Attorney General Eric Holder Speaks at the National Summit on Health Care Fraud

Thursday, January 28, 2010 - Good morning. I’m pleased to join Secretary Sebelius in welcoming you, and I thank you all for participating in today’s important discussion.

Let me also thank the National Institutes of Health for hosting us. It’s fitting that we’ve gathered at NIH, where some of our nation’s most innovative and collaborative thinking about health care is done. As we turn our attention to the problem of health care fraud – one of our most urgent, destructive, and widespread national challenges – we have an opportunity to build on the record of achievement that’s been established here.

Today’s summit marks a critical step forward in the work being done by HEAT, our Health Care Fraud Prevention and Enforcement Action Team. In establishing this task force last May, the Departments of Justice and Health and Human Services were inspired by common cause – and by common sense. We realized that we have a serious problem on our hands, and we decided it was time to redouble our efforts. We also recognized that the best way to strengthen our individual work is to combine forces and collaborate.

HEAT represents our shared commitment to combating health care fraud and, specifically, to protecting taxpayer dollars and our Medicare and Medicaid programs. But it’s more than just a partnership between our agencies. It’s evidence of this Administration’s commitment to fiscal responsibility and accountability. And, over the last eight months, it’s become proof that – with more effective communication and more efficient cooperation – we can make measurable, meaningful progress in the fight against health care fraud.

But we cannot do it alone. We need help from state and local leaders, and engagement from across the insurance industry and health care-provider community. There’s no question that our ability to protect taxpayer dollars, to ensure the viability of our government health care programs, and to strengthen our national health care system depends on our ability to expand the discussion beyond the federal government.

That’s what this summit is all about. Your presence here today is proof of a shared commitment aimed at identifying, punishing and preventing health care fraud. Secretary Sebelius and I are so grateful for your help in this joint effort. And we expect your insights and recommendations to help guide and enhance HEAT’s critical work.

So far, HEAT has fostered new opportunities for collaboration. It’s enhanced our ability to bring abuse to light and criminals to justice. And it’s enabled the recovery of stolen funds and the return of millions of dollars to the U.S. Treasury. Together, we must continue to build on these achievements.

As many of you know, last year brought record levels of achievement in our fight against health care fraud. In 2009, the Justice Department reached an all-time high in the number of health care fraud defendants charged, more than 800. We also obtained more than 580 convictions. And on the civil enforcement front, our health care fraud recoveries last year under the False Claims Act exceeded a stunning $2.2 billion dollars.

Many of these successes can be attributed to our Medicare Fraud Strike Forces, which are at the core of HEAT’s law enforcement mission. These strike forces supplement the enforcement activities of United States Attorneys’ Offices in select cities where unexplained, aberrant billing rates indicate that health care fraud may be especially high. By fostering increased cooperation and collaboration across our agencies, HEAT has enabled our strike forces to act with greater speed and efficiency to root out criminals who purport to operate as legitimate health care providers and suppliers.

Since HEAT was launched, our Medicare Fraud Strike Forces have been strengthened. In the last eight months, we’ve filed more than 60 cases. We’ve charged 200 offenders and secured more than 50 guilty pleas. And we’ve uncovered more than a quarter of a billion dollars in fraudulent billings.

I’m proud of this great work performed by our prosecutors, agents, analysts and investigators -- and by our partners at HHS. And I’m confident that we’re on the right path. That said, we cannot yet be satisfied. We cannot become complacent. And we cannot ignore the unfortunate fact that health care fraud remains a significant problem.

The scope of the problem is simply shocking. One estimate suggests that more than $60 billion in public and private health care spending is lost each year to health care fraud. That is a staggering amount of money. It’s half the entire economy of Secretary Sebelius’s home state of Kansas. It’s more than the net worth of America’s eight largest private foundations. And it’s 33 times the amount of money that Avatar – now the highest-earning movie of all time – has made at the box office.

It doesn’t matter whether you’re covered by Medicare or Medicaid, or by one of the many insurance companies that are victimized by fraud each year. Losses on this scale affect all of us. Fraud isn’t just a drain on the Medicare or Medicaid programs; it drives up the price that all Americans must pay for health care.

The enormity of the health care fraud problem is equaled only by the audacity of some of the fraud schemes that we are confronting. To take a recent example, last week, the Department of Justice settled False Claims Act allegations against a dental management company that was operating nearly 70 clinics across the country. These "Small Smiles Centers" served young children in predominately low-income areas. But instead of treating kids, this company was exploiting them to siphon millions of dollars from Medicaid. Many of these centers performed unnecessary and often painful dental procedures on unsuspecting, helpless children. In some cases, parents were told that healthy teeth needed to be removed. For putting profits above patient safety, this company will pay a $24 million fine, plus interest. And we are continuing to investigate the individual dentists who participated in this scheme.

In another recent case, the Justice Department secured a $10 million consent judgment against two former hospital executives in Los Angeles who scammed our Medicare system by preying upon homeless people. Through kickbacks and coercion, these fraudsters were turning homeless people into hospital patients. Until we caught up with them and shut them down, they were charging Medicare for treatments these patients didn’t receive, didn’t request or didn’t need.

These cases, and countless other successful civil and criminal enforcement actions just like them, are proof that our collaborative efforts are working. We are striking a blow against fraud schemes across the country and, in so doing, are sending a clear message that health care fraud will not be tolerated.

So where do we go from here?

First, we must strengthen HEAT. We will continue to combine and leverage our agencies’ resources and expertise, including the FBI and the Office of Inspector General at HHS, to prevent and prosecute fraud. HEAT will continue to work closely with local U.S. Attorneys Offices to pursue both civil and criminal cases. And in bringing these fraudsters to justice, we will use the power of the Internet and the media to inform the public and the health care industry about how to prevent future fraud schemes.

Second, we’ll continue to support our Medicare Fraud Strike Forces and work to expand these teams to areas of the country where our efforts are most needed. These teams have changed the enforcement landscape. They’ve also demonstrated that, in the area of health care fraud, we must continue to think outside the box and pursue innovative investigative and prosecutorial strategies.

Third, we will continue to push for the investments necessary to meet our duties and do our jobs. I’m pleased that Congress and the Administration have provided strong support. In FY2010, the Administration’s fraud-fighting budget will increase from nearly $200 million to more than $300 million. This may seem like a lot of money – and it is. But I assure you that it’s a sound and prudent investment. For every dollar we spend combating health care fraud, we’re able to return four dollars to the U.S. Treasury and the American taxpayers.

Fourth, our agencies will continue to work with Congress to identify and pursue the legislative and regulatory reforms necessary to prevent, deter and prosecute health care fraud. These reforms range from removing barriers that impede information-sharing to increasing sanctions and penalties.

Finally, t he department will continue to engage the private sector in our anti-fraud efforts. We’ll seek out guidance from representatives of the insurance industry and in the health care-provider community, many of whom are here with us today. We know that the vast majority of those who work in the health care industry are honest people who want to help patients and follow the law. But we also know that a few bad actors have created an industry-wide problem. You all have a critical role to play in helping us to encourage good behavior, bring waste and abuse to light, and hold criminals accountable.

So long as health care fraud pays and these crimes go unpunished, our health care system will remain under siege. These crimes harm all of us – government agencies and programs, industries and individuals. But, through HEAT and with your support, we are fighting back. We welcome and need your help in this shared enterprise.

Your presence here today gives me great hope about our prospects for progress. I’m optimistic about what we can accomplish together, and I look forward to working with you all.