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Ways and Means Panels Light a Candle Against Medicare Fraud

By Drew Armstrong, CQ Staff

March 8, 2007 – Members of the House Ways and Means Committee began probing Medicare's dark corners Thursday, seeking areas for oversight in the program's annual spending of approximately $400 billion.

At the joint hearing of the Oversight and Health subcommittees, members estimated that as much as half of the $10.8 billion in Medicare overpayments in 2006 resulted from fraud. While fraud fighters have been looking at payments to hospitals, physicians, and equipment providers for years, Democrats are eager to add oversight of the Medicare drug benefit to the mix.

But Thursday's hearing was more a lighting of the torches than a full-fledged descent into the fraud cave's darkest corners. Much of the decidedly sedate hearing seemed dedicated to letting Health Chairman Pete Stark, D-Calif., and Oversight Chairman John Lewis, D-Ga., put out feelers on a wide variety of topics, including dialysis services, medical equipment manufacturers, physician and hospital payments, and other fraud schemes.

According to Health and Human Services Inspector General Daniel R. Levinson, investigators won back an average $13 for every $1 spent on fraud-busting efforts. The largest settlements have come from cases against pharmaceutical companies, Levinson said.

Asked by Rep. Bill Pascrell Jr., D-N.J., where the committee might look more closely for fraud, U.S. Attorney R. Alexander Acosta highlighted durable medical equipment as one example.

In one type of scam, Acosta explained, a company would fraudulently obtain a Medicare provider number then collect the names and Social Security numbers of Medicare beneficiaries. Using the beneficiary information, the fraudulent company then would bill Medicare for equipment such as wheelchairs and shut down a few months later before watchdogs could catch on.

After Acosta outlined how prosecutors had made some efforts to pursue criminal cases and jail time against some offenders, Stark told the panel he might be interested in seeking tougher sentences for those convicted of fraud.

"We aren't the judiciary, but I suspect that we do have the legislative authority to change penalties," Stark said.

Clearly impressed by some of the more flagrant scams described and the large dollar amounts recovered, committee members asked the panel what resources they could provide to speed investigators' efforts.

"My focus is on doing more with what we have," Acosta said, asking if he could consult with Justice Department colleagues and get back to the committee on what resources they might need.

He'll likely get that chance. After six years out of power in the House, Democrats are eager to dust off their oversight powers with more hearings. "We'll be back," said Stark in his closing remarks.

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