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Floor Statement: Introduction Of The Seniors And Taxpayers Obligation Protection (STOP) Act

Mr. President, “The first important rule of fraud control is: What you see is not the problem. It’s what we don’t see that really does the damage, and the efficacy of control systems depends upon how well they uncover, and then suppress, the invisible bulk of the problem.” Such are the words of the preeminent expert on health care fraud, Harvard, Kennedy School of Government Professor, Malcolm Sparrow.

Just last week, the Washington Post ran a front-page article, which I would ask to be entered into the record, “Medical Fraud a Growing Problem: Medicare Pays Most Claims Without Review”. The story detailed how one woman, defrauded the government out of $105 million using just a laptop while sitting in her Mediterranean-style townhouse.

While the lottery’s slogan is “All you need is a dollar and dream”. This woman discovered something better. Maybe Medicare should adopt the slogan “All you need is a Provider Number and a dream”.

Quite simply, Medicare is not sophisticated enough to address the fraud that runs rampant through it. Every year, Medicare’s anemic fraud controls let slip by an array of schemes that cost the Medicare program and taxpayers $60 billion, if not more. That is twenty percent of all Medicare spending.

Often, as pointed out by the Washington Post article, Medicare pays claims with little or no review as to why or where the checks are going or to whom. One phantom company, comprising nothing more than two rented mailboxes and a phone number was paid $2.1 million over a six month period. In another case, the owner of the fraudulent company was an unemployed tow truck operator who used the identities of dozens of dead patients. Again, “All you need is a Provider Number and a dream.”

Medicare fraud is not limited to one segment of the health care sector. There are numerous examples of fraud conducted by physicians, dentists, health systems, laboratories, teaching hospitals, patients, and billing specialists to name a few. While I would agree that most of these groups are operating on the straight and narrow, the truth remains that the losses associated with Medicare fraud are helping drive the program to bankruptcy.

Unfortunately, conducting Medicare fraud has such a low risk of getting caught and less severe punishment yet high reward that it has even attracted organized crime. Again, “All you need is a Provider Number and a dream.”

Usually, the only way Medicare is able to recoup a small portion of the annual $60 billion in losses is by expending more resources on investigations and law enforcement activities through the Office of Inspector General and Department of Justice. While these agencies have done a commendable job in combating fraud, to a large extent it is good money chasing bad.

Sometimes systems are set-up to fail. In this case, the Medicare fraud prevention is not only set-up to fail, it is nearly non-existent.

We need to go from “pay and chase” to “detect and prevent”. Medicare needs to be mobile and it needs to be focused on preventing criminals from ever getting paid in the first place. Medicare needs a system that will continually, as Malcolm Sparrow said: “uncover, and then suppress”.

Today, I am proud to join Senator Martinez in what I hope is the first in a line of necessary common sense solutions to this problem. The Seniors and Taxpayers Obligation Protection Act or STOP Act, will protect honest taxpayers, seniors, and providers, by strengthening the Medicare program itself.

To prevent fraud, the STOP Act employs lessons from the private sector and moves Medicare into the 21st Century. For example, Medicare may be the only program, company, or industry left in the country that still thinks it is a good idea to use social security numbers for identification. In a time where a stolen social security number is a stolen identity, Medicare has not stopped printing it on identification cards that are sent through the mail.

Even worse, when seniors report that their social security number is being used fraudulently to bill for services in Medicare that they didn’t receive, Medicare has no ability to stop paying claims on that social security number or provide the senior with a new number. Medicare has ignored the warnings of the Government Accountability Office and the pleas of groups like AARP and Consumers Union to change this practice. Passage of the STOP Act will mean Medicare can ignore it no loner.

Other provisions of the STOP Act:

• Require physicians in high-risk areas to review the claims they submitted, similar to how you or I would review our credit card statement at the end of the month to ensure there are no mistaken or fraudulent charges
• It implements prepayment fraud detection methods, such as site visits, data analysis, and integrity reviews, so that a guy with a mailbox can no longer rely on “All you need is a Supplier Number and a Dream”
• It ensures providers are billing for only those services for which they are qualified
• Tracks the usage of durable medical equipment
• Conducts a study on the implementation prospects of real-time claims analysis technology.