FOR IMMEDIATE RELEASE                                         DAG
THURSDAY, MARCH 2, 1995                            (202) 616-2765
                                               TDD (202) 514-1888

                REPORT SHOWS FOUR-FOLD INCREASE IN
                 HEALTH CARE FRAUD INVESTIGATIONS


     WASHINGTON, D.C. -- Federal investigations of health care
fraud quadrupled in the last four years, according to a report
issued today by the Justice Department.  The report noted that
Attorney General Janet Reno designated combatting health care
fraud a major initiative.
     Gerald Stern, Special Counsel for Health Care Fraud, said
both public and private health care plans had been defrauded
through false billing, kickbacks, unapproved devices and
unlicensed personnel.  Stern said as much as $100 billion dollars
may be lost annually in fraud and abuse.  In once case, patients
died when a Fortune 500 company sold unapproved heart catheters.
     "While most health care providers are honest and care first
and foremost about their patients' welfare," said Stern, "fraud 
is perpetrated by every kind of provider from individual
physicians to multi-state publicly traded companies.  We have
investigated fraudulent schemes by medical equipment dealers,
ambulance companies, laboratories, hospitals, nursing homes and
others who prey upon the system."
     "The Administration's efforts to ensure that all Americans
have access to quality health care at a reasonable cost will be
undermined if fraud goes unaddressed," he said.
     The Department reported the FBI had 1,500 cases under
investigation in the fiscal year that ended last October,
compared with 1,051 the year before, 657 in FY 92 and 365 in FY
91.  Two hundred anf forty one defendants were charged with
crimes last year.  One hundred and forty defendants were
convicted in cases that reached conclusion during the year.
     The report described frauds ranging from a billion dollar
mobile testing services scheme that ran thousands of unnecessary
and expensive diagnostic tests on patients who had come for
supposedly free or low-cost physical examinations, to
telemarketers who preyed upon the elderly by offering ostensibly
free knee braces and wheelchairs to senior citizens who neither
needed nor wanted the equipment, to cases in which ambulance
companies substantially overbilled for "intensive care"
ambulances to transport fully ambulatory patients to routine
follow-up medical appointments.
     The report stated that these kinds of frauds are most
effectively fought by simultaneously pursuing criminal, civil and
administratie proceedings.  This year's cases have resulted in
record jail sentences (over 21 years for each of several
defendants in one case), record financial recoveries (over $350
million in one case), groundbreaking administratively-required
future compliance programs and substantial recoveries for the
states (over $16 million in one case to more than two dozen
states).
     The report stated that improving coordination among DOJ
criminal and civil prosecutors, their state counterparts and
administrative entities is a key to effective health care fraud
enforcement.  The Executive Level Health Care Fraud Policy Group,
formed with the HHS Inspector General in November of 1993 to
coordinate federal health care fraud prevention and
investigations, is an example of this effort.  The report also
emphasized the need to continue close cooperation with state
Medicaid Fraud Control Units, which have special expertise in
this area.
     The report credited attorneys in the Justice Department's
Civil and Criminal Divisions and the U.S. Attorneys' Offices
around the country, the FBI, and the Inspector General of the
Department of Health and Human Services for their leadership in
this successful enforcement effort.  The Department also relied
heavily on the investigative and audit activities of the Defense
Criminal Investigative Service, the Office of Personnel
Management which supervises the Federal Employees Health Benfit
Plan, the Inspector General of the Railroad Retirement Board, the
Inspector General of the Department of Veterans Affairs, the
Inspector General of the Department of Labor, and the Office of
Labor Racketeering of the Pension and Welfare Benefits
Administration.  Vital support also was provided by the U.S.
Postal Service Inspection Service, the Drug Enforcement Agency,
the Internal Revenue Service, the Food and Drug Administration
and the Federal Trade Commission.
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95-115