Excerpt from Issues Relating to All-Payer Fraud and Abuse: Hearing Before the Subcommittee on Health of the Committee on Ways and Means, House of Representatives, One Hundred Third Congress, First Session, March 8, 1993

The Honorable Pete Stark (D., Calif.), Chairman, Subcommittee on Health, Committee on Ways and Means, U.S. House of Representatives, announced today that the Subcommittee will hold a hearing on health care fraud, waste, and abuse.

This hearing will be held on Monday, March 8, 1993, beginning at 2:00 p.m., in B-318 Rayburn House Office Building.

In announcing this hearing. Chairman Star)c said, "Billions of dollars each year are being drained from our health care system through fraud and abuse. We must ensure that all possible efforts are made to eliminate these massive rip-offs by unethical doctors, laboratories, and others providers."

Oral testimony will be heard from invited witnesses only. However, any individuals or organization may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.

Background:

President Clinton has focused national attention on the problem of controlling the rising costs of health care. Health care costs have escalated to more than$900 billion this year. According to a recent report by the General Accounting Office (GAO), as much as 10 percent of health care costs, or$90 billion, is lost each year because of health care fraud and abuse.

According to the Gad, efforts to detect and prosecute health insurance improprieties are meeting with limited success. Recently the GAO released a report that examined the rolling lab scheme in California. This report found that over the past 10 years, the scheme resulted in $1 billion of fraudulent claims to public and private insurers.

The Office of the Inspector General (IG) of the Department of Health and Human Services is responsible for overseeing health care fraud and abuse within the Department, including Medicare. The IG estimates that for every one dollar invested in fraud detection $72 are realized in savings.

Earlier this year, the Bush Administration commissioned an "action team" to examine the problem of health care fraud and abuse. This team identified the need for legislation in several areas.

Legislation to be introduced by Chairman Star)c and Congressman Levin, prior to this hearing, would establish a national health care fraud and abuse program, provide for civil monetary penalties and criminal penalties to all payers (public and private), provide intermediate sanctions on Medicare-qualified Health Maintenance Organizations (HMOS) for violations of Medicare contracting requirements, and increase funding for the IG.

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