HHS SECRETARY SPEECH ON MEDICARE FRAUD

FROM:  DEPARTMENT OF HEALTH AND HUMAN SERVICE
SECRETARY KATHLEEN SEBELIUS
Chicago Fraud Prevention Summit
April 4, 2012
Chicago, IL
Thank you.
As you know, the work we’re doing together here today – sharing best practices and developing new strategies – is part of a national conversation that began in January 2010 at the first Health Care Fraud Prevention Summit and has continued across the nation.
It was President Obama who asked us to come together. When he came into office, we were, frankly, falling behind. Scams were getting bigger and more sophisticated. Criminals were being more creative and going after larger sums. They were evolving, and we needed to catch up.

So over the last three years that is exactly what we’ve done.
Attorney General Holder just spoke about law enforcement’s strong commitment to stamping out fraud. More boots on the ground has meant more criminals locked up, more schemes taken down, and a stronger health care system for the rest of us.
But we're not just prosecuting fraud. We're also taking steps to prevent it.
In the past, nearly anyone could fill out a form and become a Medicare provider. In a matter of weeks, criminals could set up false clinics, enlist willing accomplices and vulnerable seniors to submit false claims and begin collecting payments. For industrious criminals, this approach was a ripe target.
But that‘s no longer the case. Over the last three years we have made our health care system dramatically less appealing to those who once had thought of stealing from Medicare and Medicaid as easy money.
Today, I want describe how this transformation took place.
To begin, it’s now a lot more difficult for bad actors to get their foot in the door.
Today, before you can become a Medicare provider, you have to go through a rigorous third-party review process that will make sure you meet all the requirements to bill Medicare.
We have a comprehensive database that allows us to systematically screen all current and prospective providers against other key sources like provider licensing and criminal records. If you get banned from one Medicaid program or Medicare, you get banned from all Medicaid programs.

And if a doctor retires, dies, or becomes ineligible, we know about it and can remove his information from our system. In the past, out-of-date and invalid provider numbers would remain on the rolls -- like a forgotten backdoor entrance allowing criminals to sneak in and start billing bogus claims. But no longer.

I am proud to announce today that we have already removed 3,000 ineligible providers from the Medicare program identified in just the first month of these new screening procedures.

But that’s just our first line of defense. We’re also working to make sure that even if criminals do find their way into the system, it’s a lot harder to get away with taxpayer dollars.
In the past, government was often two or three steps behind perpetrators, quickly paying out nearly every properly submitted claim -- then later trying to track down the bad guys after we got a tip. That meant we were often showing up after criminals had already skipped town, taking all of their fraudulent billings with them.
But new data analysis tools allow us to analyze claims in real time, taking away criminals’ head start. Instead of the old ‘pay-and-chase’ model, we’re getting proactive by using a technology similar to the one credit card companies use to identify and stop suspicious payments before they go out. So now, just as Visa can put your card on hold when it is used to buy ten flat screen TVs, we have the ability to freeze questionable payments until we can investigate.

Since this system was put in place, we have stopped, prevented, or identified $30 million in payments that should never have been made. And because the system is designed to get smarter over time, it’s only going to be more effective in the future.
We’re also making it easier for law enforcement officials from the FBI, the Inspector General Office’s and local jurisdictions to share data and access claims information as soon as they are submitted to Medicare.

Under the old system, it was as if police officers in one town weren’t talking to the officers in the next town. Now, we’re all beginning to plug into the same system in real time, so we can respond with the same speed and agility as the criminals.
This new fraud prevention system has changed the equation for any criminal. But we also know that neither law enforcement, nor federal officials are going to stop fraud alone. And no law or technology is as effective at preventing fraud as consumers who are educated and informed.

So with the support of partner organizations across the country, thousands of Senior Medicare Patrol volunteers are giving their friends and neighbors the tools to recognize, resist, and report fraud.

Millions of beneficiaries have taken advantage of the program’s one-on-one or group counseling sessions and over 25 million people have received fraud prevention information through SMP community outreach events.
And it’s clear that this kind of outreach pays off.
In 2010, a home health agency set up an office in the lobby of a Chicago-area affordable senior housing building and offered free blood pressure checks. In the process, they collected seniors’ Medicare numbers.

One of those seniors later noticed something wasn’t right when she reviewed her Medicare Summary Notice. The home health agency had billed Medicare for more than $1,400 in skilled nursing services that she believed she never received. So she contacted the Illinois SMP and they helped her file a complaint.

The complaint triggered an investigation. And the investigation uncovered far more than a single isolated incident, leading Medicare to recoup more than $62,000 in inappropriate payments. Just as importantly, it ended a scheme that, if allowed to continue, could have drained thousands if not millions more from Medicare’s coffers.

And it all started with one cautious citizen who – thanks to the outreach and education of the local Senior Medicare Patrol -- knew to speak up when something wasn’t right.
From 2010 to 2011 the number of calls to the Illinois SMP rose 64 percent and the trend has continued into 2012. And as these numbers increase, the good news is that more and more of them are coming from seniors who are already putting into practice what they have learned from their neighbors, a local presentation, or ‘Fraud Alert’ emails. When someone calls on the phone or knocks on the door asking for their Medicare number, they know to refuse, and then to report it immediately.
This also serves to remind us that no one group, agency, or business owns all of the resources or expertise we need to keep criminals out of our health care system.
Because we all have a stake in preventing health care fraud, we’re all doing our part.
For someone thinking about committing fraud, this means the health care landscape looks a lot less friendly today:

It’s harder than ever to get into the system as a bad actor. Get in and it’s harder still to submit a fraudulent claim. Find a way to submit a claim and you are more likely to get caught. And when you get caught, you’re going to face a tougher punishment.
There is no responsibility that this Administration takes more seriously than safeguarding taxpayer dollars. I am proud of how far we have come. And I look forward to working with all of you in the days and months ahead to build on that progress and protect our health care system for this generation and the next.