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[Peter Budetti] I'm deputy administrator for Program Integrity
of the Centers for Medicare/Medicaid Services.
And I am delighted to welcome you.
We have a terrific program planned all day starting
with some major presentations this morning and then three
panels later on.
Before we begin, I would like to express our gratitude
to our gracious host, Dr. Jamillah Moore,
the president of Los Angeles City College and David Ambroz,
the executive director of the LACC Foundation.
And I'd like to have you join me in greeting Dr. Moore
for some brief welcoming remarks.
Dr. Moore?
[applause]
[Jamillah Moore] Thank you.
Hello, welcome to Los Angeles City College.
I'm Dr. Moore, president of the campus.
We would like to say a special thank you
on behalf of the faculty, students and staff
to Secretary Sebelius and Attorney General Eric Holder
for bringing this important summit not only to the
Los Angeles Community, but to Los Angeles City College.
Your success in fraud prevention will mean for us that many more
health care dollars remain in our communities.
We'd like to thank you for the hard work that you're doing
and wish you much success in your summit today.
And thank you for coming out to Los Angeles City College.
[applause]
[Peter Budetti] I'd very much like to also express my thanks to the
many people who have worked so hard to make the
summit possible.
This includes our colleagues at the Department of Justice,
at the Department of Health and Human Services, the Office
of the Inspector General and the Administration on Aging.
And final thank you to all of you for joining with us and
to all of those who are in our live webcast audience
on HHS.gov.
You're here today because we share this important agenda
and we recognize the need to move very, very firmly and
definitively in fighting fraud against the health care system.
It's now my distinct privilege to introduce to you for our
opening remarks the United States Attorney for the
Central District of California, the Honorable Andre Birotte, Jr.
If you'll join me in welcoming the Honorable Andre Birotte.
[applause]
[Andre Birotte, Jr.] Good morning, everyone.
I'm honored and privileged to be here as the United States
attorney for the Central District based here
in Los Angeles.
It's my pleasure to welcome all of you to the Los Angeles
Health Care Fraud Prevention Summit.
I thank you for participating in today's summit and thank you
for your leadership in helping to combat health care fraud
in the Central District of California.
We are certainly particularly honored today to have both
Health and Human Services Secretary Sebelius and
my boss, the Attorney General Eric Holder, for being here.
I personally wanted to thank them for their commitment that
they've already demonstrated in battling health care fraud
and their ongoing commitment through the Health Care Fraud
Prevention Enforcement Action Team, also known as HEAT,
to continue to fight the devastating effects
of health care fraud on patients, providers,
businesses, and insurance companies.
Their presence here today, along with all of you,
reflect a recognition of the scope of the health care
fraud problem here in Southern California,
and, at the same time, a commitment to continue
the efforts to address this problem.
As leaders in the fight against health care fraud, all of you
know that the Los Angeles metropolitan area is
a national epicenter for health fraud.
Our district has the largest population of any district in
the country with approximately 19 million people.
California has the largest Medicare and Medicaid
populations in the country with 4.3 million people
and 10.6 million people respectively.
And crooks who want to defraud the health care system prey
on this large population, particularly the large elderly
and immigrant populations within this district.
As United States Attorney, I am committed to working
with our federal, state, and local law enforcement partners
to root out health care fraud at all levels, from the streets
of skid row all the way up to corporate board rooms.
To that end, our office has criminally prosecuted hospitals
that have paid illegal kickbacks to marketers who recruited
homeless Medicare and Medi-Cal beneficiaries for unnecessary
inpatient admissions.
And we have taken action to see large civil penalties against
the hospitals who over-billed Medicare for a variety
of services.
In addition, we've criminally prosecuted the owners of seven
home health care agencies that collected approximately 25 --
oh, I'm sorry -- $125 million in false Medicare billings.
And we have prosecuted the doctors involved in those
fraud cases as well.
Now we are fortunate to have a Medicare Fraud Strike Force
that's very active here in this district.
We work in partnership with the FBI, Health and Human Services,
OIG, IRS, Cal DOJ, to take down these hardcore fraudsters who
operate crooked clinics, fraudulent labs,
and Medicare supply companies.
We will certainly continue to pursue these types of criminal
cases against those who commit health care fraud.
Now, in addition to our criminal cases, we coordinate those
criminal remedies with civil and administrative enforcement
to maximize our deterrent effect.
On the civil side, my office has obtained more than
$1.1 billion in recovery over the last five years.
And we continue to file civil cases to recover amounts
taken from Medicare by fraud.
In fact, our office just settled a civil lawsuit
against a hospital where that hospital agreed to pay
$5.25 million to the United States for
their fraudulent activities.
Make no mistake about it; I am committed to continuing these
great efforts, increasing them as a part of HEAT.
And we have some wonderful resources in the
law enforcement community: law enforcement,
health care providers, private insurance providers,
and senior advocates.
Working together under the auspices of HEAT,
we can marshal these resources to reduce health care costs,
improve the quality of care by continuing our fight against
health care fraud.
Again, welcome and thank you for participating
in today's summit.
I look forward to listening and learning from you in today's
discussion and the ideas that you all can provide.
I will turn this back over to Dr. Budetti.
Thank you.
[applause]
[Peter Budetti] It's a sign of the importance that President Obama places
on the fight against fraud, against Medicare and Medicaid,
that he has designated two Cabinet-level officials
to take on this fight and to work together in partnership.
If you will now join me in welcoming the secretary
of the United States Department of Health and Human Services,
the Honorable Kathleen Sebelius, and the attorney general of the
United States of America, the Honorable Eric Holder.
[applause]
[Kathleen Sebelius] Thank you.
Well good morning, everybody.
I'm really delighted to join CMS administrator,
Peter Budetti, the U.S. Attorney Andre Birotte, Jr., and welcome
everyone here this morning.
I'm here along with a great partner and good friend
on fighting fraud, Attorney General Eric Holder.
I want to thank President Moore and everybody at Los Angeles
City College for opening their doors to us today and making
today's event possible.
And they're doing it on a difficult day because
I was just told all the faculty is here on a flex day,
so they've actually cleared some space for us.
Last May, President Obama asked Attorney General Holder and me
to lead a new effort to stamp out health care fraud,
protect taxpayer dollars, and kick criminals out
of our health care system.
So, together we've created a new health care fraud
prevention and action task force, which we call HEAT,
an unprecedented partnership bringing together Cabinet-level
leaders from both our departments to share
information and coordinate strategies.
And that partnership is already paying off.
Last year, returns to the Medicare trust fund from
anti-fraud efforts were up almost 30 percent from
the year before.
But with our annual health care spending rising from just
$75 million in 1970 to more than $2.5 trillion today, our health
care system presents a much bigger target than ever
for criminals.
And in the fight against fraud, we need all the help we can get.
And that's why over the last year, we've built
new partnerships across the health care system.
We're working with patients to protect their information
and their health.
We're working with providers to strengthen screening standards,
working with private insurers to trade strategies about how
to prevent fraud, and training seniors to spot potential scam
artists and alert the authorities.
We're partnering with law enforcement to share resources,
use new data, and break down old walls between
our jurisdictions.
This past January, we hosted the first-ever National
Health Care Fraud Summit in Washington, bringing together
law enforcement, government, providers, and private
insurance companies to share their best strategies
and develop new fraud prevention tools.
But we knew if we really wanted those strategies to take root
we needed to look beyond the beltway and listen
to people on the front lines.
So we've scheduled a series of regional health care
fraud summits.
In July, Attorney General and I went to South Florida.
Today we're here in LA at the second summit.
And it couldn't come at a more important moment.
We're at a time where so many families are scraping together
every last dollar to pay their medical bills, and we're here
in a region that has serious budget woes and soaring prices.
So abuses like fraud and waste on our health care system
are simply unacceptable.
Now, this morning, I visited with Dr. Ann Peters, a provider
you'll hear from later in the program.
Dr. Peters is a local physician and internal medicine doc
who had her identity stolen by a team of criminals operating
a massive fraud scheme.
Now Dr. Peters was just doing what she loved to do,
treating her patients and providing care to those in need.
But a group of scam artists stole her name and her
Medicare provider number and began to bill Medicare
for services -- services she wasn't providing to patients
she never saw.
Now that fraud was ended using an undercover informant
and new tools to track the money.
But by the time we shut the operation down, we found
that they had already laundered as much as $4.7 million
under 19 different provider names.
Today nearly all of that money has been recovered.
And when we caught those perpetrators, we just
didn't find boxes of fraudulent medical records.
We also found a stockpile of dangerous weapons, including
assault rifles, submachine guns, and brass knuckles.
We caught this scheme thanks to old-fashioned detective work
and great agents on the ground.
Now over the last year, we've made a serious commitment to
get even more boots on the ground.
We've more than tripled the number of Medicare strike
forces, from two to seven.
We're expanding the program to enlist Medicare beneficiaries
in fighting fraud.
We have an army, known as the Senior Medical Patrol,
training volunteers.
And we're adding $350 million over the next years
in new resources to expand our fraud efforts.
So more manpower is absolutely critical, but it's not enough.
We really want to take this fight to the criminals.
So we need smarter tools and better information to track
them down and tougher penalties once we catch them.
And it's why earlier this year we created a new Center
for Program Integrity at CMS, lead by Peter Budetti.
In March, the president gave him some extra tools when
Congress passed and the President's signed into
law the Affordable Care Act, which is one of the strongest
health care anti-fraud bills in American history.
Under the new law, we've begun to strengthen the screenings
for health care providers who want to participate
in Medicaid or Medicare.
And I'm pleased to announce that CMS is issuing a final
rule strengthening enrollment standards for suppliers
of durable medical equipment, prosthetics, orthotics,
and supplies.
This rule and others coming soon mean that only appropriately
qualified suppliers will be allowed to enroll
in the program.
The days when you could just hang a shingle out over a desk
and start submitting claims are over.
No more power-driven wheelchairs for marathon runners.
Under our new law, we're making it easier for law enforcement
officials to see health care claims data from around
the country in one place, combining all Medicare-paid
claims into a single searchable database.
And we're getting smarter about analyzing those claims
in real time to flag potential scams.
Now this is a technique that credit card companies have
been using for years.
If 10 flat-screen TVs are suddenly charged to my
credit card, they'll know that something isn't right.
So they put a hold on the payment and call me right away.
Now we should be able to take that same approach when one
provider submits 10 times as many claims for oxygen
equipment as a similar provider just blocks down the street.
It's about spotting fraud early before it escalates
and the cost grows.
So as we step up our efforts to stamp out fraud,
we're going to hold ourselves accountable.
The president has made a commitment that we'll cut
improper Medicaid payments in half by 2012.
Now, not all of these improper payments are fraud, but we need
to make sure that every single taxpayer dollar is spent wisely.
And we'll work with providers to get it right.
All of these efforts are about meeting our special obligation
to Medicare.
Seniors have worked hard to earn their benefits
and they deserve to know that everything that's possible
is being done to protect them.
Today we're hosting events across Los Angeles to highlight
the work that is going on to fight fraud.
We want the public and Medicare beneficiaries to know they have
an important role to play, to stay wary and watchful,
to ask questions and keep track of their medical bills and
payments, and certainly to hold on to their Medicare numbers.
We recently ran a series of radio spots in LA,
warning people to be on the alert.
We know these criminals target the most vulnerable populations
which is why we ran the ads in several languages including
Spanish and Korean and Armenian.
And later today, I'm going to share this same message when
I meet with seniors at the Jewish Family Service --
Freda Mohr Senior Center, along with representatives
of the Senior Medicare Patrol.
So health care fraud has been growing for too many years.
In the past, it's been accepted that with any big enterprise,
there was likely to be some level of fraud and abuse.
But those days are over.
The changes we're making, over the last year and a half,
and will continue to make, mean that from the perspective
of a potential criminal, it's a lot harder and
riskier to submit false claims.
If you do, you're more likely to be caught.
And if you get caught, you're likely to pay a higher price.
So I want to thank all of you for being here -- all of you
for helping us in this anti-fraud effort.
I look forward to seeing what ideas come out of
our discussions today and continuing the conversation
as we work to free our health care system of waste and fraud.
Now I'd like to introduce my great partner, a defender
of the American people and a partner in fighting health care
fraud, the United States Attorney General Eric Holder.
[applause]
[Eric Holder] Well, thank you, good morning.
Good morning or good afternoon.
I don't know.
I can't see -- there are people in the audience, yes?
All right, I will to point out, before I get into my remarks,
Kathleen -- if I were to see on my credit card 10 flat-screen
televisions, that could have meant that I finally convinced
my wife that in fact these things were needed.
[laughter]
Probably fraud, but in my case, you have
to ask the second question.
It is a pleasure to join Secretary Sebelius,
Deputy Administrator Peter Budetti, the assistant attorney
general for the Criminal Division, Lanny Breuer --
who you'll be hearing from later on -- and United States
Attorney Andre Birotte.
And we welcome you all here today.
I want to thank each of you for your participation in today's
discussion and for your partnership in the fight
against health care fraud.
Now, looking around, I'm encouraged by the direct --
or the diversity of perspectives that are represented here.
And I'm glad the top federal and state officials,
administration leaders, federal, state, and local
law enforcement officers, health care providers, as well as area
patients, physicians, business executives, and caregivers,
have all come together for this very critical summit meeting.
Now each one of us shares the same concerns about
the devastating impacts, the devastating effects
of health care fraud.
We share the same goals of protecting potential victims,
safeguarding precious taxpayer dollars, and ensuring the
strength of our health care system.
And despite the commitment that you represent and the great
work that's being done across and beyond Los Angeles,
we can all agree that it's time to take our nationwide fight
against health care fraud to the next level.
And that's what today is really all about.
This summit is an important step forward, an opportunity
to build on what has been discussed and achieved since
Secretary Sebelius and I convened the first
National Summit on Health Care Fraud in Washington in January.
Last month we kicked off a series of regionally-focused
conversations in Miami, where we also announced the results
of the largest federal health care fraud take-down
in our nation's history.
We decided that the next regional initiative should
be here in LA, which -- I don't have to tell any of you --
unfortunately has become a hot spot for health care
fraud schemes.
Now, you all know what we're up against in communities across
this region; our health care system is essentially under
siege, exploited by criminals' intent on lining their own
pockets at the expense of the American taxpayers, patients,
and private insurers.
Here in Los Angeles, these crimes have reached crisis
proportions, driving up health care costs for everyone and also
bringing the long-term solvency of our essential Medicare
and Medicaid programs into doubt.
But we're fighting back.
We are fighting back in bold, innovative,
and coordinated ways.
Last year we brought an historic step forward in this fight.
In May of 2009, the Departments of Justice and Health and Human
Services launched the Health Care Fraud Prevention
and Enforcement Action Team, or HEAT.
Now, through HEAT we have fostered unprecedented
collaboration between our agencies and our
law enforcement partners.
We have ensured that the fight against criminal and civil
health care fraud is a Cabinet-level priority
within the Obama administration.
And we strengthen our capacity to fight health care fraud
through the enhanced use of our joint Medicare
joint strike forces.
Now this approach is working.
In fact, HEAT's impact has been recognized by President Obama,
whose 2011 budget request includes an additional
$60 million to expand our network of strike forces
to additional cities.
Now, with these new resources and our continued commitment
to collaboration, I have no doubt that we'll be able
to extend HEAT's record of achievement.
And this record is rather extraordinary.
In just the last fiscal year, we have won or negotiated
more than $1.6 billion in judgments and settlements,
returned more than $2.5 billion to the Medicare trust fund,
and opened thousands of new criminal and civil health
care fraud investigations, reached an all-time high
in number of health care fraud defendants who have been
charged, and stopped numerous large-scale fraud schemes
in their tracks.
Now we can all be encouraged in particular by what's been
accomplished here in Los Angeles.
Criminals we have brought to justice here in the last year
alone include the owners of the City of Angels Hospital
who pleaded guilty to paying illegal kickbacks to homeless
shelters as part of a scheme to defraud Medicare and Medi-Cal;
a physician in Torrance who defrauded the insurance
companies by misrepresenting cosmetic procedures as, quote,
"medically necessary"; an Orange County oncologist
who pleaded guilty to fraudulently billing
Medicare and other health care insurance companies up to
$1 million for cancer medications that were
not provided; a Santa Ana doctor who pleaded guilty to health
care fraud for giving AIDS and *** patients diluted
medications; and a ring of criminals who defrauded
Medi-Cal out of more than $4.5 million by using
unlicensed individuals to provide in-home care
to scores of disabled patients, and many of them were children.
Now these are just a few of many local schemes that have
been aggressively and permanently shut down.
And they're all proof that we can make measurable, meaningful
progress in the fight against health care fraud.
But we cannot do this alone.
We can't do this alone.
We need your help.
We need your unique insights, and we will rely on your
recommendations to help guide and enhance HEAT's
critical work.
Now despite all that's been accomplished since HEAT
was launched, health care fraud remains a very
significant problem.
At this very moment, for example, we know that
an alarming number of scam artists and criminals are
attempting to profit from misinformation about
the Affordable Health Care Act.
And that's why earlier this summer, Secretary Sebelius
and I wrote to all of the state attorneys general, urging them
to develop outreach programs to educate seniors and other
Medicare beneficiaries about how to protect themselves
and how to prevent scams.
Each of you can be a part of this and other public education
efforts as well.
Each of you can help to ensure that our hard-won health reform
achievements are not exploited.
Now, the good news is that the Affordable Care Act provides
us with new resources and includes tough new penalties
and rules to help stop and to prevent health care fraud.
We will continue to work vigorously with our law
enforcement and private sector partners to ensure that those
who engage in fraud cannot use new legislation to steal from
taxpayers, patients, seniors, and other vulnerable Americans.
We will keep industry leaders informed about emerging fraud
schemes and help institute effective compliance
and anti-fraud programs.
And we will punish offenders to the fullest extent of the law.
That is our promise.
As we work to build on the progress that's been made,
your presence here today gives me great hope about what we
can accomplish together.
I thank you all once again for joining us and for your ongoing
commitment to protecting American people and ensuring
the strength and integrity of our health care system.
And now I'd like to turn things over to an extraordinary leader
and a partner in this work, the assistant attorney
general for the Criminal Division of the Justice
Department, Lanny Breuer.
Thank you very much.
[applause]