Sebelius, Holder: New Health Reform Law Will Help Prevent Medical Fraud

Obama administration officials, touting $2.5 billion recovered from Medicare overpayments and fraud, immediately turned to talk of how health reform could ensure bigger successes in the future.

At a news conference Thursday, Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder said the new law provides more than $350 million during the next 10 years to fight fraud. Some of the money will be used to hire new personnel to scrutinize Medicare and Medicaid advisers, and identify and investigate schemes. Those caught would face tougher sentences than they do now.

“There’s never been a worse time to try and steal Americans’ health dollars,” Sebelius said. “The days when you could just hang out a shingle and start submitting claims are over.” Sebelius said that doctors, equipment suppliers and other medical providers will soon face fingerprinting, site visits and criminal background checks before they can start billing Medicare, Medicaid or the Children’s Health Insurance Program. A new integrated data-sharing system will allow the Department of Justice to work more closely with HHS. Part of the effort includes urging consumers to be on the lookout for scams, such as people who offer “free” medical equipment and then ask for a Medicare number.

Attorney General Holder said that more than 1,000 new health fraud investigations were started last year, with 800 indictments and almost 600 convictions. Holder also said that Health Care Fraud Prevention and Enforcement Action Teams in six states have also been successful in combating fraud. The HEAT teams investigate and make arrests in South Florida, New York, Texas, California, Louisiana and Michigan.

The money that was returned to the Medicare Trust Fund was a 29 percent increase over the previous fiscal year, when just under $2 billion was returned. In addition to that money, more than $441 million in federal Medicaid money was returned to the Treasury Department, a 28 percent increase from last fiscal year.

“For years, we tolerated health care fraud” as part of the waste that comes inherent with such a large system, Sebelius said, adding that the government pays $1 billion a day in claims to providers. “But those days are coming to an end.”

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