If you have issues viewing or accessing this file contact us at NCJRS.gov. ;"'1 . MEDICARE AND MEDICAID FRAUDS HEARING BEFOruO ~'lIE SPECIAL COMlfITTEE ON AGING lTNIT)jJD STATES SENATE NINETY-FOURTH CONGRESS SECOND SESSION PART 7-WASHINGTON, D.C. NOVEMBER 17, 197(1 JUN 2 b 1978 ACQUiSITiONS .nted for the use of the Special Committee 011 Aging U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1977 Ie SuperIntendent of Documents, U.S. Government PrInting Office WashIngton, D.C. 20402 - ______L ______ •r SPEClA.L COMl\HT1.'EEl ON AGING FRANK CHURCH, Idall0, Ollairmtl.ll HARRISON A. WILLIAMS, JH., New .Tersey HIRAM L. FONG, IItn\,al! JENNINGS ItANDOLPII, Wcst Virgiula CLIFFORD P. HANSEN, Wyoming EDMUND S. MUSKIE, Maine EDWARD W. BROOKE, Massachusetts l!'IlANK ID. MORS, Utah CHAllLES H. PElWY, Illinois EDWAltD 1\[, KENNEDY, Massachusetts ROBIORT ~'. r:!'AFFOllD, Vermont WAT/l'lDlt l!'. l\lONDALID, lIf.innesota :r. GLENN BEALL, .TIt., lIIaryland VANCE HL\It~'KE, In<1ltlllL PE~'E V. DOi\IENlCI, New Mexico CI:'L\IBORNE l'ELL, Rhocle Island BILL BROCK, ~rennessee ~'HOll[AS F. EAGLETON, MissourI DEWEY l!'. BAll~'rJETT, OI(lahomfl .TOlIN V. 'rUNNEY, Callrornla LAW~'ON CHILES, Florida DICK CLAIlK, Iowa JOlIN A. DURKIN, New Hampshire WITJLIA~I E. OltlOr" Staff Diractol' DAVID A. AF~'FlLD'l', Ollie! OOl/lIscl VAL J. flALAMANDAllIS, Assoalatc OOl/lIscl JOHN GUY MILLEn, Millority Staff Dircctol' PATUICU G. OnIOL, Ohio! O/.erk lIIeMcul'e and lIIedicaid l~rauds : Pltrt 1. Washington, D.C., September 2G, 1975. I'nrt 2. Wllshlugton, D.C., Noyember 13. 1075. l'art 3. Wnshington, D.C., December 5, 1975. Part ,1. Washington. D,C., February 10, 197G. Part 5. Washington, D.C., August 30, 1970. Pnrt O. Washington, D.C., August 31, 1070. Part 7. Washington, D.C., November 17,1970. Part 8. Washington, D.C., March S, 1077. l'art 9. Waehington, D.C., March 9, 1077. (Additional heltrings autlcipated but not scheduled at time of this printing.) (II) CONTENTS Pngo Opening SGnGelllent by Senator Frank Church, ehairmun________________ 757 Statement by Senator Charles H. Percy______________________________ 758 Statement by Senator Frank E. Moss________________________________ 764 CHRONOLOGICAL LIST OF WITNESSES Hynes, Charles J'l~ deputy uttOl'ney general, Office of the Special State Prosecutor for l'lursing Homes and Social Services, New York City; accomptlllicd by Hurry Blair, administmtive assistant, and Albert Appleton, executive ussistant _________________________________ .__ __ 765 Skinner, Samuel K., U.S. attorney, N orthorn Distriot of IlIinois_____ ____ 789 (III) ) ~IEDICARE AND }IEDICAID FRAUnS WEDNESDAY, NOVEMBER 17, 1976 U.S. SENA1'E, Sl'EOIJ.\.L CO~n!l'rl'l1m ON AmNo, Washington, D.O. The committee met, pursuant to notice, at 10 :10 a.m., in room 318, R.ussell Senate Office Building, Hon. Frank ChUl'ch, clu\,innnn, pre­ siding. Present: Senators Ohmch, Moss, and Percy. Also 1)resent: "VilHam E. Oriol, staff director; D:wicl A. Affeldt, chief counsel; Val ,T. Ha1amandaris, associate counsel; John Guy ~fillel", minority stair director; Margaret Ft~ye, minor.ity l)rofcssional staff member; PatJ:icia G. Oriol, chid clerk; Donna Gluck, msourco assistant; und Eugene R. Oummings, printing tlssistnnt. OPENING STATEMENT BY SENATOR FRANK CHURCH, CHAIRMAN' Senator CUUROJ1. The hearing will come to order. 'We would like to welcome our witnesses this morning. 'rhe purpose of toclay's he[tring is to l{'[trll what c(tn be done to improve the man­ agement and the fiscal integrity of tho medicare !tncl medicaid pro­ gram:::. I am sure that members 0:[ this committee und the, Americ:m public generally have been shocked and dismayed by tho recent disclosures of fraud and abuse in Government; ]lealth clue programs. I want to say that all the members of this committee appl'ecia,te what Senator Moss has done in the last 2 years in bringing tllis sit'lllt­ tion to Jight, ancl I want to express on 11el1al£ of the committee, Senator Moss, our gratitude 101." your leadership in opening up It field of iraud tluti; seems to be pel'vfl,dhlg the entire mcclicltl'e and m.edicaid system. I do not know of a morc. urgent problem of t.his kind tlutt faces the Government and, on beha1:f of the committee, I simply Wn.l;t t.o express our deep appreciation. for :your work. By now It should be deltr to everyone tha.t reform canno.t Wltit. It is the cruelest paradox that I can think of that thousands of om: elderly are going without t.he healt.h care they need, allcl :yet we Jose millions of donal'S to fraud ana mismanagement. Om two witnesses todfty will further demonstru.tc the s(we.rity of existing problmns and they will give us SOll1e gnidance concerning legislation which is lleeded. (757) 758 Mr. Oharles J. Hynes, the New York special prosecutor for nurs­ ing homes, brings with him the statewide perspective of his SpeCi!l' work. Mr. Sam Skinner, U.S. attorney, northern district of Illinr", will tell us what we can do to strengthen the hand of Federal prosecutors. OOST EFFEC'l'IVENESS PUAISEP I am particularly interested in the cost effectiveness of the New York special prosecutor's office. I am told Mr. Hynes has recovered many times the amount of money spent on his investigati0l1' In fact, he recently anllounced that his auditors find $2,500 in medicaid overcharges for every man-day of effort. If all prosecutors could claim such a ret.urn we could payoff the 'Tadons State, municipal, perhaps even national debts. In the coming months 01' years we wHl consider national health illsmance plans. I want to make it clear this morning that we want to make sme that the elderly are not short-changed in our efforts to make health care more generally av:tilable to all Americans. At the same time we will make every effort to make sure we do not l'e­ peat the mistakes that have been made in medicare and medicaid and tha,t we tn,ke such corrective action as may be available to us. Senator Perey, yon have played an active role in the investiga,­ tions to date. If you have a statement you woulcllike to make at this time, we will be happy to receive it. STATEMENT :BY SENATOR CHARLES H, PERCY 8enatOl.' PElley. rrhank you, Mr. Ohairman. I would first and foremost like to say how very pleased I am that Senator :Hoss could be here this morning'. I have worked intimately with him for 6 or 7 y<?ars as the l'nuking'Republicl111 on this Subeon;­ committee on Long-Term Oare. I llave known his devotion to this field. He has conducted his subcommittee in a totally nonpartisan fashiOll, amI 'Ye, have worked intimately and well with the staff ap­ pointed by the Dcmoeratic members. It IHls always been a nonpal'l"isl1n reJationship, and I have drawn upon them for advice, counsel, and support, and I comd'lend them and commend the leadership we have had. It is a great, tragedy to have his continuing; gnirlance all,d lcn.der­ SlllP taken from our committee, but I kIlOW he shall have a lifetime int.erest in the fieleL. lYe corclinJly invite hhn to participate in every way possible. lYe are gratified by his pl'esenr-e this morning. r would like to express my deep appreciation to Senatoi' Ohnrch and the staff of the Aging Oommittee for these investigations. I wonld also like to welcome :Mr. Oharles Hynes and Mr. Sanl Skhlller this momlng to testify hefore the committee. r look forward to their suggestions as to how we can enact legis­ lation which will curtail fratidulent practices in medicare and medic­ aid programs and, furthermore, how we can alleviate obstacles which presently impede Federal prosecutions. 759 Fms'!' CONVIO'!'IONS REOEIVED Last 'Thursday, November 11, Samuel Skilmer, the most active U.S. attorney in terms of medicaid fraud pl'osecutions, reC!eived the fiTst convictions under the 1972 Federalla;w prohibiting kickbacks in the medicaid program. Since 1069, Senator Moss and I have been concerned with ntll'sing home scandals and medicfil:e-medicaid frauds. It pleases me that after 7 years of hen,rings, repeated iuvestigfttions, and numerous reports, om efforts are finn,lly bearing fruit. The purpose of a public hearing such as this is to disseminate in­ formation as to what our poliey is going to be a.nd how the law is going to be implemented. I feel we should serve notice today­ publicly-that with the Skinner convictions we can now ~ffectively serve notice to all who would de£mud aud abuse the medicaid pro­ grn,m. They simply cannot and will not escape pl·osecution. ,'iTe passed the law. The law is going to be carried out and has now been put into effect. Congress and the judicial system mean to put an end once and for all to one of the worst scandals of our time: medicaid fraud and abuse. Persons who would defraud the elderly poor, I think, are the most reprehensible-certainly those in the medical profession themselves who luwe taken a vow to serve their fellow man. I think it is (tu un­ conscionable action on their part to engage in these practices-those uuder the cloak of engaging and caring for the pOOl' who Pl'oftt from the poor. The same goes on ,Vall Street. There is money to be made On the poor, providing they are elderly-particmlarly if they are elderly. I think Wf'. intend to move, and move strongly, ,Ve have had witnesses before, 11S who n,1'o, now serving time in jail.