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Office of the Press Secretary

For Immediate Release January 24, 1998
                      RADIO ADDRESS OF THE PRESIDENT
                               TO THE NATION

THE PRESIDENT: Good morning. Today I want to talk about our continuing efforts to fight fraud and abuse in the Medicare system.

For more than 30 years, Medicare has helped us to honor our oldest obligations to our parents and grandparents. And since I took office, our administration has made strengthening Medicare one of our top priorities. The balanced budget I signed into law last summer will extend the life of the Medicare trust fund for at least a decade. But to ensure that Medicare is as strong in the 21st century as it has been in the 20th, we must also do more to root out fraud and abuse.

Medicare fraud cheats beneficiaries and taxpayers out of billions of dollars every single year. It undermines the strength of this vitally important program. Since 1993, we've assigned more federal prosecutors and investigators to fight Medicare fraud than ever before, increasing fraud convictions by a record 240 percent. All told, we've saved taxpayers over $20 billion. And the Kennedy-Kassebaum legislation I signed into law in 1996 has given us new resources and tools to investigate, prosecute, and convict dishonest providers and medical suppliers.

On Monday, I'll send to Congress a report that shows just how effective those new tools have been. I'm proud to say that in the last year alone we've collected nearly $1 billion in fines and settlements for health care fraud. Money that would have lined the pockets of scam artists is now going instead to preserve the Medicare trust fund and to improve health for millions of Americans. We've increased prosecutions for health care fraud by more than 60 percent, and we've stopped health care fraud before it starts by keeping nearly twice as many bad providers out of the system.

Now, make no mistake, Medicare fraud is a real crime, committed by real criminals, intent on stealing from the system and cheating our most vulnerable citizens. Let me just give you one example.

In New York City, a Russian immigrant, believed by federal investigators to be part of an organized crime ring, defrauded Medicare of $1.5 million by selling substandard medical supplies to elderly people and billing Medicare for premium goods. We shut them down and put them in jail. They never should have been a Medicare supplier in the first place.

Last week, I put in place new regulations that require medical suppliers to post surety bonds to prove they're legitimate, solvent businesses. And to further insure that medical suppliers aren't defrauding Medicare, the Department of Health and Human Services will expand its site inspections of medical supply companies all over the country.

But we must do more to crack down on fraud and abuse in the Medicare system. The balanced budget I'll submit to Congress next month will include antifraud and waste provisions that will save Medicare more than $2 billion. First, it will eliminate overpayment for certain drugs by making sure doctors receive no more and no less than the price they pay for the medicines they give Medicare patients.

Second, it will ensure that when fly-by-night providers go bankrupt, Medicare is at the top of the list of debts to be repaid. And finally, it will bring down costs by allowing Medicare to purchase goods and services at a competitive price.

We will only win the fight against fraud and abuse in the Medicare system with the help of the American people. We know that patients and honest providers want to help crack down on fraud and abuse. Starting next month we'll make it easier for them to do so, with a toll-free hotline that will now appear on every statement Medicare sends out to every beneficiary it serves.

With these steps, we're making sure that the Medicare system, which has served our parents and grandparents so well, will also serve our children and grandchildren well into the 21st century.

Thanks for listening.