The Department of Health, Education and Welfare could save more than $1 billion of an estimated $6.5 billion it wastes annually if given new legal authority, according to the department's inspector general, Thomas D. Morris.
Under existing law it is not a federal crime to steal HEW grant and contract money once it has been transferred out of federal accounts, Morris told a Senate Governmental Affairs subcommittee.
It is also possible to bribe a non-federal Medicaid or Meidcare official without fear of federal prosecution, unless the briber uses the mails, Morris said.
Morris recommended closing these and other legal loopholes in a report on the work of his year-old, $40 million-a-year office.
In April, the office reported annual HEW losses of up to $7.4 billion a year (later revised to $6.5 billion), including $1 billion in outright fraud. Other misspending resulted from such practices as overpayment of Medicaid and welfare that called for reform, Morris said.
Morris said his office has recently stepped up investigations into possible "kickback" schemes by resident doctors in teaching hospitals who bill Medicaid for patient services, then share the payments with the insitutions or teaching physicians.
Hospitals also cited an "increasing tendency" for hospital doctors to bill Medicaid for medical services performed entirely by residents or interns.
Charles C.Ruff, HEW's deputy inspector general, said there is no certainty that the hospital billing abuses are deliberately fraudulent or that they involve criminal acts. Medicaid abuses have accounted for three-fifths of the $1 billion that HEW loses to Morris' office.
Some 2,500 cases of Medicaid abuses by doctors and pharamacists are under investigation, with 517 potential criminal offenses among them, Morris told the subcommittee.
In the effort to cut HEW waste, computer printouts of federal payrolls, welfare rosters and other government data have helped identify thousands of possible "double-dipping" abuses - receiving public assistance in more than one state or while ineligible because of employment.
Morris also told of recent indications that Medicaid, Social Security and other HEW claims are being filed in the names of dead persons. The subcomittee chairman, Sen. Sam Nunn (D-Ga.), called this "tombstoning."
The HEW inspector general is denied access to the only federal register of deaths, kept by the National Center for Health Statistics, because of a law requiring confidentiality, Morris continued, suggesting a need for legislative change.