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Stop Medicare Fraud Summit

Los Angeles, CA
August 26, 2010

Thank you, I am delighted to join CMS Deputy Administrator Budetti and US Attorney Birotte in welcoming everyone here this morning -- along with my partner in this very important effort, Attorney General Holder.

I also want to thank President Jamillah Moore and everybody with Los Angeles City College who opened their doors to us and made today’s event possible.

Last May, President Obama asked Attorney General Holder and me to lead a new effort to stamp out health care fraud, protect taxpayer dollars, and kick criminals out of our health care system.

Together, we created a new Health Care Fraud Prevention and Action Task Force, which we call HEAT -- an unprecedented partnership bringing together Cabinet-level leaders from both departments to share information and coordinate strategy.

And that partnership is already paying off: Last year, returns to the Medicare trust fund from anti-fraud efforts were up almost 30 percent from the year before.

But with our annual health care spending rising from $75 billion in 1970 to more than $2.5 trillion today, our health care system is a bigger target than ever for criminals. And in the fight against fraud, we need all the help we can get.

That’s why over the last year, we’ve built new partnerships across our health care system.

We’re working with patients to protect their information and their health. We’re working with providers to strengthen screening standards. We’re working with private insurers to trade strategies about how to prevent fraud.

We’re training seniors to spot potential scam artists and alert the authorities. And we’re partnering with law enforcement to share resources, use new data, and break down old walls between jurisdictions.

This past January, we hosted the first ever National Health Care Fraud Summit in Washington – bringing together government, law enforcement, providers and private insurance companies to share their best strategies and develop new fraud prevention tools.

But we also knew that if we really wanted these strategies to take root, we had to look beyond the beltway and listen to the people on the frontlines.

So we set out to host a series of regional health care fraud summits. In July, we went to South Florida. Today marks the second summit, and it could not come at a more important moment.

At a time when so many families are scraping together every last dollar to pay their medical bills -- in a region beset by serious budget woes and soaring prices -- abuses like fraud and waste in our health care system are simply unacceptable.

This morning, I visited with Dr. Anne Peters, a local physician who had her identity stolen by a team of criminals operating a massive fraud scheme.

Dr. Peters was simply doing what she loved, treating her patients and providing care to those in need. But a group of scam artists stole her name as well as her provider number and began using it to bill Medicare for services – services she wasn’t providing.

We ended the operation by using an undercover informant and new tools to track the money. By the time we shut the operation down, we found they had tried to launder as much as $4.7 million dollars under 19 different doctors’ names.

Today, nearly all of that money has been recovered.

And when we caught the perpetrators, we didn’t just find boxes of fraudulent medical records. We also found a stockpile of dangerous weapons including assault rifles, submachine guns, and brass knuckles.

We caught this scheme thanks to old-fashioned detective work.

And over the last year, we’ve made a serious commitment to get even more boots on the ground. We’ve more than tripled the number of Medicare fraud strike force teams from two to seven. We’re expanding the program that enlists Medicare beneficiaries in fighting fraud, known as the Senior Medicare Patrol. And we’re adding an extra $350 million over the next ten years to expand our anti-fraud efforts.

More manpower is absolutely critical. But it’s not enough. If we really want to take this fight to the criminals, we need smarter tools and better information to track them down, and tougher penalties once we catch them.

That’s why earlier this year we created a new center for Program Integrity at the Centers for Medicare and Medicaid Services led by Peter Budetti.

In March, we gave him some help when Congress passed and the president signed the Affordable Care Act -- one of the strongest health care anti-fraud bills in American history.

Under the new law we’ve begun to strengthen the screenings for health care providers who want to participate in Medicaid or Medicare.

And I am proud to announce that CMS is issuing a final rule strengthening enrollment standards for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

This rule and others coming soon mean that only appropriately qualified suppliers will be enrolled in the program. The days when you could just hang a shingle over a desk and start submitting claims are over. No more power-driven wheelchairs for marathon runners.

Under the new law, we’re also making it easier for law enforcement officials to see health care claims data from around the country in one place, combining all Medicare-paid claims into a single, searchable database. And we’re getting smarter about analyzing those claims in real time to flag potential scams.

It is what credit card companies have been doing for decades: If 10 flat screen TV’s are suddenly charged to my card in one day, they know something’s not quite right. So they put a hold on payment and call me right away.

We should be able to take the same approach when one provider submits ten times as many claims for oxygen equipment as a similar operation just down the road.

It’s about spotting fraud early before it escalates and the cost grows.

As we step up our efforts to stamp out fraud, we’re holding ourselves accountable. The President has made a commitment to cut improper Medicare payments in half by 2012.

At their very core, all of these efforts are about meeting our special obligation to safeguard Medicare. Seniors have worked hard to earn their health benefits, and they deserve to know that we’re doing everything possible to protect them.

Today we are hosting events across the Los Angeles area to highlight the work all of you are doing to fight fraud. We want the public – and Medicare beneficiaries – to know they have an important role to play. To stay wary and watchful, to ask questions, and keep track of their medical bills and payments.

We recently ran a series of radio spots in LA, warning people to be on the alert. We know these criminals target those most vulnerable populations, which is why we ran ads in several languages including Spanish, Korean and Armenian.

And later today, I’ll share that same message when I meet with seniors at the Jewish Family Service Freda Mohr Senior Center -- along with a representative of the Senior Medicare Patrol.

Health care fraud has been around for too many years. In the past, we seemed to accept that with any big enterprise, there was going to be some waste and fraud.

Those days are over. The changes we’ve made over the last year and a half mean that from the perspective of a potential criminal: it’s a lot harder and riskier to submit false claims; if you do, you’re more likely to get caught; and when you get caught, you’re going to pay the price.

So thank you again for being here. I look forward to seeing what ideas come out of your discussions. And I look forward to continuing this conversation as we work to free our health care system of waste and fraud. Thank you.

I’d now like to introduce a great defender of the American people and our partner in fighting health care fraud, Attorney General Eric Holder. Attorney General Holder…