For Immediate Release Contact:  Jim Campi
July 17, 1997 (202) 467-5300


(Washington, D.C.) – In letters sent today to the House Ways and Means and Senate Finance Committees, the Council for Citizens Against Government Waste (CCAGW) urged committee members not to interfere with the Department of Health and Human Services’ (HHS) efforts to audit Medicare fraud at the nation’s teaching hospitals under the Physicians at Teaching Hospitals, or PATH, initiative.

“We are concerned about recent articles that have surfaced in several newspapers across the country indicating that 40 members of Congress were pressuring Secretary Shalala to ease up on the PATH audit for Medicare fraud at 49 teaching hospitals,” said CCAGW President Thomas A. Schatz.  “Now is not the time to let anyone, whether it is a two bit hustler, or a major academic health center, off the hook.  Fraud is fraud no matter who commits it and we expect you, as a member of a committee that oversees Medicare, to encourage your colleagues to allow the Secretary and the HHS inspector general to continue their investigations without political pressure to do otherwise.”

CCAGW has long been interested in the issue of Medicare fraud.  In 1995, CCAGW released a report entitled “Medicare Fraud:  Tales From the Gypped,” which illustrated the rampant waste, fraud, and abuse occurring in the Medicare program.  The report helped justify the enactment of the anti-fraud provisions in the Kassebaum-Kennedy bill last year.  Schatz noted that exempting “select health care institutions from the audit process would undermine” the new anti-fraud laws.

At the time of the report, CCAGW estimated that Medicare fraud represents 10 percent of the program’s budget, costing taxpayers $17 billion each year.  However, an HHS inspector general report out today indicates that CCAGW actually underestimated Medicare fraud.  According to Inspector General June Gibbs Brown, Medicare fraud consumed 14 percent of the health care program’s budget in FY 1996, costing taxpayers $23.2 billion.

In a separate letter to Secretary Shalala, Schatz said “We applaud your efforts and strongly encourage you to go forward with ‘Operation Restore Trust’ and PATH audits.  When people steal from Medicare, they are not defrauding some faceless government bureaucracy, they are stealing from the American taxpayer.”  Schatz went on to say, “Unfortunately, until Medicare is reformed into a de-centralized, competitive, free-market system where individuals, instead of third parties, make the decision on where to spend their valuable health care dollars, fraud and abuse will continue to be endemic.”

CCAGW is a 600,000-member lobbying organization dedicated to enacting legislation to eliminate waste, inefficiency and mismanagement in the federal government.

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