Thank you Secretary Sebelius.   Good morning.   I’m pleased to join Secretary Sebelius, CMS Administrator Don Berwick and Dennis Jay of the Coalition Against Insurance Fraud in providing an update on our joint efforts to combat health care fraud and, specifically, to protect taxpayer dollars and our Medicare and Medicaid programs.  

My name is Tom Perrelli, and I’m the Associate Attorney General of the Department of Justice.   In that capacity, I oversee the federal government’s civil litigation across the country, including the Justice Department’s efforts to recover billions of taxpayer dollars lost to fraud, waste and abuse, including health care fraud.   Fighting health care fraud has been one of this Administration’s and the Justice Department’s top law enforcement priorities.   And it’s not just because we want to stop the wrongdoers from ripping off American taxpayers, senior citizens, and patients.   It’s also because we know that few decisions are more critical to the quality of our lives, our children’s lives, and our parents’ lives, than the decisions we make about health care.   When consumers are treated by health care professionals, they should have treatment that is not tainted by kickbacks, not influenced by misleading marketing schemes, and not made more expensive by a fraudster’s desire to put profits over patients.  

The Departments of Justice and HHS have a long history of working together in this fight against health care fraud.   While we know that most health care dollars are spent on healing sick Americans and most companies and providers work hard to play by the rules, we also know that too much money is lost to fraud and abuse.   So, we have been fighting back together, on behalf of American taxpayers and patients.  

Today’s “Health Care Fraud and Abuse Control Program Report” outlines our prevention and enforcement achievements in that fight during this Fiscal Year 2010.   This latest HCFAC report tells the story – loud and clear – that President Obama’s goal and our two agencies’ unparalleled commitment to prevent, identify, and prosecute the most egregious instances of health care fraud is making a stunning difference:  

·         In just the last fiscal year, a record $4.0 billion in taxpayer dollars was recovered for the Medicare Trust Fund, other Federal Agencies, and whistleblowers who helped ferret out fraud.   A total of approximately $2.86 billion was deposited to the Medicare Trust Fund – an increase of more than $350 million over the prior year’s total.

·         We won or negotiated approximately $2.5 billion in health care fraud judgments and settlements – that’s the largest annual figure in history and a leap of more than 50% in just one year - from Fiscal Year 2009.

·         We at DOJ also opened more than 2,000 criminal and civil health care fraud investigations – that’s more than 1,100 new criminal health care fraud investigations and almost 950 new civil health care fraud investigations.   All three are the highest numbers ever for health care fraud investigations initiated in a single year.

·         Our prosecutors in the Justice Department’s Criminal Division and our U.S. Attorney’s Offices have been incredibly hard at work as well.   We reached an all-time high in the number of health care fraud defendants charged – more than 930 health care fraud defendants.   That’s a 16% increase over the prior fiscal year.   In Fiscal Year 2010, we secured more than 700 criminal convictions for health care fraud.

These numbers tell us that the HEAT partnership that Secretary Sebelius highlighted has been incredibly effective.   It was May 2009, when Attorney General Holder and Secretary Sebelius brought our two agencies together to create the Health Care Fraud Prevention & Enforcement Action Team – which we call HEAT.   HEAT elevated DOJ’s and HHS’ joint commitment to combating health care fraud to a Cabinet-level priority – aggressively bringing to bear the full resources of the federal government against those who would illegally divert taxpayer resources for their own gain.  

Over the past two years, this unprecedented collaboration made possible by HEAT has led to extraordinary results.   In the last two years, we at the Department of Justice have recovered a record amount of taxpayer dollars lost to health care fraud than in any other two-year period in the Department’s history.   Those recoveries include cases like the AstraZeneca case.   Last April, AstraZeneca LP and its subsidiary paid $520 million to resolve False Claims Act allegations that they illegally marketed the anti-psychotic drug Seroquel for uses not approved as safe and effective by the FDA.   Such unapproved uses are known as “off-label” uses because they are not included in the drug’s FDA approved product label.   We alleged that between 2001 through 2006, AstraZeneca promoted Seroquel to psychiatrists and doctors for certain uses not approved as safe and effective, including for Alzheimer’s disease, attention deficit hyperactivity disorder, depression, and other conditions.   In addition to off-label marketing, the civil settlement resolved claims that AstraZeneca violated the federal Anti-Kickback Statute by offering and paying illegal monies to doctors it recruited to promote unapproved uses of Seroquel, to induce doctors to prescribe the drug for unapproved uses.  

On the criminal side, the DOJ and HHS Medicare Fraud Strike Forces have been a big part of our success story.    During the past fiscal year, we expanded these strike forces to three new regions – to include Brooklyn, New York; Baton Rouge, Louisiana; and Tampa, Florida.   These are areas in the country where the Medicare data is showing “hot spots” of unexplained high billing levels.   The Report details some of the Strike Forces’ accomplishments over the past fiscal year, including:

·         140 criminal indictments involving charges filed against nearly 300 defendants who collectively billed the Medicare program more than half a billion dollars;

·         More than 200 guilty pleas negotiated and 19 jury trials litigated, with winning guilty verdicts against 23 defendants; and

·         146 defendants sentenced to prison during the fiscal year, averaging more than 40 months of incarceration.  

We are proud of all this great work being done by the Justice Department’s prosecutors, FBI agents, analysts and investigators, working hand-in-hand with our partners at HHS.   These accomplishments reflect this Administration’s ongoing and intensive efforts to protect the American people and to safeguard precious taxpayer dollars in these times of tight budgets.   Our commitment to protecting American patient safety, combating fraud, and returning much-needed dollars back to the U.S. Treasury and state treasuries is just one of the ways we’re working hard to help the American people.   And investing in anti-fraud measures pays off huge dividends.   All told, since the HCFAC Program started in 1997, DOJ and HHS have returned over $18.0 billion to the Medicare Trust Fund.   The return on investment for the HCFAC program, since 1997, is nearly $5 returned for every $1 expended.   Since 2008, the return on investment for the HCFAC program is $6.8 dollars for every $1 expended; in short, HCFAC is today an even better investment for the American taxpayer.

Despite all that’s been accomplished, we know that we can’t rest – more work needs to be done.   Secretary Sebelius explained that the landmark Affordable Care Act provides tougher measures to prevent fraud in the first place, as well as new resources.   The health care law also provides tougher rules and penalties, to help the Justice Department in stopping and preventing health care fraud as well.  

The successes outlined in today’s report and the new tools in the health care law motivate us to do even better in the months and years ahead.   The Department of Justice will continue to work vigorously with our partners at HHS, the private sector and in the non-profit world to ensure that all patients are not cheated when it comes to their health care and that those who commit fraud will be caught and punished.

Thank you everyone and a special thank you to Secretary Sebelius and her team at HHS for being such committed partners of the Attorney General’s and all of us at DOJ.   I’d like to turn it over now to CMS Administrator Dr. Donald Berwick.