Statements on Introduced Bills and Joint Resolutions

Floor Speech

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By Mr. GRASSLEY:

S. 454. A bill to amend titles XVIII and XIX of the Social Security Act to prevent fraud, waste, and abuse under Medicare, Medicaid and CHIP, and for other purposes; to the Committee on Finance.

Mr. GRASSLEY. Mr. President, earlier today the Finance Committee held a hearing to discuss the serious problems of fraud in Medicare and Medicaid. Over the last 9 years, the Finance Committee has held more than 20 oversight hearings dealing with Medicare and Medicaid fraud. These hearings highlighted the flaws in how the Federal Government administers Medicare and Medicaid. They also stress the need to create disincentives for those who seek to defraud these vital programs.

Every dollar lost to Medicare or Medicaid fraud is a dollar that is not available for beneficiaries. Of course, we ought to be very cognizant of that considering the impending bankruptcy of Medicare. In 2009, the Federal Government spent $502 billion on Medicare and $379 billion on Medicaid. It is estimated that between $40 billion and $70 billion was lost to fraud that year. However, officials from the Department of Health and Human Services and the Department of Justice announced last month that their health care fraud prevention and enforcement efforts recovered $4 billion in fraud. So compare that $4 billion with the $44 billion to $70 billion, and it means we still have a very long way to go.

When it comes to public programs such as Medicare and Medicaid, it is clear the Federal Government needs to be more effective in combating waste, fraud, and abuse. The Federal Government has simply made it too easy for bad actors to steal from each of these programs. It says a lot when we hear that organized crime has moved into health care fraud because it is more lucrative than organized crime. Medicare and Medicaid also attract more criminals because the profits of fraud greatly outweigh the consequences if you get caught. Then there are those who don't even get caught.

Taxpayer dollars should only go to bona fide providers and medical suppliers. But the reimbursement system is set up so that the Federal Government pays first and asks questions later. In other words, the system is based on a program we call the pay-and-chase system.

Over the years, Congress has given the executive branch more authority to improve enforcement of fraud, waste, and abuse laws. During health care reform, Senator Baucus and I developed a bipartisan set of legislative proposals to combat fraud, waste, and abuse. Many of these proposals are in the bill I introduced in the last Congress, S. 2964, the Strengthening Program Integrity and Accountability in Health Care Act, and many were even included in the Patient Protection and Affordable Care Act. These provisions did not draw opposition from either side of the aisle.

Tackling fraud, waste, and abuse in health care is one of the areas where there is widespread agreement. But our work does not end with the passage of legislation. Congress needs to keep the pressure on Federal officials to do everything possible to prevent and stop fraud.

There is also more Congress must do in ways of reform to enhance the government's ability to fight this fraud. We need to ensure that phantom doctors, pharmacies, and durable medical equipment suppliers cannot simply bill Medicare millions of dollars in just a few months and then get out of town scot-free. Health and Human Services and the Center for Medicare and Medicaid Services need to use the tools already available to them to make sure claims are legitimate before they are paid.

But even with all of that, we must remain vigilant in our oversight efforts, which is the constitutional responsibility of the legislative branch of government, because tomorrow's criminals will find ways to get around the laws and regulations we put in place today. That is why I am introducing the Strengthening Program Integrity and Accountability in Health Care Act of 2011. This bill contains the remaining proposals from S. 2964 that are necessary to enhance the government's ability to combat Medicare and Medicaid fraud. It builds on reforms we made in the last Congress.

The bill would require the Secretary of Health and Human Services to issue regulations to make Medicare claims and payment data available to the public similar to other Federal spending disclosed through www.USAspendingÐ.gov. This Web site lists almost all Federal spending, but it doesn't include Medicare payments made to physicians. That means virtually every other government program, including even some defense spending, is more transparent, or responds to the citizens' right to know, than spending by the Medicare Program. So that differential between defense spending and most other government programs and what we allow the public to know about the Medicare tax dollars being spent is too big of a gap and one we should not tolerate anymore because a taxpayer dollar spent on Medicare isn't any different from the public's right to know about a taxpayer dollar spent on defense programs. Let's say even for this Senator, with my background in farming and participating in a family farm operation, the public can read in the newspapers of Iowa, as they can for every State, the amount of money a certain Senator--or I shouldn't say Senator--a certain farmer gets from the farm program. It is all taxpayers' dollars.

In addition, this bill also goes on to create a national clearinghouse of information so that we can better detect, prevent, and thereby deter medical identity theft. This is about the Federal Government sharing information it already has in ways that protect the taxpayer and work against those defrauding the system.

The bill would also change Federal laws that require Medicare to pay providers quickly regardless of the risks of fraud, waste, and abuse. Under current law, the government is required to make payments for what is called a clean claim within 14 to 30 days before interest accrues on the claim. That is not enough time for the limited number of Medicare auditors to determine if a claim is legitimate before a payment has to be made. The result is that this what we call prompt-payment rule requires that Medicare pay bad actors first and ask questions later, which leads to that pay-and-chase system I previously mentioned.

So this bill would add to the tools Congress provided to the executive branch last year to prevent fraudulent payment on the front end. It would extend the time payments must be made if the Secretary of Health and Human Services determines there is a likelihood of fraud, waste, and abuse.

In addition, the bill would expand the Health and Human Services inspector general's authority to exclude an individual from participating in the Federal health care program. I wish to give an example. The inspector general would be able to exclude an individual if the individual had ownership or control interests in an entity at the time the entity engaged in misconduct such as health care fraud. Now, I know that is common sense to the taxpayers of America, but it is not something the inspector general can do today.

I still have other areas my bill addresses, and one is in the area of illegal, unapproved drugs. Just last week, the Los Angeles Times reported that the Food and Drug Administration is struggling to keep unapproved drugs off the market. It reported that ``in many cases, the agency doesn't even know what the drugs are or where they are.'' This is another example of how the Federal reimbursement system creates an incentive for bad actors to get around the rules.

In this case, those rules are the Food and Drug Administration requirements for putting a drug on the market.

Medicaid pays until the Food and Drug Administration identifies a drug or class of drugs as not approved for marketing and then takes formal action.

Under such circumstances, the Federal Government doesn't even have the option to chase after the previous payments.

My bill would stop such payments, unless the State Medicaid Programs first verify with the Food and Drug Administration that the drug is being legally marketed.

Again, that may sound like common sense, but it is something that can't be done without a change in the law.

The changes I am proposing would go a long way to deter those who would defraud our health care system. It also would provide greater protections to the taxpayers.

Fighting fraud, waste, and abuse in Medicare and Medicaid is vital to the sustainability of each program. My bill will help add to the reforms we passed last year. It will fix some of the blatant problems that incentivize and reward waste, fraud, and abuse. Over 100 million Americans rely on Medicare and Medicaid for health insurance.

Right now, these programs, as we all know--every Member of the Senate knows and most of the public knows--these programs are on an unsustainable path. My bill takes necessary steps to move these programs toward sustainability.

I urge my colleagues to support this legislation and help me by cosponsoring it.

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