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Senior Medicare Patrol National Conference

August 9, 2011
Washington, DC

Remarks as prepared for delivery

Thank you for that kind introduction, Peter, and for your tireless leadership in our fight to keep criminals out of our health care system.

I also want to thank Cindy Padilla as well as Assistant Secretary Kathy Greenlee for their terrific leadership.

And most of all, I want thank all of you for the outstanding work you do to protect Medicare every day.

Today, nearly 48 million people rely on Medicare for the medical treatments and prescription drugs they need to get healthy and stay healthy.

My father helped pass Medicare as a member of Congress, and that’s one of his proudest accomplishments. Now he is one of millions of satisfied beneficiaries.

It’s easy to forget that before Medicare was enacted in 1965, half of our seniors had no insurance and private insurance companies had little interest in selling them coverage. Countless seniors in this country were at risk of bankruptcy if they got sick or injured.

Today, 46 years later, virtually every American over the age of 65 is covered by Medicare. And millions of Americans with disabilities are also insured, getting the care they need to remain at home and live productive lives.

Creating Medicare was a historic achievement. But we can’t take it for granted.

The Medicare we have today is the product of constant updating and improvement over the years. And today, that important work must go on.

That has been our focus in the Obama Administration from day one.

We started by making immediate improvements to Medicare’s benefits under the Affordable Care Act.

Starting this year, beneficiaries in the prescription drug coverage gap known as the donut hole get a 50% discount on covered brand name drugs. By 2020, the donut hole will be closed. And seniors can also now get an annual wellness exam and key preventive screenings without co-pays or deductibles.

But we also know that with more than 9,000 baby boomers turning 65 every day and the cost of health care skyrocketing, the Medicare we know today won’t be there for us tomorrow, unless we do something to stabilize costs.

That’s why the Affordable Care Act also includes transformative reforms that reward the highest quality care that gets the best results.

For example, we’re working with more than 5,000 partners including more than 2,400 hospitals, to reduce preventable injuries in hospitals and cut unnecessary hospital readmissions.

Achieving our goals could save as many as 60,000 lives and $50 billion for Medicare over ten years.

Steps like these strengthen Medicare and protect its future by improving the care it provides and lowering costs.

But we know that one of the most effective and direct steps we can take to improve Medicare’s long-term health is ridding the program of waste, fraud, and abuse.

And for the last 14 years, the Senior Medicare Patrol has been on the front lines of that fight.

No one feels more strongly about keeping criminals out of Medicare than seniors themselves. When someone defrauds Medicare, it means higher premiums and copays for beneficiaries.

It also threatens the program that they have worked so hard for – and that they want to make sure is there for their children and grandchildren.

That’s why more than 4.1 million beneficiaries have taken advantage of the Senior Medicare Patrol’s one-on-one counseling or group education sessions. It’s why your community outreach events have reached almost 25 million people.

And we know this work pays off.

This spring, for example, a senior resident of an affordable housing development in Chicago received a series of unsolicited phone calls from Perpetual Home Health – a company she had never contacted and never dealt with before.

Then a representative from Perpetual came to her home, knocked on her door and persuaded her to complete and sign a form disclosing her social security number and listing all of her medications.

Almost immediately after the encounter, she realized she shouldn’t have done what she did. She called a local senior services facility which connected her to the Illinois SMP.

They flagged her account for the local Medicare program integrity contractor and reported the incident to the recently established Chicago Medicare Strike Force, which includes members of our HHS Inspector General’s Office as well as the FBI.

It turned out those phone calls and intimidating visits were just the tip of the iceberg.

The man behind Perpetual Home Health, John Gabriel Jr. had no formal medical training or license to practice. He is alleged to have swindled at least $20 million from Medicare over five years, submitting false claims for services that were medically unnecessary or never even provided.

Some of the profits went to bribe physicians, pay kickbacks, and keep the scheme going. He spent millions more gambling at casinos and buying fancy cars, jewelry, and property.

And this summer, he was indicted.

Thanks, in part, to the actions of a cautious citizen who knew to reach out and speak up when something wasn’t right, we may have ended a scheme that could have drained tens of millions more dollars from Medicare’s coffers.

That’s the power of the work you do. But your work is most effective when it is part of a broader effort not just to prosecute health care fraud but also, to prevent it.

Peter just described some of the steps we’ve taken over the last 2 years to put new tools in the hands of our CMS fraud fighters and law enforcement agents.

But let me take a moment to tell you how we hope the health care system is beginning to change in the eyes of a would-be criminal looking for easy money.

First, we're paying closer attention to who enrolls as a Medicare provider in the first place.

There’s now a rigorous third-party review process where they make sure you have the correct licenses. The days when you could just hang a shingle and start billing Medicare are over.

And once providers are in our system they will undergo periodic revalidation and constant oversight.

Second, if you do commit fraud, the chances that you’re going to get caught are far greater.

Starting last month, we now have, for the first time, an integrated view of fee-for-service Medicare claims nationwide, giving investigators both the ability to see billing patterns in real time and the technology to analyze those patterns.

In other words, we have the critical head start we need to identify potentially fraudulent claims, and take action.

The approach we’re using is similar to the tools that banks and insurance companies use to raise the alarm if they see a dozen flat-screen televisions charged to your card in one day.

And it’s about time we put that technology to use when it comes to protecting our health care system.

Finally, if criminals do get caught, they’re going to pay the price.

When you commit Medicare or Medicaid fraud, you’re stealing from every US taxpayer and you should be punished accordingly, which is why the Affordable Care Act increased fraud penalties.

The Affordable Care Act has given us a new toolkit to take on fraud.

But at the end of the day, we never forget that no law or technology is as effective at preventing fraud as educated and informed consumers.

Later today, you’ll hear about how some tips helped take down a scheme in Miami.

The investigation ultimately led to a judgment of $3.8 million and a recovery of $1.6 million. One defendant was sentenced to 3 years in prison and 3 years probation.

Those tips likely would never have been made without the extensive outreach and educational efforts of the Florida Senior Medicare Patrol – the same outreach and educational work that so many of you do every day.

Preventing fraud takes a lot of time, preparation and hard work. And I know that it’s people like you who bear a heavy part of that load – without always seeing the most direct or obvious rewards.

Sometimes your efforts result in a big takedown, but more often than not, you are preventing fraud before it ever takes place. That can be a hard thing to measure, but the benefits for Medicare are enormous.

Over the last 50 years Medicare has been one of our country’s greatest success stories.

We have a responsibility to keep Medicare strong for seniors today and tomorrow. And we can’t do that without those of you in this room.

Larry Bauer is one of the Senior Medicare Patrol volunteers being honored tomorrow. I met Larry during a trip to Chicago where I got to watch him in action leading a training session.

Larry put it this way: “We are the best defense against fraud because we know what care we receive and what claims are being made on our behalf. Nobody else knows. It is our duty to spend a little time to make sure it is right.”

Over the last 14 years, the Senior Medicare Patrol has become an essential player on our fraud fighting team.

In the months and years ahead, we will continue to rely on your passion and dedication to protect Medicare for this generation and generations to come.

Thank you all.