WASHINGTON BUREAU — A senior Republican senator is asking whether the Obama administration is making effective use of the funding allocated for health care fraud investigations.

Sen. Charles Grassley, R-Iowa, charges in a letter sent to Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius that the administration seems toGrassley be focusing on civil prosecutions at the expense of criminal prosecutions, leading to the possibility that paying civil money penalties may “simply become part of the cost of doing business for those engaged in fraud.”

A joint HHS-U.S. Department of Justice program, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), is reporting that it handled 82 criminal investigations in 2009, up from 30 in 2008, but the number of criminal health care fraud convictions has fallen, Grassley says.

Of the 803 criminal defendants charged in fiscal 2009, only 583 were convicted or plea bargained, he said, and the conviction rate has fallen to 72%, from 90%, Grassley says.

“Statistically speaking, the data [show] that despite increased cases and defendants, fewer bad guys are going to jail for ripping off Medicare and Medicaid,” Grassley says. “I want to know why the Justice Department is having a tougher time putting people behind bars when we’re giving them millions more to do the job. This raises a question of whether the focus of the HEAT initiative is redirecting resources away from overall criminal enforcement of health care laws.”

Another lawmaker, Rep. Pete Stark, D-Calif., says “several” anonymous Senate Republican blocked floor action during the recent lame-duck session on H.R.

6130, the Strengthening Medicare Anti-Fraud Measures Act.

The bill that would have closed loopholes used by executives of companies convicted of Medicare fraud to continue doing business with the agency, Stark says.

The bill had bipartisan support in the House and passed by voice vote earlier this year, Stark says.

Under current law, Stark says, executives of companies that are convicted of fraud can be excluded from Medicare.

But, if the executive has left the company by the time of conviction, he or she cannot be barred from federal health programs.

“These executives are able to move from one company to another and continue to defraud Medicare, seniors, and taxpayers,” Stark says.

H.R. 6130 would have given the Office of the Inspector General (OIG) at the Centers for Medicare and Medicaid Services the authority to ban these executives from doing business with Medicare.

Another loophole lets companies that engage in fraud to set up shell companies to insulate themselves from liability.

“Criminal settlement negotiations can result in the dissolution of these shell organizations with no real penalty to the parent company,” Stark says.

H.R. 6130 would have given the OIG the authority to exclude these parent companies from the Medicare program.