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Attorney General Jeff Sessions Discusses Taking On Medicare Fraud

What the government is doing to fight back against scammers

Attorney General Jeff Sessions

Stephen Voss

The government is using Medicare data to identify potential health care-fraud leads, according to Attorney General Jeff Sessions.

Mr. Attorney General, we’ve been interviewing some of the members of the Medicare strike force. They do great work. But there are estimates that as much as 10 percent of Medicare is lost to fraud and waste. Do you feel that's an accurate number? 

I’m confident it’s more than that published 10 percent. My experience over the years is that agencies if anything underestimate the losses because it’s embarrassing to them. But they acknowledge substantial losses. We do have efforts ongoing to crack down on it. 

Some of the more blatant problems were highlighted in our Medicare fraud takedown recently where we had a sizable number of physicians that were overprescribing opioid pain pills which were not helping people get well, but instead were furthering an addiction being paid for by the federal taxpayers. This is a really bad thing. I would ask seniors particularly to be careful because they don’t want to be in a position of getting pain pills from a doctor and then letting other people get those pills from them.

Is it time to take Medicare fraud as seriously as we took the war on drugs and went after the cartels some years back, or organized crime — a massive federal campaign to go after Medicare fraud?

I think it’s time for us to consider that. The amount of money is so massive. Maybe our traditional systems aren’t aggressive enough. A lot of the cases are hard to bring. They take a lot of time. When you look at it overall, it is billions of dollars at stake. 

It’s a little bit like these shysters who use direct mail and other ways to defraud people. They will keep doing it until they’re stopped. In other words, if we don’t stop them, they will keep finding more victims and seducing them. It’s the same with medical fraud; they don’t stop at one scheme or one success, it emboldens them to try to even do more.

The AARP Bulletin did an investigative report on that last year where we found people on Medicare who were being approached by people on the street asking if they had any extra pills to sell. Have you seen that? 

Absolutely. I know a personal incident where a person had terminal cancer and they passed away and there were 40 powerful pain pills in their room and the next morning, the pills were gone. They were probably $80 a pill on the street. 

We’ve talked to former prosecutors who say what makes it hard to stop Medicare fraud is it’s a system where money is paid out up front, then fraud is looked for later — ‘Pay and chase’ as it’s known. Would you advocate changes to how Medicare billing is done? 

That’s a difficult question. While it might be nice to be able to review claims on the front end before they’re paid, since Medicare pays over a billion claims each year, such a review process could end up delaying payments to legitimate and law-abiding providers, and possibly affect the delivery of critical services to Medicare beneficiaries. Given that, the Department of Justice should continue aggressively pursuing health care fraudsters, either criminally or civilly, and holding them accountable to the fullest extent of the law.  

There are private law firms that mine the Centers of Medicare and Medicaid Services data looking for potential fraud cases. Then they go out and recruit whistleblowers for recovery lawsuits. Is the government doing enough of that type of sifting through data looking for fraud?

While I cannot speak to what private law firms are doing, I can say that the government, including both the Department of Health and Human Services and the Department of Justice, is using Medicare data to identify potential health care-fraud leads generally, as well as to combat the opioid epidemic in particular. For example, just last August, the [Justice] Department launched the Opioid Fraud and Abuse Detection Unit. This new unit focuses specifically on opioid-related health care fraud and uses data to identify doctors and other parties contributing to the prescription opioid epidemic.

I know Medicare is not administered by your department. But agents and prosecutors under your authority are involved in fighting fraud in the program. Do you feel the government has a good handle on just how much loss there is in Medicare? The government doesn’t issue an official estimate, and some private analysts say no one knows the scope of the problem. 

The Department of Health and Human Services would be in a better position to answer that question. The bottom line is far too many taxpayer dollars are lost to health care fraud each year and that we must remain vigilant in our efforts to combat such fraud. Every dollar lost to health care fraud is one dollar less that we have to pay for critical services needed by our Medicare and Medicaid beneficiaries.

The financial services industry has done an excellent job at cracking down on fraud. Credit card companies, for example, will reject my card if someone tries to make a purchase outside my normal geographic area or for a product that is outside my normal purchases. Why can’t Medicare and other programs do the same, when it comes to sham billing by doctors, or multiple procedures billed to the same person, maybe in different states?  

The Department and its partners work diligently to identify Medicare fraud schemes and patterns and hold accountable those medical professionals who abuse the system. Through these efforts, the Department’s prosecutors have stopped many sham billing schemes and recovered losses to Medicare caused by fraudulent practices.  

Based on what we hear at AARP, older Americans are most often the target of scam artists. Why is that?      

There’s no doubt about that. These scam artists are just despicable people. What they do is play on the trust of good and decent people, many of whom have very limited funds, and they extract those funds from them for blatant lies while pretending to be decent people and it is to me one of the immoral crimes that we see. I’ve always felt that. It does not ever seem to end. Many of the scams when I started in the 1970s as a federal prosecutor are the same ones coming up today.

Do you have any insight as to why older people seem to be a special target? We get the impression that our members over 50 and often in their 60s and 70s get a higher volume of these.

There is no doubt they target the elderly, sometimes because people may be lonely, sometimes it’s because they grew up in a time when you trusted your neighbor and people that you deal with. They just tend to be more willing to believe stories and at some point, people may lose some of their sharpness as they get very elderly and can also be manipulated unfairly. It’s a big deal, I think.

What should we look for out of federal law enforcement in the near future to address fraud against older people? Any new laws, tactics, or technical breakthroughs to talk about?

The Department of Justice continues to use data analytics to identify providers with aberrant billing patterns. We announced the formation of the Opioid Fraud and Abuse Detection Unit in an effort to harness these analytic tools to combat the opioid epidemic. Often, these opioid cases involve traditional health care fraud. 

As part of the Elder Abuse Prevention and Prosecution Act, which the president signed into law last October, I appointed a career prosecutor as the Department’s Elder Justice Coordinator to support and coordinate the Department’s many elder justice efforts. I also directed the Department to appoint an Elder Justice Coordinator in every United States Attorney’s Office around the country. Having an Elder Justice Coordinator in every district will allow us to work on the elder justice issues most pressing in those communities while also collaborating with our state and local partners in combating all forms of elder abuse and fraud. 

Some AARP members, especially those over 65, frankly feel battered by the assault of scammers and con men who are calling them constantly — even if they are on No Call lists. Is that just the price for living in a free society, or can more be done to stop scam calls?

Typically, those who perpetrate egregious fraud schemes steal money from senior citizens without regard for civil “Do Not Call” laws and regulations. The “Do Not Call” laws provide civil penalties for violations, which will deter some but not all unethical telemarketers. The Department’s experience demonstrates that many individuals who purposefully target the elderly for deception will not stop until arrested and incarcerated. More criminal prosecutions will result in fewer scam calls.

Identity theft is another major concern of our readers. What more can federal law enforcement do to arrest and convict identity thieves?

A number of the cases recently announced as part of the elder fraud sweep charged identity theft victimizing senior citizens. The U.S. Attorney’s Offices across the country have taken the lead on these cases, typically charging aggravated identity theft, and there are more to come. I have directed every U.S. Attorney’s Office to designate an Elder Justice Coordinator — 94 in total — to spearhead efforts in local communities nationwide to protect seniors against these sorts of schemes and the many others that target older Americans.

The Department also has ramped up its efforts to target identity theft occurring on a large-scale level, by investigating and prosecuting individuals who steal financial information from hundreds or thousands of individuals at one time and use the information to commit financial crimes. These efforts coincide with the Department’s efforts to investigate massive data breaches and those who misuse the personal information obtained from those breaches.

A lot of the fraud schemes that target our readers, older Americans, seem to be based overseas. Do you need new authority to combat that?  

It is true that many of these, what we call transnational criminal organizations, TCO, are sophisticated, skilled at their work, they know how to manipulate the feelings of people and to extract money from them and when somebody raises questions or has a complaint, they have a canned answer to every complaint that’s raised. They create the impression of legitimacy.  

Many of them are abroad. They are hard to extradite, but I’ve told our team we want to file more extradition cases and then it leaves us in a position to pressure countries who are hosting these fraudsters and to demand that they take action. If we haven’t indicted anyone in that country because we think there is a slim chance of getting them back, then we don’t have as much leverage to demand cooperation. We can sometimes get the State Department, our ambassadors to go to their local law enforcement. You’ve got this large group of people that are defrauding us of millions of dollars.

So, we will see more extradition requests?

That will be our goal and it will be one of our policies. 

These cases aren’t easy, but our team has had some success in doing that. In this whole effort, Attorneys General around the country are effective allies in this effort. They take elder fraud seriously. Many of the district attorneys and police chiefs and police officers can help do the investigative work, but you are correct, often where the money is sent is either abroad or it’s a drop box type of situation with a lower level person that’s doing that and the real culprits are abroad — which does make it difficult.

A growing number of scams that target our readers involve their smartphones and their computers. Does your office have all the tools it needs to go after those crimes?

I think perhaps there could be at the most basic level that you’re talking about, but we have a great challenge at a higher level and that is the ability of criminals to go dark, to hide their transfer of money, hide their communications and even the FBI can’t penetrate some of these systems. It’s very difficult to do so. In addition, you’ve got the currency, the electronic currency. Bitcoin is the most ready example. Some are even more secretive and secure than Bitcoin. We sense that criminals are beginning to use that, which makes the investigation and following the trail to find the money even more difficult. We may have to have legislation on that.  

In fact, if your cell phone is encrypted, which can be readily bought now, phone companies are telling us that they can’t open it. If you have a house and you have evidence in it and a judge gives a search warrant to the house, if you don’t have a key, they could even knock the door in, but you have a phone now that has become something that is unbreachable. It’s perhaps the first time in law enforcement history that we’ve had significant amounts of evidence not even obtainable when you have a court order.

So, do we need new laws?

New laws could be helpful. Right now, I would say a difficulty arises from how hard it is to identify the culprits in these cases and lack of resources to invest in these time-intensive cases. Maybe we can have an enhanced partnership with our State Attorneys General ... and also, we’ve got the great resources of our state and local police. Many of our police officers and sheriff’s deputies have master’s degrees and are highly computer literate. Marshaling all those resources with the federal/interstate capabilities that the local police department doesn’t have ... can make a difference.

Would you advocate increasing the penalties on crimes against older people?

I do believe the penalties should be a bit more severe. I think this is just a despicable crime because it’s so calculated, it’s so cold-blooded and they know they’re taking advantage of people and they know they’re lying to them just to get their money and they’re never going to produce what they promise to produce, and they do it so many times. They keep on doing it until they’re put in jail, basically.

What can your office do about that?

We have an opportunity to advance sentences and guidelines to the Federal Sentencing Commission. It’s not mandatory, but they can do that. We have a press today to reduce prison, reduce time. Particularly they say, “White-collar crime people don’t need to be in jail,” but these kinds of people are so disreputable and so evil really that the only thing they understand is the threat of incarceration. This is a particularly good example of why the old saw that a nonviolent criminal doesn’t need to be in jail, I don’t agree with that.

Let me give you a chance to be optimistic about what’s happening. What makes you the most hopeful about the efforts you’ve seen in the federal government and Justice Department to protect older Americans from fraud.  What’s happening that would be good news for people?

Well, Congress has done some work on this. They’ve passed a number of pieces of legislation. Senator Grassley and Senator Susan Collins have done some work, but frankly, one thing that was very encouraging to me and to my whole staff is, when we announced this big fraud takedown recently, how much public support there was for it, how much interest all three major networks gave to it, how local stations and papers interviewed local victims that we didn’t even know about and reported on it. I think it says to us that we have more support than a lot of people have thought and if we press this issue and educate people and warn them, fewer people will succumb to the temptations or the fraud, and we’ll catch more fraudsters, too.

You’ve actually had a series of big takedowns. You had one on Medicare fraud last year and then you had one that revolved around prescription opioids and then the more recent one on various types of scams like the lottery scam and things like that. Is this part of a strategy to ratchet up public awareness and send a message to criminals that we’re taking this more seriously than we have?

We know that educating the public helps make them more resistant to crime. We know that the fear of prosecution does reduce crime. It’s been proven for centuries. We want to continue to do that. We’re learning. Technology works against us a lot of times, but technology can help our people sometimes penetrate and find out schemes at an earlier stage. We’d like to stop these schemes sooner rather than later. Some of it, the longer it goes the more victims there are.

What can AARP’s members do to help the federal government’s efforts to combat this kind of crime? Do you have any advice for people?

Yes, you just have to be wary today because the person you’re talking to may sound like a neighbor or somebody that’s respectable. They’re often highly sophisticated criminals with proven skills at taking advantage of people. Do not be embarrassed to report a loss. You have to bring it forth. 

There are also schemes that are particularly embarrassing like romance schemes. People on the phone talk about getting together or marriage and lonely people often listen to that and the next thing they know [this person on the phone] their daughter needs money for a hospital visit, they’re going to die or they have some other emergency. It’s just very important for all of us to be on guard. I would advise seniors that anything that they’re concerned about like this, they should not hesitate to call their family members or maybe a neighbor they trust and seek advice before ever sending money. If you haven’t ordered something you want to pay for from a reputable seller, you shouldn’t be sending money out or giving your credit card out over the internet.

In our office, one of my top counsel's grandmother got a call. We were in a meeting and the story was that my counsel was in jail and the grandmother was asked to send money. She was very upset about it. I understand she’s still upset two weeks later.

My chief of staff’s grandmother was hit up with this, and we’ve had two people in the Public Relations Office who have had problems with their grandparents.

So, it can happen to anybody.

It can happen to anybody. People need to be on guard. Frankly, it’s not going to be possible for us to shut down all of these people, but we can do a better job and we intend to.