October 30,2009

Press Contact:

Jill Kozeny, 202/224-1308

Jill Gerber, 202/22-6522

Grassley Intends to Carefully Monitor New HHS Commitment to Focus More Intently on Health Care Fraud

WASHINGTON – Sen. Chuck Grassley today said he welcomed a commitment from the secretary of Health and Human Services to respond more quickly to fraud alerts involving federal health care programs, a commitment that came after Grassley wrote a detailed letter outlining the agency’s failure to respond to fraud reports.

“The secretary committed to respond to these fraud alerts within 60 days,” Grassley said. “It shouldn’t have taken congressional scrutiny to get HHS’ attention to handle these alerts responsibly. I don’t doubt Secretary Sebelius’ intent to fix the problem, but given HHS’ track record, I plan to carefully monitor the agency’s responsiveness under this new timeline.”

A month ago, Grassley wrote to Health and Human Services Secretary Kathleen Sebelius, expressing concern that the agency, through its division, the Centers for Medicare and Medicaid Services, either ignores or responds slowly to fraud alerts called Management Implication Reports, issued by the agency’s inspector general. The inadequate response is of concern because of the prevalence of fraud in Medicare and Medicaid. A “60 Minutes” story last Sunday reported that Medicare fraud is an estimated $60 billion a year, and that federal heath fraud is so pervasive in south Florida that it has exceeded the illegal drug trade as a high-dollar crime there.

In his letter to the secretary, Grassley said when the government “is hemorrhaging money in its federal health programs, and when those programs are facing staggering budgetary shortfalls in the coming years, it shocks the conscience to hear that CMS is ignoring these alerts of fraud.” He added that in addition to the unrecoverable losses to the taxpayer, “this inactivity by CMS only emboldens those that would steal from the American people through defrauding the federal health programs.”

Responding to Grassley’s letter, Sebelius acknowledged that some reports are outstanding and committed to meeting Grassley’s requested timeline of 60 days to respond to all future Management Implication Reports. She also said “CMS is instituting a new process for tracking and responding” to the reports. Some of the pending reports are three years old.

The text of Grassley’s letter follows here. The text of the Sebelius response is posted with this news release at http://grassley.senate.gov and http://finance.senate.gov.

Grassley is ranking member of the Committee on Finance, which is responsible for Medicare legislation and oversight. Amendments he authored in 1986 to the federal False Claims Act have resulted in the federal Treasury recovering $21 billion that would otherwise have been lost to fraud. The vast majority of that recovery has come from settlements of cases involving charges of Medicare fraud.