Release: Senate Committee Adds Sanders’ Fraud Crackdown to Health Reform Bill

WASHINGTON, July 13 – The Senate health committee today voted 23 to 0 for an amendment by Sen. Bernie Sanders (I-Vt.) that would double penalties for health care fraud.

As the health panel continued to hammer out health care reform legislation, Sanders said it was critical to address the billions of dollars in fraud and abuse committed by major corporations in the health care industry.

“What we have seen for many years is the systemic fraud perpetrated by private insurance companies, private drug companies, and private for-profit hospitals ripping off the American people and the taxpayers of this country to the tune of many billions of dollars,” Sanders said.

Sanders’ amendment would authorize double the current penalties under the False Claims Act for fraudulently billing new health exchanges created by the reform bill. Convicted companies would face fines of up to six times the amount of the fraud. “I worry very much that for many international corporations getting hit with treble damages may well be worth it and passed along as a cost of doing business,” Sanders said. “What we have to tell these big multi-national corporations is that if they are going to engage in fraud they’re going to pay for it dearly.”

Health and Human Services Department investigators found this year that 80 percent of insurance companies participating in the Medicare prescription drug benefit overcharged subscribers and taxpayers by an estimated $4.4 billion. 

Virtually all of the major hospital chains, private insurance companies, and pharmaceutical companies have been involved in massive health care fraud over the past decade, the senator added.

Sanders also pointed to a string of criminal and civil cases against many of the leading corporate health care providers in the country, including:

  • Earlier this year, a jury found Pfizer owed Wisconsin $9 million for violating the state Medicaid fraud law more than 1.4 million times by purposely overcharging the state for prescription drugs. The company faces potential fines from $140 million to $21 billion.
  • Also in 2009, UnitedHealth, a leading insurance company, paid $350 million to settle lawsuits brought by the American Medical Association and other physician groups for shortchanging consumers and physicians for medical services outside its preferred network.
  • In 2003, GlaxoSmithKline paid $88 million in civil fines for overcharging Medicaid for its anti-depressant Paxil.
  • Also in 2000, Humana paid $14.5 million to settle federal charges of overcharging government health programs.
  • In 2000, the Hospital Corporation of America agreed to pay $745 million to settle civil charges that it systematically defrauded Medicare, Medicaid and other federally-funded health programs.