Lawmakers Target Medicare and Medicaid Fraud - WSJ.com

Lawmakers Target Medicare and Medicaid Fraud - WSJ.com

WASHINGTON -- The federal government needs to further step up efforts to fight Medicare and Medicaid fraud to generate more savings to help pay for a health-care overhaul, lawmakers said Wednesday.

"The scale of health care fraud in America today is staggering," Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.) said at a hearing. "Now, 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."

Health-overhaul legislation moving through Congress contains provisions to beef up the government's antifraud effort. The U.S. loses at least $60 billion to health-care fraud every year, and some estimates put the cost as high as 10% of the nation's total health-care spending, which exceeds $2 trillion. Medicare, the federal insurance program for the elderly and disabled, and Medicaid, the federal-state program for the poor, are especially susceptible. The government has announced a series of indictments on Medicare and Medicaid fraud in the past two years, including indictments earlier this week involving a Mississippi medical clinic.

Sen. John Cornyn (R., Texas) said government officials still need to figure out why Medicare and Medicaid have a higher rate of fraud than private insurers, especially since Congress is considering creating a public-insurance program. "I'm sure we'll never have enough good guys to outnumber the bad guys in this area." Mr. Cornyn said, asking Health and Human Services and Justice Department officials: "What can you do to reduce it?"

Bill Corr, deputy HHS secretary, said HHS and the Justice Department are making progress, especially by using specialized teams to ferret out fraud. But he agreed that the task is huge. Medicare alone, he testified, receives 4.4 million claims each day, which have to be paid between 14 and 30 days.

The Medicare program, which spends more than $400 billion a year, reviews only 3% of those claims, he said. Medicare has reported that it improperly paid more than $10 billion in claims in the fiscal year that ended Sept. 30, 2008.

Mr. Corr reminded the senators that the administration has requested $311 million to tackle health-care fraud in the current fiscal year, or $113 million more than last year.

Investigations by the HHS inspector general's office led to collections of $4 billion in fiscal 2009, up from $3.2 billion in fiscal 2008, he said. The agencies, he said, have also focused South Florida, Los Angeles and other areas where fraud is prevalent. Claims for medical-equipment, a perennial favorite for scam artists, dropped by 63%, or $1.75 billion, in South Florida alone from March 2007 and February 2008, Mr. Corr testified.

Assistant Attorney General Tony West said the Justice Department has focused on misconduct by pharmaceutical companies and device makers. Last month, the department reached a $2.3 billion settlement with Pfizer Inc. over its promotion of certain drugs, the largest health-care fraud settlement for the department. In January, Eli Lilly & Co. settled with the department for $1.4 billion over the marketing of anti-psychotic drug Zyprexa. ...