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Date: Monday, May 13, 1996
FOR IMMEDIATE RELEASE
Contact: HHS Press Office (202)690-6343

HHS REPORTS PROMISING FIRST YEAR FOR "OPERATION RESTORE TRUST" INITIATIVE

HHS Secretary Donna E. Shalala today marked the first-year anniversary of HHS' anti-fraud initiative, Operation Restore Trust, saying new approaches in the pilot program have already produced $42.3 million in recoveries. This constitutes a return of $10 in recoveries for every $1 spent on the project.

The pilot project is operating in five states, and the Clinton Administration has proposed expanding it to all 50 states in the coming fiscal year.

"Operation Restore Trust has pioneered new partnerships within the federal government, new cooperation with states, and new ways of targeting and stopping fraud in the Medicare and Medicaid programs," Secretary Shalala said. "In its first year, Operation Restore Trust has proved its value, and the President wants to extend its reach to every state in the nation."

With first-year targeted demonstration project funds of $4.09 million, Operation Restore Trust has produced $42.3 million in restitutions, fines, settlements and recovery of overpayments. This includes $24.5 million returning to the Medicare Trust Fund from criminal restitutions, fines and recoveries; $14.1 million returning to the Trust Fund as a result of civil judgments, settlements and penalties; and $3.7 million returned to the Treasury as a result of services inappropriately billed or medically unnecessary services rendered.

HHS Inspector General June Gibbs Brown said that "Operation Restore Trust is proving what it was meant to prove: that a new focus on fraud and abuse, and new cooperative approaches, can help us to better protect federal Medicare and Medicaid dollars."

The initiative was announced by President Clinton last May at the White House Conference on Aging. It is aimed specifically at fraud, waste and abuse in three high-growth areas of Medicare and Medicaid: home health agencies, nursing homes, and durable medical equipment suppliers.

Inspector General Brown said that out of 272 Medicare and Medicaid cases currently under investigation in the three targeted payment areas, 244 are new cases that were opened as a result of the Operation Restore Trust initiative. She said 64 of the cases are joint efforts with other law enforcement agencies.

Operation Restore Trust is focused on five states (New York, Florida, Illinois, Texas, and California) which account for 38.5 percent of Medicaid beneficiaries and 34 percent of Medicare beneficiaries.

New approaches being tried under the initiative include:

• Use of sophisticated statistical methods to target providers for investigations and audit

• Use of teams of HCFA data staff, IG auditors and nurses from state agencies to conduct comprehensive reviews of rehab and skilled nursing facilities with unusually high Medicare reimbursement rates. Reviews looked both at facility-specific issues as well as potential systemic problems

• Increased emphasis on concerted planning and executing of investigations with the Department of Justice and other law enforcement agencies

• Use of public forums both to disseminate information to beneficiaries and providers about known fraudulent techniques, and to gather information from them

• Training and empowering state Aging Ombudsmen to detect and report fraud and abuse in nursing homes

• Use of state survey officials who regularly monitor care in home health agencies to help identify inappropriate and fraudulent billing (see separate press release).

Other accomplishments during the first year include:

• 35 criminal convictions and 18 civil judgments have been obtained since March 1, 1995, in cases folded into the ORT project and benefiting from the increased attention, focus, and support provided by ORT. In addition, 93 program exclusions of individuals and corporations have been taken.

• A new HCFA satellite office has been established in Miami which, in addition to its other activities, is heavily involved in outreach to the local community to alert the public and local businesses to health care fraud schemes.

• A toll-free Hotline ("HHS-TIPS") has been established to receive information on possible waste, fraud and abuse.

Vladeck said that a number of significant potential program changes have been identified as a result of Operation Restore Trust, which could result in substantial savings by preventing fraud, waste and abuse before they occur. The potential changes are being developed as legislative, regulatory, and administrative actions.

The HHS Office of Inspector General, the Health Care Financing Administration and the Administration on Aging are the three agencies within HHS which are jointly carrying out the Operation Restore Trust initiative. The project has also involved an intergovernmental team comprised of federal and state personnel, including the Department of Justice and the United States Attorneys' offices across the country.

HHS Assistant Secretary for Aging Fernando Torres-Gil said, "Seniors are among the most vulnerable persons to be targeted by unscrupulous health care providers. It is up to us to educate and inform them and others of fraudulent practices so that critically needed services and programs are there for them and future generations when they are needed."

Services targeted by Operation Restore Trust were chosen because they are three of the fastest-growing cost areas in Medicare and Medicaid.

Under President Clinton's FY 1997 budget proposal, the approaches successfully piloted in the demonstration project would become part of a nationwide initiative. The President's budget also contains proposals for providing increased and more stable funding for anti-fraud efforts in Medicare and Medicaid. Altogether the President's proposals for a nationwide anti-fraud initiative for Medicare and Medicaid would involve FY 1997 spending of $597 million, an increase of $158 million over current funding levels. The total saving expected from the additional spending is $3.5 billion over seven years (1997-2003).