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House Urges End to Medicaid Fraud

November 9, 1999

WASHINGTON (AP) _ Federal and state officials who fight growing Medicaid fraud were told at a House hearing today that it’s time to stop endless reviews and start solving what has been called a $17 billion problem.

``We don’t need to review it any more, we need to find a solution,″ said Rep. Richard Burr, R-N.C., after the officials testified of studies and training programs under way to identify and combat increasingly complex fraud schemes.

The officials complained about antiquated computer systems and the problem of dealing with a program that is administered separately by 50 state governments. Burr expressed doubts that fraud, waste and abuse _ pegged at $17 billion a year by Rep. Fred Upton, R-Mich. _ can be stopped without completely redesigning the medical program for the poor.

Leslie Aronovitz, director of the Chicago field office of the General Accounting Office, Congress’ investigative arm, said, ``You’re running 50 different programs. This program will always be vulnerable, in my opinion.″

Penny Thompson of the federal Health Care Financing Administration, which oversees Medicaid and Medicare, said the idea of restructuring Medicaid to end fraud is something ``we haven’t really looked into with any depth.″

States are trying to combat Medicaid fraud and waste with 20-year-old computer systems that are ``the dinosaurs of technology,″ an organization of government investigators reported.

The obsolete technology is combined with a serious shortage of state investigators, said Marc P. Fecteau, president of the National Association of Surveillance Officials. The organization is composed of state officials responsible for monitoring Medicaid for fraud, waste and abuse.

Fecteau and other witnesses testified before the House Commerce investigations subcommittee.

The chairman of the Commerce Committee, Rep. Thomas Bliley, R-Va., called the report disturbing. ``The cost of fraud and abuse may exceed $17 billion every year. Our greatest concern should relate to how this type of fraud hurts our most vulnerable citizens.″

State and federal officials said that while some progress has been made, those committing fraud are becoming more sophisticated. Medicaid scams often cross state lines, ``entailing a number of federal, state and local agencies that may have different or competing priorities in their efforts to investigate, prosecute and enforce compliance,″ said Ms. Aronovitz.

Fecteau said Congress has funded hundreds of positions for the FBI and inspector general offices to battle Medicare fraud, but the state agencies fighting wrongdoing in Medicaid haven’t received the same commitment.

``In an age where technological obsolescence is measured in days, our 20-year-old systems are definitely the dinosaurs of technology,″ he said. ``But then, as some states have reported, enhancing software technology to identify more cases without addressing proper staffing requirements simply results in more cases pending review.″

The GAO official, Ms. Aronovitz, said criminal groups have created interstate health care fraud schemes and used associates in foreign countries to transfer proceeds out of the country.

Last week the GAO reported that organized criminal groups have defrauded Medicare and Medicaid by setting up phony corporations, recruiting bogus patients and laundering money in foreign countries.

Congress has never acted on long-discussed legislation that would require closer background checks of those who apply for identification numbers to submit claims to the programs and new application fees to cover the cost.

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