Leahy-Backed Amendment To Combat Health Care Fraud Included In Package

Managers’ Amendment Includes Tools To Investigate And Prosecute Health Care Fraud

WASHINGTON – An amendment to combat health care fraud through improved enforcement, introduced earlier this month by Senator Patrick Leahy (D-Vt.) and Ted Kaufman (D-Del.), has been included in a final package of amendments introduced to the health reform legislation pending before the Senate.  The amendment was cosponsored by Senators Arlen Specter (D-Pa.), Herb Kohl (D-Wis.), Chuck Schumer (D-N.Y.), Amy Klobuchar (D-Minn.) and Tom Harkin (D-Iowa).

The amendment – which includes key provisions from the Health Care Fraud Enforcement Act introduced in October – will further strengthen the government’s capacity to investigate and prosecute waste, fraud and abuse in both government and private health insurance that drains between $72 and $220 billion from the system annually.

“For more than three decades, I have fought in Congress to combat fraud and protect taxpayer dollars,” said Leahy.  “This provision will provide prosecutors with needed tools for the effective investigation, prosecution, and punishment of health care fraud.  We in Congress must do our part by ensuring that, when we pass a health care reform bill, it includes all the tools and resources needed to crack down on the scourge of health care fraud. This provision is an important part of that effort.”

“As we take steps to reform our health care system and increase the number of Americans covered by health insurance, we must be proactive in combating the health care fraud and abuse that exists today,” said Kaufman. “Americans pay the costs as taxpayers, and through higher health insurance premiums. This amendment will provide needed tools for reducing those costs through effective investigation, prosecution, and punishment of health care fraud.”

The amendment makes straightforward but critical improvements to the federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering, and obstruction statutes, all of which would strengthen prosecutors’ ability to combat this particularly destructive form of fraud. These improvements include:

  • Sentencing increases:  The bill directs the Sentencing Commission to increase the guidelines for health care fraud offenses, by 20-50 percent for crimes that involve more than $1,000,000 in losses.
  • Redefining “health care fraud offense”:  The bill includes all health care crimes within the definition of “health care fraud offense,” regardless of where they are codified.  (ERISA, drug marketing, and kickback crimes are currently not included)  This change will make available to law enforcement the full range of antifraud tools, including criminal forfeiture and obstruction penalties, to combat these offenses.
  • Improving whistleblower claims: Kickbacks lead to unnecessary and risky medical care and pervert the doctor-patient relationship.  This bill clarifies that all payments made pursuant to illegal kickbacks are false for purposes of the False Claims Act.
  • Creating a common-sense mental state requirement for health care fraud offenses: Some courts have held that defendants must be aware that their conduct violates a specific provision of criminal law in order to be held accountable. This bill restores the original intent of Congress that a person is guilty of a health care offense if he knowingly does what the law forbids.

The managers’ amendment also includes a provision championed by Leahy to make a key reform to the False Claims Act.  The proposal, supported by Senators Bernie Sanders (I-Vt.) and Chuck Grassley (R-Iowa), will fix the False Claims Act’s public disclosure provision to ensure that whistleblowers are fairly and appropriately empowered to come forward to expose fraud.

Leahy, Kaufman and Grassley introduced the Fraud Enforcement and Recovery Act earlier this year.  The legislation strengthened tools and increase the resources available to federal prosecutors to find, prosecute and jail those who committed financial fraud.  The Fraud Enforcement and Recovery Act was signed into law by President Obama on May 20.

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