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Amendment to Protect Americans from Health Care Fraud Included in Final Package

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Location: Washington, DC

An amendment to combat health care fraud through improved enforcement, introduced earlier this month by Senators Ted Kaufman (D-DE), Patrick Leahy (D-VT), Arlen Specter (D-PA), Herb Kohl (D-WI), Chuck Schumer (D-NY), Amy Klobuchar (D-MN) and Tom Harkin (D-IA), was announced Saturday as part of the final package of amendments expected to be included in the Senate health care reform bill.

The amendment -- which includes key provisions from the Health Care Fraud Enforcement Act introduced in October -- would further strengthen the government's capacity to investigate and prosecute waste, fraud and abuse in both government and private health insurance that drains between $72 and $220 billion from the system annually.

"As we take steps to reform our health care system and increase the number of Americans covered by health insurance, we must be proactive in combating the health care fraud and abuse that exists today," said Sen. Kaufman. "Americans pay the costs as taxpayers, and through higher health insurance premiums. This amendment will provide needed tools for reducing those costs through effective investigation, prosecution, and punishment of health care fraud."

"For more than three decades, I have fought in Congress to combat fraud and protect taxpayer dollars," said Sen. Leahy. "This provision will provide prosecutors with needed tools for the effective investigation, prosecution, and punishment of health care fraud. We in Congress must do our part by ensuring that, when we pass a health care reform bill, it includes all the tools and resources needed to crack down on the scourge of health care fraud. This provision is an important part of that effort."

"It is vital that the health care bill include provisions to address fraud and waste," said Sen. Specter. "Increasing the government's ability to manage this type of abuse will greatly strengthen this legislation, and I am a proud cosponsor of Senator Kaufman's measure to increase penalties for health care fraudsters."

"This provision will give the Department of Justice better tools to fight costly health care fraud. As we look to reform the health system, it is imperative that every dollar is spent wisely," said Sen. Kohl.

"As a former prosecutor, I saw firsthand how crooks cheated the health care system and stole money that should have been used to provide care for those who need it most -- our seniors and most vulnerable citizens," said Sen. Klobuchar. "This legislation can save taxpayer dollars as well as the valuable time and resources of our law enforcement officials."

The amendment makes straightforward but critical improvements to the federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering, and obstruction statutes, all of which would strengthen prosecutors' ability to combat this particularly destructive form of fraud. These improvements include:

o Sentencing increases: The bill directs the Sentencing Commission to increase the guidelines for health care fraud offenses, by 20-50% for crimes that involve more than $1,000,000 in losses.

o Redefining "health care fraud offense": The bill includes all health care crimes within the definition of "health care fraud offense," regardless of where they are codified. (ERISA, drug marketing, and kickback crimes are currently not included) This change will make available to law enforcement the full range of antifraud tools, including criminal forfeiture and obstruction penalties, to combat these offenses.

o Improving whistleblower claims: Kickbacks lead to unnecessary and risky medical care and pervert the doctor-patient relationship. This bill clarifies that all payments made pursuant to illegal kickbacks are false for purposes of the False Claims Act.

o Creating a common-sense mental state requirement for health care fraud offenses: Some courts have held that defendants must be aware that their conduct violates a specific provision of criminal law in order to be held accountable. This bill restores the original intent of Congress that a person is guilty of a health care offense if he knowingly does what the law forbids.

In the wake of the financial crisis earlier this year, Sen. Kaufman introduced similar legislation to strengthen tools and increase resources available to federal prosecutors to find, prosecute and jail those who committed financial fraud. The Fraud Enforcement and Recovery Act, introduced with Sens. Leahy and Chuck Grassley (R-IA), was signed into law <http://kaufman.senate.gov/press/press_releases/release/?id=a1179231-5189-4791-8cbb-1d943d8ab8f3 by President Obama on May 20.


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