Kickbacks in the federal-state Medicaid program are "rampant" and a 1972 law designed to make them illegal is not being enforced, according to a Senate committee report released yesterday.
The report, which surveys testimony and evidence collected by the Senate Special Committee on Aging over the last seven years, finds the present law weak in its provisions to eliminate kickbacks and finds the Inter Revenue Service "anything but aggressive in its enforcement of the IRS code provisions."
Althougn the report asserts that kickbacks occur most frequently with nursing homes, "increasing evidence points to hospitals, medical practitioners, clinical laboratories and other suppliers" as engaging in the practice.
Medicaid, a federal-state program designed to provide medical care for indigents, cost $15.5 billion in fiscal 1975, according to the report. No estimate is made of how much kickbacks are costing in either Medicaid or Medicare, the federal program to provide medical care to the elderly.
The report, referring to past surveys done by the committee, lists a variety of methods to pay kickbacks including cash, credit, renting space, furnishing supplies, paying for employees, trading stamps, gifts, vacations, advertising, leasing automobiles and stock purchases.
The report, surveying evidence in several states, recalled that it had found that in California, nursing homes received kickbacks ranging from 10 to 60 per cent from pharmacies, physical and occupational therapists, undertakers, food suppliers, cemetery lot sales and contractors.
Despite the mass of evidence collected by the committee, the report points out, "there has been only one case prosecuted under the kickback statute since its enactment in 1972 . . . "
Federal prosecutors asked about the failure to prosecute said that kickbacks "were among the most complicated and difficult" cases to prove, the report says. In addition, according to the report, prosecutors said that they found it "hard to justify the expenditure of man-hours" on a misdemeanor, which is how present law categorizes a Medicare or Medicaid kickback.
The report urges Congress to pass legislation that would make offering soliciting or receiving a kickback a felony in both Medicare and Medicaid. It also calls on the Internal Revenue Service to begin a "systematic analysis of the tax returns of high-volume Medicare and Medicaid providers," and recommends that Congress provide 100 per cent funding for states to hire investigators and auditors for a three-year period.