Today, Attorney General Eric Holder, Health and Human Services (HHS) Secretary Kathleen Sebelius, and Federal Trade Commission (FTC) Chairwoman Edith Ramirez met at the White House to kick off a comprehensive interagency initiative to prevent, protect against, and where necessary prosecute consumer fraud and privacy violations in the Health Insurance Marketplace. Representing key state partners in this critically important effort to protect consumers were Maryland Attorney General Douglas Gansler and Kansas Insurance Commissioner Sandy Praeger. Senior White House officials also attended the meeting.
Meeting participants reaffirmed their ongoing commitment to protect consumers from potential threats in this area. Building on a successful infrastructure that already exists, the interagency officials highlighted the following new initiatives: 1) the dedication of the Marketplace Call Center as a resource and referral to FTC for consumer fraud concerns, with trained Call Center staff to effectively refer consumer threats and complaints; 2) connecting consumers to FTC’s Complaint Assistant through HealthCare.gov; 3) development of a system of routing complaints through the FTC’s Consumer Sentinel Network for analysis and referral as appropriate; 4) establishment of a rapid response mechanism for addressing privacy or cybersecurity threats and; 5) ramping up public education to empower consumers and assisters to know the facts and avoid scams.
“Today we are sending a clear message that we will not tolerate anyone seeking to defraud consumers in the Health Insurance Marketplace,” said Health and Human Services Secretary Sebelius. “We have strong security safeguards in the Marketplace to protect people’s personal information against fraud and we will work with our partners to aggressively prosecute bad actors, just as we have been doing in Medicare, Medicaid and the Children’s Health Insurance Program.”
The experienced and dedicated professionals at HHS, DOJ and FTC, together with their state and local partners, are ready to anticipate and respond to the law enforcement challenges that may arise with the launch of the Marketplace. They will be using tried and tested methods for combatting fraud associated with other government programs, so that consumers can confidently and securely shop for affordable health insurance beginning on October 1.
“I am proud of the proactive approach that the Justice Department is taking with our colleagues at HHS and FTC, and with the state law enforcement community, to prevent and detect consumer fraud in the Health Insurance Marketplace,” said Attorney General Eric Holder. “Going forward, we intend to share information, work cases, and hold wrongdoers accountable as we always do. We plan to use our tried-and-tested collaborative methods to ensure that we can identify trends and take swift action against those seeking to take advantage of consumers.”
Consumers who report that their personal information may have been compromised will be given information about steps to take to prevent or respond to identity theft. If a consumer reports suspected fraud, his or her complaint will be entered into the FTC’s Consumer Sentinel Network database, which is used by federal and state law enforcement agencies to track potential fraud activity. Federal law enforcement officials will be able to monitor complaint activity for trends within and across all 50 States.
"At the FTC, we know all too well how scammers invariably try to take advantage of developments in the marketplace and new government programs," said FTC Chairwoman Edith Ramirez. "We will be vigilant as always in cracking down on this type of opportunistic fraud."
Consumer fraud experts from across state and federal agencies will continue to meet on a regular basis to monitor potential fraud associated with the Marketplace and ensure the strength of preventive measures.
“State Attorneys General have extensive experience working proactively with our Federal law enforcement partners to anticipate and respond to consumer fraud,” said Maryland Attorney General Douglas Gansler. “We look forward to continuing to partner with the Justice Department, the FTC, and HHS to educate consumers, investigate cases, identify patterns associated with different types of fraud, and hold scammers accountable.”
Steps have already been initiated to prevent and respond to individuals attempting to take advantage of the public during health care implementation. These measures include:
• Reporting fraud mechanism: A new feature of the Marketplace Call Center (1-800-318-2596, TTY 1-855-889-4325) will now enable individuals to report fraud simply by calling the 1800 number. Call Center operators have been trained to take a fraud complaint, and refer them to FTC’s Consumer Sentinel Network.
• Creating new pathways: HealthCare.gov offers easy access to connect consumers to FTC’s Complaint Assistant.
• Establishing a routing system for complaints through a centralized database: Routing complaints through the Sentinel Network will ensure Federal, state and local law enforcement have access to consumer complaints and can analyze and refer those complaints as appropriate.
• Protecting personal data: Building on the certification of the Health Insurance Marketplace’s data hub on September 6, 2013 as in compliance with the stringent security, privacy and data flow standards developed by the National Institute of Standards and Technology - the gold standard for information and independent security controls assessment - the interagency officials have also established a rapid response mechanism that will be employed in the unlikely event of a data security breach.
• Empowering consumers with information: Building on a proactive effort to inform consumers about potential fraud and privacy threats, the federal government is releasing new educational materials to empower consumers and assisters who are helping consumers navigate the Marketplaces. They include online tip sheets like Protect Yourself from Fraud in the Health Insurance Marketplace and Tips for Assisters to Help Consumers Navigate the Marketplace. The materials remind consumers that there is free assistance available to navigate the Marketplace and that they should be suspicious of persons who ask for a fee before providing assistance.
In addition, the FTC and DOJ are hosting events this week in anticipation of the launch of the Marketplace:
• Thursday, September 19th, the FTC, will host a roundtable in Washington, DC to discuss how to empower and protect consumers from scammers with the advent of the Health Insurance Marketplace. The roundtable will bring together experts on the health care law, federal and state consumer protection officials, representatives of legal services and community-based organizations, and consumer advocates to discuss key features of the law, state approaches to implementation, and how to help consumers avoid potential scams.
• Friday, September 20th, DOJ will host a law enforcement meeting to convene state and local officials. This meeting is part of ongoing efforts urging state AGs to work with HHS and federal, state, and local law enforcement to mount a substantial outreach campaign to educate consumers about how to prevent scams and fraud and protect their personal information in the Marketplace.
These comprehensive preventive and detection efforts build on the extensive experience and federal, state and local intergovernmental infrastructure that has protected consumers from fraud.
• Since its creation in 1997, the HHS Senior Medicare Patrol has educated to more than 28 million Medicare beneficiaries and counseled more than 1.3 million individuals about specific concerns, one-on-one. Coupled with other outreach efforts, Medicare’s toll-free customer service operations sent nearly 45,000 inquiries to law enforcement partners for fraud investigations in 2012 alone. These direct-from-consumer leads ultimately supported the Administration’s work to prosecute criminals, returning $6.7 billion to the Medicare Trust Fund in the last four years.
• In the last several years, the FTC’s Bureau of Consumer Protection has put a stop to over 50 health fraud scams, government grant schemes, and mortgage relief services frauds, and has independently secured nearly $6 million in monetary relief for consumers. The Bureau conducts investigations, sues companies and people that violate the law, and works to educate consumers and businesses about their rights and responsibilities. The Bureau coordinates its work in these areas with Federal, state and local partners.
• Over the last four years, DOJ has successfully prosecuted over four thousand defendants in identity theft and aggravated identity theft cases, and convicted over 200 defendants in advance fee fraud cases, over 500 defendants in consumer fraud cases, and over 100 defendants in telemarketing fraud cases.
For more information on CMS’s efforts to protect consumers in the Marketplace, please visit: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-Sheets/2013-Fact-Sheets-Items/2013-09-18.html