Health care fraud outpacing law, FBI chief says

March 22, 1995|By Knight-Ridder News Service

WASHINGTON -- Health care fraud is the fastest-growing criminal enterprise in the United States -- costing government and private insurance plans at least $44 billion a year -- and federal investigators are far behind the crooks, FBI Director Louis J. Freeh told Congress yesterday.

Fraud schemes are so profitable that street gangs and cocaine distributors in South Florida, Southern California and other parts of the country are turning to ripping off Medicare, Medicaid and private insurance companies, Mr. Freeh said.

Although the number of FBI agents assigned to full-time pursuit of health care fraud has more than doubled in the past three years, to 249 this year from 97 in 1992, their caseload is soaring just as quickly, Mr. Freeh said. "There are many, many cases on the shelf not being worked," he said.

When a case is brought, the effort pays off, he added. For each $1 spent on investigations last year, the government recovered $13.65 in fines and forfeitures. Federal prosecutors won 353 convictions in 1994.

Mr. Freeh called for additional auditors, agents and prosecutors as well as stiffer federal penalties. He asked for a specific statute outlawing health care fraud -- prosecutors now commonly rely on mail- and wire-fraud laws and money-laundering statutes -- and for authorization of wiretaps to pursue complex cases.

Representatives of other federal agencies and private insurers endorsed Mr. Freeh's pleas, saying they can do only so much despite unprecedented cooperation in investigations and prosecutions.

Senators from both parties vowed to help. At a hearing of the Senate Special Committee on Aging, several lawmakers complained that a bill aimed at cracking down on fraud died last year when efforts at health care reform collapsed.

Meanwhile, the estimates of fraud continue to climb. While Mr. Freeh said losses to public and private insurance plans exceed $44 billion, one General Accounting Office study put the figure at $100 billion this year.

"Scam artists are bilking the system of billions, driving up the cost of health care for all Americans. We simply cannot wait any longer to provide the tools to fight this problem," said Sen. William S. Cohen, a Maine Republican who chairs the special committee.

"We're kidding ourselves if we think this can be solved on the cheap," said Sen. Harry Reid, a Nevada Democrat.

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