyone. He says he stole at least 20 million dollars from Medicare. He said it was, quote ``real easy.''
All he says he needed was someone pretending to run the office and then he just had to check his bank account every day to see how much money he had made. All he did was fill out forms to Medicare and in 15 to 30 days he would have the money in his bank account.
Even more alarming, he says that there are about 2,000 to 3,000 more fake medical suppliers just in Miami billing Medicare fake claims.
They are able to do this because Federal law puts Medicare in a position of having to ``pay and chase'' health care fraudsters. this is because federal law requires that Medicare pay providers promptly regardless of any risk of fraud, waste, or abuse.
The prompt payment requirement in current law requires payment for a ``clean'' claim within 14 to 30 days. And that is not enough time for the limited number of Medicare auditors to determine if the claim is legitimate before the payment has to be made.
The result is that this ``prompt payment rule'' requires that Medicare pay fraudsters first, and ask questions later.
This requirement in current law doesn't make any sense. I am here today to introduce a bill to fix it.
This legislation, the Fighting Medicare Payment Fraud Act of 2009 Act, would provide the government with an important new tool to fight fraud, waste and abuse in Medicare. This bill will stop the cycle of ``paying and chasing.'' This legislation would protect Federal taxpayer dollars from being wasted on suspicious payments that are required to be made because of the prompt payment rule.
Today, the prompt payment rule applies to all payments regardless of the risk that those payments would be to fly-by-night operators. But this legislation ends the policy of pay first and ask questions later.
This legislation gives the Secretary of Health and Human Services the authority to ask questions first and then and ONLY then to make the payment if the health care provider and the payment for services check out.
This bill accomplishes that by extending the time period in which payments must be made under the prompt payment rule in cases where the Secretary determines there is a likelihood of fraud, waste or abuse.
For categories of providers or suppliers, the payment time period can be extended to up to one year. For individual providers or suppliers, the Secretary would be required to take whatever time is necessary to engage in more in-depth reviews to determine that the claims are supposed to be paid in the first place.
With this additional time, the Secretary would be required to conduct more detailed reviews of suspicious claims to make sure they are supposed to be paid.
This would help ensure that Medicare dollars are in fact going to bona fide providers, instead of fraudsters with empty strip mall medical supply companies.
Finally, this legislation requires the experts in the Office of Inspector General to recommend, on at least an annual basis, categories of providers or suppliers that warrant additional time before payments are made under the prompt payment rule.
To make sure there is action on these recommendations, the Secretary would be required to provide a response to the Inspector General on these recommendations.
With this new authority to fight health care fraud, the Federal Government will be in a better position to protect taxpayer dollars and catch health care crooks.
Crooks are taking advantage of Medicare's prompt payment requirement. They know they can bill Medicare, get their payment, and be gone before they get caught. And Federal law enables it to happen. That has got to end. This legislation takes that step.
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