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Philadelphia Fraud Prevention Summit

June 17, 2011
Philadelphia, PA

Remarks as prepared for delivery

Thank you Attorney General Holder. It has been a real pleasure to work with you and your team at the Justice Department in this terrific partnership to protect our health care system and the American taxpayer.

I also want to thank Don Berwick for his leadership at the Centers for Medicare and Medicaid Services and the rest of our tireless fraud prevention leadership team for their tenacity.

Thank you as well to President Gerbino and all of our hosts at the University of the Sciences in Philadelphia for opening their doors and helping to make today’s meeting possible.

I also want to thank all of our panelists for leading today’s discussions.

It is good to be in Philadelphia, a town long known for its strong support for innovative care, research, and discovery -- and home to so many great institutions like this one, training our next generation of health care leaders.

Today, we are counting on all of you to be leaders in our fight against health care fraud.

And as we do, we have a great new set of tools to turn to. Over the last 15, months, the health care law has been covered from many angles. But one fact that hasn’t been reported much is that this is one of the toughest anti-fraud laws in American history.

Attorney General Holder told you about some of the remarkable progress we have made tracking down criminals and kicking them out of our health care system. The numbers are impressive thanks to new focus, new resources, and new communication.

We have more than quadrupled the number of anti-fraud Strike Force teams operating in fraud hot spots around the country from two to nine, bringing hundreds of convictions against criminals who had billed Medicare for hundreds of millions of dollars.

Since Attorney General Holder and I first announced our HEAT collaboration those strike forces have charged over 670 defendants with seeking to defraud Medicare of more than $1.3 billion taxpayer dollars.

But prosecuting fraud will not eliminate it.

We know that in order to stop health care fraud we also have to develop new methods and technologies to stay ahead of criminals and identify their patterns of behavior early.

That’s why we’ve launched an ambitious national effort to block criminals at every step of the fraud process – from making it harder for corrupt or phony providers to bill Medicare or Medicaid to partnering with law enforcement to find suspicious patterns indicating fraud.

A decade ago, bringing down a fraud scheme usually started with a tip from an informant. That’s still a useful antifraud tool – in fact, we’re making better use than ever of the many tips that come in to our 1-800-MEDICARE hotline.

But with more than four and a half million claims being paid out every working day from Medicare alone, we can’t afford to sit around and wait for tips to come in.

We need to be more proactive. The old model just isn’t nimble enough to stay ahead of criminals and schemes that have gotten more sophisticated and more savvy with every new day.

So we’re turning to state-of-the-art analytic technology to help predict and identify fraudulent claims as soon as they are submitted, so we can stop payments before they’re out the door.

These are the same type of predictive modeling tools that banks and insurance companies use to identify potential fraud. They are how your credit card company can raise the alarm if they see a dozen flat-screen televisions charged to your card in one day.

And we know that putting them to use in health care can pay off as well.

In one pilot program, CMS and its partners investigated a group of high-risk providers after linking together publicly available data – like existing court records, address information, medical licenses, and lists of providers and suppliers who have been excluded from Medicare and Medicaid.

What we uncovered was a sophisticated scheme involving multiple companies that were supposed to have opened at the very same location on the very same day, using provider numbers from physicians in other states.

When we dug deeper, the data revealed several suspect providers at the heart of the scheme – some had already been under investigation for other crimes and now, the rest are being investigated too.

It used to be the case that no single investigator or agency could see more than just a small piece of the whole picture at any one time.

But our recent experience has shown that bringing a wide range of information together in one place can provide a much fuller and clearer perspective of any criminal enterprise even as it’s just beginning to operate.

Today, we are ready to take an even more comprehensive approach nationwide.

I am proud to announce that CMS has awarded a contract to Northrop Grumman in partnership with National Government Services and Verizon’s Federal Network Systems to apply industry-leading technology to our health care fraud prevention efforts.

On July 1st, for the first time, CMS will have an integrated view of fee-for-service Medicare claims nationwide, providing our investigators both the ability to see billing patterns in real time and the technology to analyze those patterns.

It’s the critical head start they need to identify potentially fraudulent claims, investigate, and take action.

This is an historic moment in Medicare’s fight against fraud. Instead of playing the old pay-and-chase game, we now have tools to stop improper claims before they’re paid. Fewer bad payments means fewer chases -- and a powerful new message to would-be fraudsters that they will no longer find it easy to steal from Medicare.

When a group of criminals creates a false front or sets up shop in a local clinic to submit fraudulent claims, they intend to blend in with thousands of other legitimate providers helping people in need.

In the past, they could do this far too easily because our system wasn’t focused on distinguishing the fake from the genuine article. This made Medicare a ripe target and a lot of bad actors slipped through cracks.

Today’s contract represents the greatest scrutiny ever applied to Medicare’s payments. Suddenly, it’s a lot harder for the rotten apple to blend in with the bunch.

To be sure, we recognize no one group, agency, or business “owns” all of the resources to expand our information sources.

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. Already, more than 4.1 million beneficiaries have taken advantage of the program’s one-on-one or group counseling sessions. And its community outreach events have reached almost 25 million people.

Next month, we are hosting events across Philadelphia, reaching out to seniors in Asian and Hispanic communities in particular, to highlight the work that everyone can do to help fight fraud.

We continue to work closely with providers who have a critical role to play in making sure their colleagues are trained and prepared to meet their legal and ethical responsibilities.

And today’s Summit is also an important opportunity to build partnerships between public and private, stakeholders who are invested in our fight against health care fraud. We have already begun to develop the relationships that can form the foundation for long-term cooperation.

I was recently reminded that this great town was home to our nation’s very first hospital – proposed in 1750 by Dr. Thomas Bond to quote “care for the sick-poor and insane who were wandering the streets of Philadelphia.”

The need was there. But when Dr. Bond brought the idea to the Pennsylvania Assembly, there were some who felt the investment wasn’t worth it.

That’s when Ben Franklin came up with a plan to prove the public’s strong support for the new hospital. If Franklin could raise 2000 pounds from private citizens, the Assembly should match the funds.

Thinking there was no way Franklin could raise that much money, the Assembly went along with the proposal.

Of course, they were wrong. He raised more than enough. The Assembly relented. The Pennsylvania Hospital was founded in 1751. And on its official seal they chose to inscribe these words: "Take care of him and I will repay thee.”

We all have a stake in protecting the future of our health care system. The investment we make together to keep it strong today, will come back to us all many times over in the days and years to come.

Thank you.