July 13, 2010

Gillibrand Announces New Legislation To Reduce Fraud And Abuse In Medicare And Medicaid, Protect Health Care For Seniors, Save Taxpayers Billions

COUNTY-BY-COUNTY ESTIMATES: Medicare and Medicaid Fraud Cost NY Taxpayers Over $5 Billion Annually

Washington, DC – With fraud and improper billing in Medicare and Medicaid costing New York taxpayers billions, U.S. Senator Kirsten Gillibrand today is announcing new legislation to protect taxpayers, reduce wasteful spending, and preserve Medicare and Medicaid services for seniors and hardworking New Yorkers. The Medicare and Medicaid Fraud Enforcement and Prevention Act would toughen penalties for abusers attempting to cheat the Medicare and Medicaid systems, establish new screening procedures to prevent fraud, and save taxpayers money. Medicare and Medicaid fraud cost the U.S. economy more than $80 billion each year, and is estimated to cost New York taxpayers alone more than $5 billion each year.

“Now, more than ever, it is critical that we are protecting taxpayers, eliminating wasteful spending, and protecting Medicare and Medicaid services for seniors and hardworking citizens that need them.,” said Senator Gillibrand. “By creating more transparency and more accountability in Medicare and Medicaid, we can save taxpayer money and protect services for seniors and people who need them. Fraud and improper billing cost taxpayers billions of dollars each year.”

Senator Gillibrand added, “With simple, common sense changes, we can provide authorities with tools to crack down on fraudulent providers, issue tough penalties for anyone trying to scam the system, and establish better preventive measures to ensure the legitimacy and quality of all Medicare providers. This will lead to lead to better health services for our citizens and significant savings for taxpayers.”

Estimates based on data from the FBI show that Medicare and Medicaid fraud costs New York taxpayers more than $5 billion each year. 

CLICK HERE for county-by-county estimates of how much New York taxpayers lose each year to Medicare and Medicaid fraud.

The comprehensive health care reform bill that is now federal law included measures to reduce waste, fraud and abuse, including increased funding for the Health Care Fraud and Abuse Control Fund to fight fraud in public programs, improved screening of providers and suppliers, and more.

Senator Gillibrand’s legislation, the Medicare and Medicaid Fraud Enforcement and Prevention Act, would build on these changes by establishing the following protections for citizens and taxpayers:

Enhanced Criminal Penalties

To crack down on offenders, the Medicare and Medicaid Fraud Enforcement and Prevention Act doubles the criminal penalties for making false statements in connection with services which are paid for in whole or in part by the Federal Health Care Program and for violating the anti-kickback statute from 5 to 10 years of imprisonment and increased fines from $25,000 to $50,000.

The legislation also creates a new offense for illegally distributing a Medicare or Medicaid beneficiary ID or billing privileges, and establishes a maximum penalty of three years in prison and a fine.

Fraud Prevention

To help prevent fraud before it can occur, the legislation makes criminal background checks, finger-printing and random site visits mandatory for high-risk suppliers and providers to ensure they are legitimate businesses before they cash a single Medicare check.

The legislation also directs the Secretary of Health and Human Services (HHS) to provide access to data necessary for combating Medicare fraud for law enforcement officials.  The Secretary would consult with the U.S. Attorney General and the Inspector General at HHS to ensure that law enforcement authorities are alerted immediately upon suspicious activity.

The HHS Secretary would also be required to implement a 5-year Beneficiary Verification Pilot Program that establishes a process to verify that claims for reimbursement belong to the Medicare or Medicaid beneficiary, similar to how banks and credit card companies verify whether a large purchase was made by the cardholder or if it was stolen. HHS would contact the beneficiary to verify a medical service purchase belongs to the correct Medicare or Medicaid beneficiary. Data collected would also help keep a more accurate record of fraud.  The results from the pilot program would be presented to Congress show the prevalence of fraud and the effectiveness of these new measures for catching fraudulent activity.

Oversight Of Medicare Contractors

To improve oversight and accountability of the Medicare system, the legislation directs the Government Accountability Office (GAO) to study Medicare contractors, including Recovery Audit Contractors, and report to Congress with recommendations for legislation and administrative action, regarding the following areas: Training and expertise in identifying fraud, including the education al levels of key individuals tasked to identify or refer potential cases of fraud; and whether CMS should be providing more training to contractors or require contractors to hire experts with greater medical training.