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Medicare fraud crackdown to hit a dozen more states

May 20, 1997

WASHINGTON (AP) _ A two-year crackdown on Medicare fraud in five states recovered $23 for every $1 spent, prompting the Clinton administration to expand it to a dozen more states Tuesday.

``This is a model that works. Now it’s time to take what we’ve learned and use it broadly and aggressively,″ said Donna Shalala, the Health and Human Services secretary.

The anti-fraud campaign, started in 1995 and known as ``Operation Restore Trust,″ will eventually blanket all 50 states, Shalala said. Over the next two years, it will expand to Arizona, Colorado, Georgia, Louisiana, Massachusetts, Missouri, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia and Washington.

During its initial phase, federal investigators targeted fraud by home health agencies, nursing homes, medical equipment suppliers and hospices _ in California, Florida, New York, Texas, and Illinois.

For $7.9 million spent on the program so far, Shalala said, 74 criminal convictions have recovered $67.3 million for Medicare, 58 civil cases have brought in another $72.8 million in fines and settlements, and companies have returned $47.4 million for services inappropriately provided or billed.

Medicare has shut out 218 fraudulent health care providers, and investigators still are working on 210 cases.

In one case, a medical supply company based in New Jersey agreed to repay $300,000 plus investigation costs of $30,000 for charging Medicare for expensive, custom-fitted ``spinal body jackets″ that were actually little more than seat cushions provided to nursing home residents.

Medicare administrator Bruce Vladeck said cooperation between Medicare and state Medicaid offices also helped identify cases in which both the federal health program for the aging and state programs for the poor and disabled were billed.

``We have identified numerous cases where we were paying several times for the same service,″ Vladeck said.

Also, more than 13,000 consumers, health care providers, and local aging organizations have called a government-sponsored hot line to report suspicions of fraud.

Computers have been put to work on sophisticated statistical analysis to detect billing irregularities, and the FBI has been called in to help with more investigations.

Operation Restore Trust is just one part of the federal government’s efforts to crack down on health care fraud. In the broader effort, the government is looking into the patient referral and billing processes of one of the nation’s largest hospital chains, Columbia/HCA Healthcare Corp.

Also, the HHS inspector general is opening branch offices in six additional states _ Tennessee, Oklahoma, Connecticut, Ohio, Iowa and South Carolina _ and hiring nearly 200 extra staff this year, bringing its total personnel to about 1,100 in 32 states.

``We’ll have doubled our staff size by the year 2002 and we’ll have a presence in most states,″ said spokeswoman Judy Holtz.

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