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Medicare anti-fraud bill moves to Senate

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The U.S. House of Representatives has passed a bill that would strengthen Medicare anti-fraud provisions and hold corrupt executives responsible for their actions. The bill must pass the Senate before it can be signed into law by President Obama.

The bill gives Medicare officials greater power to bar companies or individuals from participating in the program if wrongdoing is proven in a court of law. Health care executives whose companies are shown to have taken part in defrauding Medicare would be banned from Medicare participation thereafter. However, the new provisions would not apply in cases in which a company agrees to pay fines in lieu of prosecution.

“Now is the time to crack down on criminals who steal from Medicare,” says Democrat Ron Klein, one of the architects of the bill. “Our seniors depend on Medicare services, and I won’t stand to see those services eroded by thieves who cheat the system.”

The bill closes two loopholes in the current system. At present, executives in charge of companies that commit fraud can jump to another company without repercussions. Federal officials do not have the power to exclude them from doing business with federal health programs as long as they have left the company by the time the guilty plea is entered or the conviction is secured. The bill would allow but not require federal officials to ban such executives.

The second measure addresses the problem of subsidiaries. Companies that take part in fraud often set up shell companies or subsidiaries in order to protect the parent company from liability. The new law would give officials the right to ban the subsidiary as well as the parent company from future dealings with the government.

Creators of the bill conferred with Office of Inspector General chief counsel Lewis Morris, who said the Affordable Care Act provides many new tools for eradicating small-scale fraud. But better rules are needed to crack down on billion-dollar corporations whose executives “hatch schemes and push them downstream for others to carry out.”

Beyond prosecuting executives, the OIG now has the power to ban them from future program participation, a very powerful deterrent. Such executives, Morris says, should “understand that they will be held personally accountable. The way we are going to change corporate culture is by focusing on individuals.”


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