Vice President Gore Announces New Efforts to Fight Health Care Fraud and A

      THE WHITE HOUSE

Office of the Vice President

For Immediate
Release                                              Contact:
Thursday, March 25, 1999                                           (202 )
456-7035


VICE PRESIDENT GORE ANNOUNCES NEW EFFORTS
TO FIGHT HEALTH CARE FRAUD AND ABUSE

Also Launches New National Health Care Fraud and Abuse Task Force

        Washington, DC -- Vice President Gore announced today new steps to
fight health care fraud and abuse, unveiling a legislative package that
will give the Department of Justice (DOJ) new tools to address the
billions of dollars lost to health care fraud each year.

        "While we should be proud of the billions we have saved in
combating health care fraud, waste, and abuse since 1993, but we can and
must do more," Vice President Gore said. "These new efforts that will help
ensure that programs that are critical to our nation's elderly, poor, and
disabled are not siphoned away by con artists and fly-by-night providers"

        Although improper payments have decreased by almost half since 1996
the lowest error rate since the government initiated comprehensive audits
three years -- there is still more that needs to be done. Last year, the
Federal government paid $12.6 billion in improper payments from the
Medicare Trust Fund and untold billions more on these type of payments in
Medicaid, the Federal Employee Health Benefits Program, and the CHAMPUS
program, draining resources away from programs that provide vital care to
the nationO,s elderly, poor, and disabled.

        The Vice President announced that part of the AdministrationO,s
omnibus crime bill contains a comprehensive legislative package to fight
health care fraud and abuse, providing the Department of Justice with new
authority to:

        Prosecute and punish kickback offenses against Federal health care
programs. A serious area of fraud is kickback schemes, where health care
providers unnecessarily send patients for tests or to facilities where the
provider is financially rewarded. Today, Vice President Gore will announce
a new legislative proposal providing the Attorney General with the
authority to stop criminal kickback schemes under Medicare, Medicaid, and
state health care programs while they are under investigation and create
new civil money penalties of at least $25,000 and up to $50,000 for
individuals or entities involved in these schemes. In addition, offenders
would be responsible for damages of triple the total compensation offered.
Currently, Federal prosecutors are unable to obtain injunctive relief for
criminal kickback offenses and are often forced to abandon in cases that,
although they merit government action, often do not rise to the level of
criminal charges.

        Facilitating the prosecution of health care fraud. Today, the Vice
President is announcing a new legislative proposal to eliminate the
prohibition against the free exchange of information between criminal
investigators and civil prosecutors in health care fr~ud cases and to
allow government attorneys to issue subpoenas in connection with any
criminal or civil health care fraud case. Currently, the prosecution of
health care fraud is often conducted in an inefficient manner because
criminal investigators and civil prosecutors are prohibited from
exchanging information about cases that may be related. In addition, the
Department of Justice cannot independently issue subpoenas when
investigating civil fraud cases, making it difficult to prosecute in a
timely and efficient manner.

        Prevent providers from taking advantage of Medicare by declaring
bankruptcy. Providers who have defrauded and abused Medicare often file


for bankruptcy in order to avoid paying fines or returning overpayments,
leaving Medicare strapped with the bills. This provision would prevent
individuals or corporations who declare bankruptcy from discharging those
debts associated with their health care fraud conviction.

         Provide new fraud fighting authority to the Federal Employee
Health Benefits Program. All Federal health programs except FEHBP are
provided a number of tools through the Health Insurance Portability and
Accountability Act that facilitate the investigation of health care fraud.
However,   FEHBP, which spends over $17 billion a year as the nationD,s
largest employer sponsored health insurance program, does not have the
same important tools. The Vice President is announcing a new legislative
proposal to expand the HIPAA provisions to include FEHBP, providing:
stronger sanctions for providers who have been convicted of health care
fraud, including mandatory exclusion from FEHBP; expanded anti-kickback
provisions to prevent FEHBP health care providers from receiving improper
gratuities for referrals or related services; and a lower standard of proo
f for fraudulent claims and increasing the penalty per false claim from
$2,000 to $10,000.

        Ensure that penalties for health care fraud are adequate. The Vice
President will unveil a new legislative proposal to direct the United
States Sentencing Commission to study current sentencing guidelines for
health care fraud, and if necessary, to amend them to reflect the serious
harms associated with health care fraud by December 31, 2000. Currently,
penalties for health care fraud allow for significant leniency if the
offending provider or corporation admits responsibility for the fraudulent
act, making it possible for individuals and entities convicted of d
efrauding Federal health care programs out of millions of dollars to
receive a sentence of probation with limited financial culpability.

        Mike Moore, president of the National Association of Attorneys
General (NAAG) , expressed the Association's support for the
Administration's health care fraud initiative.

        "NAAG is pleased to join its law enforcement partners at the
federal and local levels in sending a clear message to those who would
defraud the health care system," said Mike Moore. "We are closing the gaps
through you have operated and, as a result of this initiative, are
creating a seamless web of enforcement to more effectively protect our
vulnerable citizens from fraud and abuse."

        The Vice President also announced that the Department of Justice,
the Federal Bureau of Investigation, the Department of Health and Human
Services Office of the Inspector General, the National Association of
Attorneys General, the National District Attorneys Association, and the
National Association of Medicaid Fraud Control Units are forming an
unprecedented task force to develop strategies to collaborate and
investigate criminal and civil health care fraud; implement new training
programs to teach prosecutors, investigators, and other law enforcement
officials how to identify instances of health care fraud and the best way
to build a health care fraud case. The Task Force will also consider the
full range of health care fraud and abuse issues, including abuse and
neglect of individual patients in health care settings.

        The new steps the Vice President is taking today build on the
AdministrationD,s longstanding commitment to crack down on health care
fraud, waste, and abuse. Since 1993, the AdministrationD,s efforts have
saved taxpayers more than $35 billion, and health care convictions have
increased by more than 240 percent. Improper Medicare payments declined


last year to the lowest error rate since the government initiated
comprehensive audits three years ago.

        The Administration has assigned more Federal prosecutors and FBI
agents to fight heath care fraud than ever before, and in FY 1997 and 1998
-- thanks to the stable funding source created by HIPAA -- $1.2 billion
was returned to the Medicare Trust Fund. In addition, the Department of
Health and Human Services, together with the Department of Justice and the
AARP, are working together to increase Medicare beneficiary fraud and
abuse awareness. A recent outreach campaign, titled O&who Pays? You Pay08
encourages Medicare beneficiaries to review their Medicare statements and
question improper charges.

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[03/26/1999] [2]