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Date:  August 4, 1995
For Release:  Immediately
Contacts:  HHS Press Office (202) 690-6343
           OIG Press Office (202) 619-1142

At a press conference, Secretary Shalala displayed medical supplies that have been associated with fraudulent billing, including a wheelchair pad with restraining shoulder straps that costs $50 to produce but has been fraudulently billed to Medicare for $859 as an orthotic "body jacket."

Today's alert is the second in a series of new fraud alerts that the HHS inspector general will issue over the next year to make the public and industry aware of fraudulent health care practices. "These alerts give both professionals and consumers the information they need to identify fraud, and stop it in its tracks," Secretary Shalala said.

The alert highlights several types of fraud in the provision of medical supplies to nursing facilities. These include claims for supplies and equipment that are not medically necessary, claims for items that are not provided as claimed or are double billed, and paying or receiving kickbacks in exchange for Medicare or Medicaid referrals.

"Fraud alerts put the industry on notice that we are aware of certain abusive practices and that the government will vigorously investigate and seek prosecution," said HHS Inspector General June Gibbs Brown. "The alerts have a powerful and positive impact on industry behavior and provide the industry an opportunity to do a self-examination of its own practices."

Today's alert cites examples of violations. In one case, a supplier gathered information on the death of nursing facility residents. Immediately thereafter, the supplier back-dated orders of medical supplies in quantities consistent with Medicare's 30-day limitation on after-death shipments.

The alert also cites suppliers who supply nursing facilities with low-cost items, but submit Part B claims for high-priced items. The false "body jacket" is an example.

"As a general matter, we are concerned about the provision of services and equipment to beneficiaries in nursing facilities because there are a multiplicity of providers who provide services to the beneficiaries," Inspector General Brown said. "No single individual or institution is held responsible for managing the beneficiary's care and ensuring that only needed services are delivered to the patient. Many of the incentives run in quite the opposite direction."

The HHS fraud alerts are associated with "Operation Restore Trust," a new initiative to detect fraud and abuse in Medicare and Medicaid, launched by President Clinton and Secretary Shalala in May. The initiative is focused on five states which account for 40 percent of Medicare and Medicaid beneficiaries.

The fraud alert includes information about how to contact the Office of Inspector General with information about possibly fraudulent activities. This includes the toll-free line established under "Operation Restore Trust:" 1-800-HHS-TIPS.

"Fraud committed against the Medicare and Medicaid programs is a serious problem, and our inspector general has established health care fraud as a top priority," Secretary Shalala said. "But to overcome fraud, we in government must work together with industry and consumers. There are some 750 million claims made to Medicare alone each year. We need a vigorous team effort to spot those claims which are fraudulent -- and a team effort is what 'Operation Restore Trust' is all about."

"Operation Restore Trust" is a joint effort of federal and state governments. It is focused especially on fraud in home health care, nursing home care and durable medical equipment, three of the fastest growing cost areas for Medicare and Medicaid. "Operation Restore Trust" is being carried out in California, Florida, New York, Texas and Illinois.

Texas Attorney General Dan Morales participated with Secretary Shalala in the press conference announcing today's fraud alert.

NOTE: Copies of the "Special Fraud Alert" are available from the OIG Press Office, (202) 619-1142.