Remarks for HHS-DOJ Health Care Fraud Summit

Incoming Acting Deputy Attorney General Gary Grindler

January 28, 2010

Thank you, Bill for that kind introduction.  I want to take a moment to express our appreciation to you and your colleagues at HHS for organizing this first-of-its-kind summit, and for the leadership that you and Secretary Sebelius have shown on the issues of health care fraud prevention, detection, and enforcement.  The HEAT (Health Care Fraud Prevention and Enforcement Action Team) Initiative is a true partnership between our agencies and we at the Justice Department are fortunate to have such committed partners in this important effort. 

I also want to join Bill in welcoming all of you to this summit.  Here today, we have experts from both the public and private sectors ready to share their experiences and expertise so that we can more effectively prevent, detect, and prosecute health care fraud.  It is a privilege to be here among so many dedicated people who share the same mission of eliminating fraud in America's health care programs.  

Every year, hundreds of billions of dollars are spent to provide health care for millions of American seniors, children, and the disabled.  And each year billions of these dollars are stolen through fraudulent schemes that cheat taxpayers and contribute to the increasing cost of health care for all Americans.    We recognize that most medical and pharmaceutical providers do the right thing, and those of you participating from the private sector are here today because you recognize the need to work together to confront this the fraud and abuse that exists.  We are here today because we know we need to do more.  Not only does health care fraud harm the stability of public health care programs, it harms everyone - it drives up the cost of health care, insurance premiums, and taxes for all Americans.  By corrupting the medical decisions health care providers make with respect to their patients, health care fraudsters threaten the quality of services provided to those who need care in this country.  For all these reasons, we must be -- and we will be -- vigilant in fighting health care fraud.

It is not enough just to prosecute and punish health care fraud after it occurs.  We must target it before it happens through aggressive pre-screening, auditing, and prevention techniques.  We need to use the most effective technologies available to provide real-time access to claims data and to conduct effective data analysis so that we can detect new fraud schemes as they emerge.  And we need to leverage our civil, criminal and administrative enforcement authorities along with building effective public-private partnerships.  For those reasons, we have put together a program today that covers the full range of issues and areas for further coordination in combating health care fraud: 

• To begin, we will examine South Florida as a case study to both better understand the nature of the problem, and show what we can accomplish when we work together.  We have several participants in the Medicare Strike Force in Miami here today – the Office of Inspector General, FBI, United States Attorney’s Office, CMS and the Criminal Division – who will walk through some of the lessons learned on the front lines of this fight and discuss how we can build off their successes elsewhere. 
• Next, we will shift to the important role of the private sector in eliminating fraud -- because this is not just a federal law enforcement issue.  Each of you plays a critical role in stopping fraud -- whether through sharing best practices, timely referrals, developing effective tools to analyze claims data, or engaging in public outreach about fraud schemes.  And this summit provides an excellent opportunity to identify areas where we can help each other be more effective.     
• As Bill mentioned, later today, there will be a series of working sessions that will focus on different aspects of a coordinated strategy to prevent and prosecute health care fraud.  The participants in these sessions bring together a wide range of relevant knowledge and experiences, and I am confident that the lessons and best practices discussed will be enormously valuable as we move forward.  

I encourage you as you participate in these sessions, to focus on concrete steps that we can take to improve coordination, information-sharing, and leveraging of scare resources.  As we’ve seen time and again, the best way to be effective in protecting the integrity of our public health programs is by combining the full range of our expertise and information across agency and jurisdictional lines, and by combining the tools and knowledge from both the public and private sectors.  It was with that joint effort in mind last May that the Attorney General and the Secretary of Health and Human Services announced the formation of the HEAT Initiative to focus on ways to increase coordination, intelligence sharing, and training between the two agencies.  We have expanded the Medicare Strike Forces into five new cities across the country.  We are improving the ways we share and analyze Medicare claims data to make sure that agents, investigators, and prosecutors have real-time access to that data in a format useful for prevention and prosecution of fraud schemes.  We have focused on building our capacity for False Claims Act cases and recovering fraud proceeds for American taxpayers.

Already these expanded efforts have shown dramatic results:

• On June 24, 2009, we announced seven indictments charging 53  people with submitting more than $50 million in false bills to Medicare in  schemes involving physical, occupational, and infusion therapy.
• On July 29, 2009, 32 people were indicted in Houston for schemes to submit more than $16 million in false Medicare claims for durable medical equipment.
• In September 2009, Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. agreed to pay $2.3 billion to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products.  This is the largest health care fraud settlement in history; the largest criminal fine of any kind imposed in the U.S.; and the largest ever civil fraud settlement against a pharmaceutical company. 
• On October 21,2009, we announced indictments of another 20 defendants, most of them residing in the Los Angeles area, who were charged for allegedly participating in Medicare fraud schemes involving power wheelchairs, orthotics and hospital beds that resulted in more than $26 million in fraudulent bills to the Medicare program.
• Also in October, McAllen Hospitals agreed to pay the United States $27.5 million to settle claims that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute between 1999 and 2006, by paying illegal compensation to doctors in order to induce them to refer patients to hospitals within the group.
• In December, we  expanded Medicare Strike Force teams into three additional cities – Brooklyn, Tampa and Baton Rouge -- and announced indictments of another thirty people in Miami, Detroit, and Brooklyn for their alleged roles in schemes to submit more than $61 million in false Medicare claims.  These defendants are charged with schemes to submit claims to Medicare for products and services that were in fact medically unnecessary and oftentimes, never provided.
• And, just two weeks ago, 13 defendants were indicted in Detroit for a home health care scheme to defraud the Medicare program of more than $14.5 million.

This gathering of experts, from across an array of private insurance plans, law enforcement and health care agencies, provides a unique opportunity to develop creative and effective solutions to help stop health care fraud. The Justice Department fully supports this effort and through the HEAT initiative, we, together with the HHS, plan to do more in the coming months to improve information sharing and coordination between the government and private sectors.  

Today’s summit is an important step in that process, and I look forward to working with you on this critical initiative in the months ahead. Thank you.