Legislative Update: June 2014

Legislative Update: June 2014

By Jessie Gibbons, Legislative Assistant

Since 1990, Medicare has been considered a high-risk program due to its complexity and its susceptibility to fraud, waste, and abuse. Last year alone, the program spent at least $44 billion on "improper payments". Those are payments made due to fraud, waste and abusive billings. These payments put a strain on Medicare's finances, resulting in higher taxes for all and higher premiums for beneficiaries. For this reason, Medicare fraud is a foremost concern for The Senior Citizens League (TSCL) and its members. In fact, in our most recent annual survey, nearly 90 percent of our members said they strongly favor ramping up Medicare anti-fraud efforts.

Thousands of seniors fall victim to fraudulent activities each year. Typically, Medicare fraud involves dishonest providers or others who purchase or illicitly obtain Medicare identification numbers, and then submit claims to Medicare for goods and services that were never provided. For example, last fall, one Michigan doctor submitted $35 million in false claims to Medicare for intensive treatments like chemotherapy – he intentionally misdiagnosed patients with cancer in order to justify his claims.

Perpetrators of Medicare fraud are rarely caught, and because it is so lucrative, organized crime groups have begun targeting the program. Many seniors are rightfully alarmed when they open their Medicare statements and discover that fraudulent or suspicious claims were made by someone who has stolen their Medicare number.

According to the Department of Justice (DOJ) and the Department of Health and Human Services (HHS), efforts targeting Medicare fraud are incredibly cost-effective. For every dollar that is spent fighting fraud in federal healthcare programs, $8.10 is recovered. Federal efforts to prevent fraud recovered a record-breaking $4.3 billion in taxpayer dollars in fiscal year 2013 and, in the past five years, $19.2 billion has been returned to the Medicare Trust Funds, up from $9.4 billion over the previous five-year period.

TSCL is pleased that joint efforts by DOJ and HHS have been successful thus far. However, more work remains to be done before beneficiaries can rest assured that they will no longer be the targets of criminal activity by simply enrolling in Medicare. To protect seniors and taxpayers from Medicare fraud, TSCL believes that Congress should pass the Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) Act (S. 1123 and H.R. 2305). The bill represents a bipartisan, comprehensive solution to fraud prevention that we believe would go a long way in ensuring that scarce program dollars are appropriately spent.

We are hopeful that both chambers will adopt the PRIME Act before the end of this year, and we encourage our members and supporters to contact their elected officials to request their support for it. Click here for more information about the PRIME Act.