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W&M Digs Deeper Into Medicare Fraud

September 28, 2016

Today the Ways and Means Oversight Subcommittee, chaired by Rep. Peter Roskam (R-IL), held a hearing focusing on the rampant fraud in the Medicare program and how the federal government identifies, investigates, and prosecutes fraud within the health care system more broadly.

Because Medicare is large and complex—providing billions of dollars in benefits to millions of Americans each year—the program is extremely vulnerable to fraud. Highlighting how widespread and damaging Medicare fraud is to all Americans, Chairman Roskam said:

“Fraud is a serious problem throughout health care, with some experts estimating that up to 10 percent of health care spending is made up of fraud. That would mean that in Medicare alone, the government is spending nearly $60 billion a year in fraudulent payments. That is a huge cost that is paid for by taxpayers. This hearing is a continuation of the Subcommittee’s work over the past two years in trying to understand the causes and solutions to this massive problem.

“One aspect of the problem is that not only are taxpayers impacted, but many fraud schemes actively harm patients … Fraudsters may bill Medicare for opioids and other prescription drugs and then sell them on the black market. Here, not only is the taxpayer footing the bill for unnecessary narcotics, this also contributes to the country’s growing opioid and painkiller epidemic.”

As United States Attorney Barbara McQuade explained:

“Every year the federal government spends hundreds of billions of dollars to provide health care to the most vulnerable members of our society. And while most medical providers are doing the right thing, some exploit Medicare and other health care programs for their own financial benefit. This fraud deprives patients of resources needed to pay for medical services and places patients at risk of harm for unnecessary treatments … Fighting health care fraud is a top priority of the Department of Justice.” 

McQuade discussed one of the most prominent cases of Medicare fraud involving Dr. Farid Fata, a cancer doctor who misdiagnosed patients—in some cases intentionally making patients sicker—just to pocket higher Medicare reimbursements. As the lead prosecutor on the case, McQuade said:

“Fata prescribed and administered unnecessary, aggressive chemotherapy, cancer treatments, and intravenous iron and other infusion therapies to patients. Some of his patients did not have cancer at all … On August 6, 2013, Fata was charged … and pleaded guilty to 13 counts of health care fraud and related charges, and in July, 2015, he was sentenced to 45 years in prison for his role in his health care fraud scheme that included administering unnecessary infusions and injections to 553 individual patients and submitting bills to Medicare and other insurance companies totaling $34 million in fraudulent claims.” 

As Abhijit Dixit—a Special Agent at the Office of Inspector General (OIG) in the Department of Health and Human Services who works closely with McQuade to prosecute Medicare cases—explained, it takes an enormous amount of collaboration between federal agencies and local law enforcement to bring these perpetrators to justice and protect patients. Describing the collaborative efforts that uncovered Dr. Fata’s fraud, he said:

“When the Department of Justice received a complaint from Dr. Fata’s office manager, OIG and our law enforcement partners acted immediately. We simultaneously began the initial phase of the investigation—determining whether the allegations were credible—and took steps to protect the potentially affected patients … We also began deploying traditional law enforcement techniques, which included conducting surveillance, interviewing key witnesses, serving subpoenas, and reviewing documents … We accomplished all of this—the initial phase of the investigation, the arrest, and the patient protection efforts—in just 5 days.” 

Dixit also explained how this collaboration led to the largest Medicare fraud bust in history:

“In June 2016, I was among approximately 350 OIG agents who partnered with more than 1,000 other law enforcement personnel to execute the largest health care fraud takedown in history. The takedown, led by the Medicare Fraud Strike Force, resulted in criminal and civil charges against 301 individuals, including 61 doctors, nurses, and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings.”

As Rep. Kenny Marchant (R-TX), whose constituents have been directly affected by a fraudulent physician, said:

“People are a little frightened that this fraud undermines a program that they depend very heavily on. And because there is so much fraud, they are not getting the reimbursement or the care they deserve because there are so many dollars going away from the program.” 

Ways and Means Republicans will keep working to prevent health care fraud and ensure Medicare and other federal programs are serving the patients truly in need, not lining the pockets of fraudulent health care providers.

CLICK HERE for more information about today’s hearing.