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REPORT SHOWS FOUR-FOLD INCREASE IN HEALTH CARE FRAUD INVESTIGATIONS WASHINGTON, D.C. -- Federal investigations of health care fraud quadrupled in the last four years, according to a report issued today by the Justice Department. The report noted that Attorney General Janet Reno designated combatting health care fraud a major initiative. Gerald Stern, Special Counsel for Health Care Fraud, said both public and private health care plans had been defrauded through false billing, kickbacks, unapproved devices and unlicensed personnel. Stern said as much as $100 billion dollars may be lost annually in fraud and abuse. In once case, patients died when a Fortune 500 company sold unapproved heart catheters. "While most health care providers are honest and care first and foremost about their patients' welfare," said Stern, "fraud is perpetrated by every kind of provider from individual physicians to multi-state publicly traded companies. We have investigated fraudulent schemes by medical equipment dealers, ambulance companies, laboratories, hospitals, nursing homes and others who prey upon the system." "The Administration's efforts to ensure that all Americans have access to quality health care at a reasonable cost will be undermined if fraud goes unaddressed," he said. The Department reported the FBI had 1,500 cases under investigation in the fiscal year that ended last October, compared with 1,051 the year before, 657 in FY 92 and 365 in FY 91. Two hundred anf forty one defendants were charged with crimes last year. One hundred and forty defendants were convicted in cases that reached conclusion during the year. The report described frauds ranging from a billion dollar mobile testing services scheme that ran thousands of unnecessary and expensive diagnostic tests on patients who had come for supposedly free or low-cost physical examinations, to telemarketers who preyed upon the elderly by offering ostensibly free knee braces and wheelchairs to senior citizens who neither needed nor wanted the equipment, to cases in which ambulance companies substantially overbilled for "intensive care" ambulances to transport fully ambulatory patients to routine follow-up medical appointments. The report stated that these kinds of frauds are most effectively fought by simultaneously pursuing criminal, civil and administratie proceedings. This year's cases have resulted in record jail sentences (over 21 years for each of several defendants in one case), record financial recoveries (over $350 million in one case), groundbreaking administratively-required future compliance programs and substantial recoveries for the states (over $16 million in one case to more than two dozen

states). The report stated that improving coordination among DOJ criminal and civil prosecutors, their state counterparts and administrative entities is a key to effective health care fraud enforcement. The Executive Level Health Care Fraud Policy Group, formed with the HHS Inspector General in November of 1993 to coordinate federal health care fraud prevention and investigations, is an example of this effort. The report also emphasized the need to continue close cooperation with state Medicaid Fraud Control Units, which have special expertise in this area. The report credited attorneys in the Justice Department's Civil and Criminal Divisions and the U.S. Attorneys' Offices around the country, the FBI, and the Inspector General of the Department of Health and Human Services for their leadership in this successful enforcement effort. The Department also relied heavily on the investigative and audit activities of the Defense Criminal Investigative Service, the Office of Personnel Management which supervises the Federal Employees Health Benfit Plan, the Inspector General of the Railroad Retirement Board, the Inspector General of the Department of Veterans Affairs, the Inspector General of the Department of Labor, and the Office of Labor Racketeering of the Pension and Welfare Benefits Administration. Vital support also was provided by the U.S. Postal Service Inspection Service, the Drug Enforcement Agency, the Internal Revenue Service, the Food and Drug Administration and the Federal Trade Commission. #### 95-115