Coburn Introduces Legislation to Stop Medicare and Medicaid Fraud

Published September 30, 2010


Sen. Tom Coburn, a Republican from Oklahoma and a physician, has introduced new legislation targeting the multibillion-dollar challenge of Medicare and Medicaid fraud. The bill, the “Fighting Fraud and Abuse to Save Taxpayers’ Dollars” or “FAST” Act, was also introduced in the House, by Rep. Peter Roskam (R-IL).

“This act does several things to target fraud. One of the biggest problems we face is providers and suppliers who are banned in one state but then just jump to another,” Coburn told Health Care News. “We’re going to give the Secretary the ability share information to a greater degree, so we can track and identify providers and suppliers excluded from participation.”

Both members attended the White House health summit in the spring, where Coburn directly questioned President Barack Obama on a lack of innovation in combating fraud.

Increased Reporting, Penalties

With President Obama’s health care law slated to spend $2.6 trillion in additional taxpayer dollars over the coming decade, Coburn believes waste and fraud will only increase in the absence of increased information sharing and enforcement. Coburn says the current bureaucratic system at the Centers for Medicare and Medicaid Services lacks the secure data-sharing capability needed to prevent the rising level of fraud.

“I think most of the staffers at CMS aren’t happy they’re paying out $80-100 billion a year in fraudulent payments,” Coburn said. “[The FAST Act] is designed to set up new reporting, screening, and information-sharing requirements to put a stop to this practice.”

Coburn’s legislation includes several key antifraud proposals, which he says can make a significant difference in preventing fraud. The bill increases requirements for Medicare Administrative Contractors, calls for a pilot program using universal product numbers on Medicare claim forms, bolsters penalties for illegally distributing beneficiary identification, and prevents providers convicted of fraud from discharging their debts by going into bankruptcy.

“We also require that Social Security numbers no longer be embedded on a senior’s Medicare card,” Coburn said. “Today, if you steal a Medicare card, you’ve got the Social Security number too—it’s ripe for identity theft. This is the sort of thing that’s made Medicare fraud so easy.”

Hopes to Lower Fraud Percentage

Coburn points out that although the private sector has fraud too, it’s much closer to 1 percent of total payments; the fraud rate for Medicare and Medicaid is nearly 20 percent. He says his aim is for government payments to approach that smaller number.

“If we can get closer to 2-3 percent, even down to 1 percent, it’ll be a huge difference,” Coburn said. “Yes, it’s a financial benefit that approaches the trillion dollar mark over a decade, but it’s also important that we stop paying crooks with the taxpayers’ money.”

Devon Herrick, a health policy expert at the National Center for Policy Analysis in Dallas, Texas, says the success of Coburn’s proposal will depend on whether other members of Congress are willing to stand up on the issue.

“Sen. Coburn has some great ideas, but Congress has to develop the political will to follow through with them,” Herrick said. “In the past, one of the biggest impediments to fighting waste, fraud, and abuse in Medicare and Medicaid is when politicians intervene on the behalf of constituents who are abusive service providers and equipment suppliers.”

‘Spurious’ White House Claims

Coburn emphasizes that fraud should not be a partisan issue.

“This isn’t about Republican or Democrat,” Coburn said. “No one wants to allow criminals to get away with robbing taxpayers.”

The White House, however, has tried to make the case that fraud would increase if, as Coburn and his Republican allies hope, the president’s health care law is repealed. CMS director Donald Berwick has proposed a rule which would subject healthcare providers to some new screening measures as a way of combatting fraud—prompting White House assistant Stephanie Cutter to claim defunding or repealing Obama’s law “would effectively handicap implementation and enforcement of these new rules that would help crack down on criminals and protect seniors.”

Coburn pronounces that claim “spurious.” He maintains Congress can roll back the broader law while still acting to restrict fraud.

“Repealing this bad law doesn’t repeal rules,” Coburn said. “But those are the kind of claims you have to make when you’re trying to defend something which has already been such an obvious failure.”

Big Cost Hike Expected

While the White House had claimed cost savings from ending waste and fraud would pay for the entitlement expansion in Obama’s law, the Congressional Budget Office recently concluded cracking down on such improper payments would save only $6.7 billion dollars over the next decade.

“The quality of health care in America is good. It just costs too much, and the American people have already learned this approach isn’t a solution,” Coburn said.

An annual study from Hewitt Associates released on September 26 forecast the cost of premiums and out-of-pocket expenses would rise by more than 12 percent in 2011.

“There was an opportunity here with, so many Americans paying attention, to actually fix our health care payment system, to make it one with consumer-directed payment instead of government and third party payment,” Coburn said. “Instead, President Obama wanted to cover more people without solving the cost problem.”

Benjamin Domenech ([email protected]) is managing editor of Health Care News.