Grassley Fights Fraud in Medicare and Medicaid

Press Release

Senator Chuck Grassley today introduced legislation to build on key reforms to fight fraud in Medicare and Medicaid. The measure comes the day of a Senate Finance Committee hearing exploring ways to fight health care fraud.

"These are huge programs with billions of dollars going out in fraud each year," Grassley said. "The bad actors are getting bigger and bolder all the time. They're able to stay out of law enforcement's reach too often. It says a lot when you hear organized crime has gotten into health care fraud because it's so profitable. It's time to try new things. Stopping bad payments before they go out instead of trying to collect them after the fact is common sense. More transparency about billing and payments increases public understanding of where tax dollars go. The bad actors might be dissuaded if they knew their actions were subject to the light of day. Congress should act quickly to pass the reforms out of respect for taxpayers and on behalf of program beneficiaries."

Grassley said his bill includes provisions that would:

* limit tax dollars lost to fraud by giving the government more time to pay Medicare providers when fraud, waste and abuse are suspected than is allowed under the existing pay-and-chase model;

* enhance coordination among federal agencies responsible for fighting medical identity theft, in which thieves use personal and health insurance information to bill for medical treatment and prescription drugs fraudulently;

* stop payments for illegal, unapproved drugs;

* beef up enforcement capabilities by expanding the range of individuals subject to penalties; and

* require Medicare claims and payment data to be available to the public by provider name for the first time, similar to other federal spending disclosed on www.USAspending.gov.

Grassley said the Strengthening Program Integrity and Accountability in Health Care Act of 2011 is comprised of reforms with bipartisan support. Grassley led the development of a number of fraud-fighting provisions during the bipartisan work in the Senate in the last Congress on comprehensive health care legislation. Some of the items were enacted, but others were not and are included in Grassley's new bill. He also introduced the Medicare payment reform measure in the last Congress.

The federal government spent $502 billion on Medicare and $379 billion on Medicaid in fiscal year 2009. It is estimated between $40 billion and $70 billion was lost to fraud that year.

The federal False Claims Act is one of the most effective tools against health care fraud. Grassley authored a major update of this law, in 1986, with Rep. Howard Berman of California. Since then, the law has recovered more than $28 billion and deterred billions of dollars in additional fraud against the taxpayers. The whistleblower provisions that were created by the 1986 update are among the most successful elements of the False Claims Act. This year, the False Claims Act brought in $3 billion in recoveries, with $2.5 billion from health care fraud cases, and nearly $2.4 billion of the recoveries thanks to the qui tam whistleblower provisions.

Grassley also is working to ensure that the civil recovery of public dollars that otherwise would be lost to fraud is buttressed by a robust criminal prosecution. At the end of last year, he asked the Attorney General and the Secretary of Health and Human Services to account for the falling number of criminal prosecutions. He also intends to introduce legislation this year to require the Attorney General to report details of False Claims Act settlements to Congress. "It's a matter of accountability," Grassley said.

Grassley is Ranking Member of the Judiciary Committee, with jurisdiction over the Justice Department and federal False Claims Act matters. He is a senior member and former Chairman and Ranking Member of the Finance Committee, with jurisdiction over federal health care programs.

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