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Health care reform

Combating Health Care Fraud: A Critical Component of Health Care Reform

Strategic Insights

— 2 min read

As the nation debates comprehensive health care reform, a critical aspect that often flies under the radar is the urgent need to combat health care fraud. Health care fraud is a significant problem that not only drains billions of dollars from our health care system but also puts patients' lives at risk. In a recent Senate Judiciary Committee hearing, Chairman Patrick Leahy (D-VT) emphasized the importance of addressing health care fraud as part of the health care reform effort. The hearing featured Deputy Health and Human Services Secretary Bill Corr and Assistant Attorney General Tony West, who highlighted the government's efforts to combat health care fraud.

Key Takeaways:

  • Health care fraud is a staggering problem, with estimates suggesting that about three percent of the funds spent on health care are lost to fraud, amounting to over $60 billion dollars a year.
  • The Medicare program alone lost over $10 billion dollars to fraud in 2009, according to the Government Accountability Office.
  • There are numerous high-profile cases of health care fraud, including the $300 million settlement between Quest Diagnostics Inc. and California businessman Thomas Cantor, and the $2.3 billion settlement between Pfizer and the Department of Justice.
  • Testimony at the hearing highlighted the importance of anti-fraud enforcement and the need for stronger measures to combat health care fraud.
  • The Health and Human Services Department and the Justice Department have been working closely together to address health care fraud, with notable progress made since the late 1990s.
  • Private health insurers also see billions of dollars in fraud, which is often harder for the government to track.
  • The Finance Committee and the HELP Committee have developed health care reform legislation that incorporates important provisions focused on fraud, waste, and abuse.
  • The pending legislation would expand the Health Care Fraud and Abuse Control program, which funds federal anti-fraud efforts.
  • Every dollar spent on health care fraud enforcement returns an estimated four dollars to the U.S. Treasury.

Statistics:

  • $60 billion: The estimated amount of funds lost to health care fraud each year.
  • $10 billion: The amount lost to fraud in the Medicare program alone in 2009.
  • $300 million: The settlement amount between Quest Diagnostics Inc. and California businessman Thomas Cantor.
  • $2.3 billion: The settlement amount between Pfizer and the Department of Justice.
  • 11 billion dollars: The amount recovered and restored to the Medicare Trust Fund since the creation of the Health Care Fraud and Abuse Control program in 1996.
  • 4: The estimated return on investment for every dollar spent on health care fraud enforcement.

Sources:

  • [Statement of Senator Patrick Leahy, Chairman, Senate Judiciary Committee, On "Effective Strategies For Preventing Health Care Fraud" October 28, 2009](https://www.leahy.senate.gov/press/statement-by-senator-patrick-leahy-chairman-senate-judiciary-committee-on-effective-strategies-for-preventing-health-care-fraud-october-28-2009)

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