Secretary of Health, Education and Welfare Joseph A. Califano Jr. yesterday asked Congress for power to bypass the courts and impose a civil penalty of $2,000 on doctors and other medical providers for each fraudulent Medicare or Medicaid claim.
The legislation, submitted to House Speaker Thomas P. (Tip) O'Neill (D-Mass) would allow Califano to impose the penalty whenever he determined after a departmental hearing that a provider of medical services has filed a fraudulent claim. The penalty could be appealed to the courts, but Califano could assess the fine without first going to the Justice Department and getting it to prosecute.
In addition to the $2,000 penalty, Califano asked that he be allowed to assess damages equal to twice the amount of the fraud.
In some Medicaid or Medicare cases, these penalties could amount to massive dollar figures, because there are often multiple violations-for example, the filing of Medicaid claims for many visits not made or patients not seen, or for many lab tests not actually given.
Califano said in a letter to O'Neill that he wants these powers to help wipe out fraud and abuse in the Medicaid and Medicare programs, Department experts recently estimated Medicaid overpayments by the U.S. and the states at a minimum of $3 billion a year.
Medicare overpayments are estimated at several billion dollars.
Califano said the new power would result in savings of $23 million to the government the first year.
The bill also would strengthen Califano's powers to exclude health-care professionals from both Medicare and Medicaid after conviction of a crime related to either program, and to offset Medicare overpayments by withholding Medicaid payments to doctors, hospitals and nursing homes.