"More and more career criminals are becoming involved in health care fraud. This bill responds bymaking it harder for such people to participate in Medicare in the first place, increasing our ongoingability to monitor their actions, and denying them the use of our bankruptcy laws to protect theirill-gotten gains. Every dollar recovered from an unscrupulous Medicare contractor is a dollar thatcan be used to provide health care for older Americans," Grassley said.
Among other measures, the bipartisan legislation advanced today would protect Medicare bypreventing bad actors from avoiding fines and repayment obligations by filing for bankruptcy andby establishing universal product numbers for medical equipment billed through Medicare.
Introduced by Sens. Susan Collins, Richard Durbin and Grassley, the proposal is based on the workof a Senate oversight subcommittee chaired by Collins, and it incorporates initiatives developed byGrassley as chairman of the Senate Special Committee on Aging.
In addition to its provisions targeting fraudulent conduct, the bill also addresses waste of Medicaredollars by the Medicare bureaucracy. The Medicare Fraud Prevention and Enforcement Act of 1999includes Medicare billing legislation first introduced by Grassley last year and strengthened by anindependent study he requested. The General Accounting Office found that the lack of billing codes-- known as UPNs or universal product numbers -- means the government does not know whatproducts it is paying for and pays too much for some medical equipment. For products billed undersome codes, GAO said "the Medicare fee schedule allowance was appropriate for a few of theproducts but grossly excessive for many of the products billed under the same code."
The bill introduced today also includes Grassley's legislative language to prevent health careproviders from using bankruptcy to avoid Medicare and Medicaid penalties and overpaymentrecoveries.
Current law allows a provider to assert that overpayments or civil monetary penalties due to theMedicare program are discharged and do not survive the bankruptcy proceeding. Grassley's proposalwould make a provider liable to refund overpayments and pay penalties and fines due to fraudulentacts even if he filed for bankruptcy. Any money recovered would eventually be deposited into theMedicare Trust Fund.
Grassley said the Medicare Fraud Prevention and Enforcement Act of 1999 also would:
mandate site inspections and background checks of new providers of equipment, suppliesand services;
require registration of every company that bills Medicare;
expand access to a database that contains information about health care providers;
make Medicare contractors liable for payments to providers who have been excluded fromthe Medicare program;
set new requirements for Community Mental Health Centers seeking to participate in theprogram;
make it a felony to purchase, sell or distribute a Medicare or Medicaid provider number orbeneficiary billing number;
increase the number of crimes labeled health care offenses; and,
give limited law enforcement authority to the inspector general for the Department of Healthand Human Services.
Grassley was the principal author of amendments adopted in 1986 to update the False Claims Act. The law allows any private citizen who knows about fraud to sue companies on the government'sbehalf. Originally sought to combat fraud by defense contractors, the False Claims Act has in recentyears become the government's most effective tool against health care fraud. In 1997, SmithKlineBeecham Clinical Laboratories Inc. agreed to pay the government $325 million for offering illegalkickbacks and filing false claims for lab tests. Last year, the Justice Department employed the FalseClaims Act to recover $144 million that was fraudulently collected by a Medicare contractor.