huge fines. johnson and johnson was charged the texas attorney general charged them with funneling kickbacks to texas health officials. j' . . prices for allocating market shares for certain vitamins. and aventis paid $95 million to settle charges that it violated

the false claim act. wythe, just this year, 16 states have joined in two whistleblower suits against wythe, and the drug company failed to pay hundreds of millions of dollars to rebates to the medicaid program. i hear a lot about fraud and a lot about waste, but what i don't hear about is the role that the major corporate giants in the health care industry are playing in ripping off the american people to tunes of billions and billions of dollars. i don't know why we don't talk about that issue? let's start with the drug companies and huge fines after huge fines and be clear, especially under the bush administration whose competence is not widely respected and also known as being sympathetic to corporate interests, and every fine, every charge we have seen here, you can multiply many times over sitting out there with an aggressive attorney general's office might have gone after. look at some of the private insurance companies that some people here see as a model that we want to support.

united health, 2009, united health paid $350 million to settle lawsuits brought by the ama state medical society and doctors and patients. the lawsuits allege that the companies shortchanged consumers and physicians when paying for medical services outside of the preferred network. wellpointe, in 2009, cms barred wellpointe from participating in medicare part d and medicare advantage stating they have demonstrated a longstanding and persistent failure to comply with the requirements of the proper dispensation of the medicare program. aetna in 2003, they agreed to settle a class action suit brought by physicians by paying a $470 million in overhauling business practices that the doctors say have shortchanged patient care. humana in 2000 paid a fine for

overcharging government. and sigma paid $24.5 million for allegations of medicare fraud. all right. that is just some of what the insurance companies are doing, and them you have private hospital chains. i think that many people here are familiar with that in fact that in 2000, the hospital corporation of america agreed to pay $745 million. $745 million to settle civil charges that it systematically defrauded medicare/medicaid and other federally-funded health care programs. later that year, hca agreed to pay criminal charges and fines of $90 million. and finally in 2003, hca agreed to pay $631 million more in civil fines and a total of $7.1 billion. tenant health care corporation, 2003, they paid $54 million in fines to settle allegations of

two doctors working in reading, california to, perform unnecessary cardiac procedures on patients in the interest of profits. imagine that. cardiac surgery in order to make money when that surgery was not necessary. 2006, tenant agreed to pay $725 million in cash in order to resolve claims that defrauded the federal government overbilling medicare claims over a six-year period. and on and on and on it goes. so, when we hear, and mr. chairman, i would ask unanimous consent to enter this information into the record. >> without objection. so ordered. >> now, mr. president, i got a little bit tired of hearing how the government can't do anything. government can't do anything. well, you know what, what you have seen for many, many years is the systemic effort on the part of private insurance companies, private drug companies, private for-profitable hospitals to the tune of many, many billions of dollars of ripping off the american people, and the taxpayers of this country.

and then you wonder why in "the new york times" people say overwhelmingly they want a government plan to compete with the private sector. no kidding. isn't that a shock. very few people in this country have a great deal of confidence in private insurance companies, and they know we are paying the highest prices in the world for pharmaceuticals we are ripped off everyday by the drug companies. i say these words, mr. president, i don't have an amendment to offer to deal with this stuff, but clearly we have to think about how we are going to stop the illegal, systemic illegal behavior of many of the large corporate interests who are costing our people, our taxpayers billions and billions of dollars and that is something that we will have when we get to the floor of the house. but i thank you. >> thank you, senator. >> mr. chairman. >> i just wanted to respond briefly to your points which br to your points which weren't in response to my point, i don't

think. my point was that we should proceed with health care reform, but it should be based on the template that the president has suggested, which is that everybody gets covered, the people don't have to give up their own insurance. this bill as brought forward has been scored leaving 30 of the 40 million people that don't have insurance covered. it is not as radically expanding the cost of health care by $2.3 trillion. it's more expensive on the additional items come forward. by having 15 million people move off their present plan. there is language out there which i'm a sponsor of which is generally bipartisan which accomplishes all the president's goals, which we could have

marked up from. widen benefits. there is language which accomplishes all the president's goals we could have marked up from. why we chose to mark up from a bill which fails on all the main proposals of the president is something i have trouble understanding. we can do health reform and in a bipartisan way. the president set out very legitimate goals which we all subscribe to. what energized by concern was this new entitlement that's been put in this bill, buried into this bill, which scores positively in the first ten years, but dramatically aggravates what is an unsustainable information we face as a nation. it aggravates by $2 trillion. i'm not suggesting we not proceed and i'm not trugting we truncate the exercise.

i say we go back to what our purposes are as being the core drivers of our process here. >> thank you, senator. senator harkin. >> thank you, mr. chairman. first i want to respond to senator gregg. i just listened to what you said the president wanted to accomplish. there is one way to accomplish that and that is to a single payer national insurance health program. very simple. >> if you want to bring that forward. why don't you bring that forward? we need to bring forward senator coburn's proposal and my proposal and we'll be working off product that gets where you want to go, where i want to go. this product we are working off today does not accomplish what a single payer would accomplish. >> i say to my friend i'm sure we'll have a chance to vote on it on the senate floor, one way or the oefrmt other.

i want to say to senator sanders, thank you very much what you just brought to this committee. we have to have a dose of realism once in a while as to what we are talking about here. when you pointed out that the inspector yen vorted that 80% of the insurance companies participating in medicare part d overcharged subscribers and taxpayers an estimated $4.4 billion, that has to be factor into our thinking process around here and how we are building this system up. we do what we can around here. while i have long been a supporter of a single payer, my record is clear on this going back to the early '90s, that that was the simplest, strayed forwd way to do things. i probably recognize there aren't the votes for that. that doesn't mean we shouldn't talk about it and let the american people know what it would mean to have a single payer type of a system in this

country. i think people ought to factor that into their thinking process. and it is true this recent poll, "the new york times"/cnn poll said 72% of the american people responded positively to a public plan like medicare. they even use the words "like medicare" in it to describe it. 72% said yes, they would be for a public plan. well, i hope and trust we will come out of here with a strong public plan. out of this committee and i'm sure we will. and hopefully we can keep that as we go through melding the two bills and on the floor and on to the president's signature. while i recognize it may not be there, i've said before i want a chance, perhaps on the senate floor, to vote for a single pair. not that it's going to go anywhere, i understand that. i just, you know, when we finally get to that 20, 30, 40

years from now, i probably won't be around. i want my kids to say my old man voted for that a long time ago. i do want to have that opportunity. i thank senator sanders again for bringing in a little dose of kind of reality as to what the parameters are on health insurance. mr. chairman, our staffs have continued to work on these, on the prevention and wellness title. they worked out the two amendments number 50 and number 51 and i would ask unanimous consent they be ado. ed as modified. >> without objection they be adopted. thank you, mr. chairman. it's been an interesting discussion this morning. our side is going to expedite a little bit the morning process because senator coburn is also

in the defense authorization mark-up senator mccain is in. as seen what happens with a number of his amendments, i want to make just a couple of comments on the bill and a couple of comments on some of the amendments that could have been offered and we can have senator mccain come in and present his amendment, i guess. i want to thank senator sanders for his comments. i do need to point out the criminal charges and settlements that he described involved medicare and medicaid, both which are government-run plans, and perhaps the problem is with government-run plans and their underinvestment administrative controls and distortions that are caused by their price controls, and i would also like to point out all of those cases were mentioned were ones that were prosecuted and won during

the bush administration. so there has been some oversight and some activity there. the difficulty with the fraud and abuse section that this bill has is that it drastically increases the cost of health care for large employers. the bill imposes new restrictions in the name of combatting fraud, but it's a clear attempt to limit the ability of employers to offer uniform benefit packages across the country. that reduces administration costs. you eliminate that you increase administration costs, you increase the cost of health insurance. if these changes are enacted, employers may not be able to provide comprehensive targeted plans for their employees. now the authors of the bill say they would like to focus on fraud and abuse in the private sector, not the public sector. that seems to be a theme throughout the bill, the prevention section requires the centers for disease control and prevention to evaluate employer

wellness plans with federal dollars, and now they want to combat fraud in the private sector with federal dollars. here is an idea i would like to throw out. let icons trait on combatting fraud in the government-run programs before we spend tax payers' dollars on saving money in the private sector. those cases that instead we will spend money on cap bedding and outside the federal government. i also included in this bill provisions relating to false claims. it states that any employer or insurer makes false claims will be penalized in such maybe under the jurisdiction of the department of justice. this will lead to one thing which will be more frivolous lawsuits. there is no desire to do

anything in a medical liability area. we will shift at all to the judiciary committee will probably not handle it. if we want to combat fraud we should strike that section. that is where we find the real fraud in the real savings. a number of states have done that in the medicaid area. they have made advances. but i just talked to a man who move from wyoming to utah to handle that situation. he talked to me about what could be done in the medicare areas as well. the bill before us establishes a senior advisor to the secretary of health and human services and another to the attorney general. the kennedy-bobbitt bill does not combat fraud. it creates more bureaucracy. -- the kennedy dodd bill.

the department of justice don't need advice on how to combat fraud. they need resources to combat fraud in the government programs. the bill creates another council to discuss issues relating to fraud. these departments don't need to further discuss fraud and abuse. they need resources to combat it. there isn't anything in this bill that will actually reduce fraud. combatting fraud should be a bipartisan issue. i think our side has raised some amendments, but we know they are not going to be included in it. senator coburn has, i think he had nine, but there are six he is particularly interested in. to reduce medicare fraud and i could never do an adequate job of discussing these and won't even attempt to, but he points out that the stop act is a more

effective way to prevent fraud and abuse. all of his amendments are aimed at the medicaid and medicare fraud and we know from state experiments which deal with medicaid because that's the one they have to pay a portion of and they're extremely interested in, that there are huge opportunities there. even suggests a doc fraud squad which would be a demonstration program where there would be health care professionals that would conduct random visits to health care practices and attempt to purchase pharmaceutical illegally, participate in hospital visits, inspector general would be required to follow up on any notable findings and refer individuals to appropriate state and/or federal authorities. and of course, health courts

comes up again, state health courts. state medical liability situation. senator gregg has much more technical amendments he would offer, but we just ask you to look at because the kennedy bill would open up the current p preemption of state fraud laws. his amendment would strike that provision and maintain the current law. we would be making it extremely difficult for employers to comply if they have employees in most of the states. another one of his amendments gives the department did, the kennedy bill gives the department of labor authority to sake summary seizure action on plans in a financially hazardous condition and his amendment would strike that. that way the department of labor

wouldn't have the authority for seizure action on health insurance plans becse that shuts them down and eliminates some of the service that might come to the people instead of some kind of a mechanism for making sure that the people would continue to be covered. all of his amendments deal with the cease or seizure parts of it. i hope the other side will take a look at those and see if there isn't, as i mentioned, there's at the least a glimmer of an idea in these that have some basis for a need and hopefully could have something done. he expands the aris or seizure.

senator hatch has the need for separate health care offices within hhs and department of justice. none of those will be offered this morning, but i would ask you to take a look at them, see if there's some value in them, some way they can be used and some way that we can switch from placing this emphasis on the arisa companies that operate over a variety of states so we are not making their health care more expensive and more administrative-oriented rather than health care-oriented. i thank the chair and i think that leads us to the mccain amendment. >> if i could, i appreciate that very much. as i understand it here, these are -- obviously, i'll have the staff take a look at these proposals. as i said earlier in the week when the issue was raised by i think it was senator coburn raised the issue, we wanted to

proceed by doing title of title by this legislation so we have a manageable way by which to proceed. we still have remaining obviously to deal with the long-term care issues because of the scoring problems and we still have title i to come back to, as well. those matters will be left open until the following week, the week we come back from independence day recess. i also made it clear that i wasn't going to be so insist event upon that closing out titles that i wouldn't consider because of circumstances of matters that come up. i intend to live by that promise, as well. i would ask colleagues again, and i respect the fact we all have conflicting obligations around here as evidenced by several of our colleagues that are off doing other things this morning as well as trying to be here. again, i'm very grateful for the attendance we had in this matter over the last two weeks, and with another week to go when we

get back, would be critically important. i understand why they can't be here. i understand the intent. you have my commitment and the staff's commitment we'll go over these amendments. i would like to mention if i could, regarding the fraud and abuse section. that is the majority of the amendments filed to this title make policy rather than authority to medicare and medicaid. while we clearly are stepping on each other's jurisdictions, an awful lot of this is more appropriate in the jurisdiction of the finance committee. that's not to say we can't be heard on it, obviously. i think most of my colleagues are aware of that. so there is no question about the importance of dealing with fraud and abuse. and public programs, as well. i don't think it's our intention -- >> just briefly, thank you. briefly. i wanted to respond to mr. enzi. i get tired, i think the american people do, about hearing the word medicare fraud.

the implication is we have people who work for medicare, who work for the government that are dishonest. we've done little research. it's not defensive. i am not aware of major examples where people who work for medicare, work for the government have been dishonest, have been on the take. there may be. when we talk about medicare fraud what we are really talking about is pharmaceutical industry fraud against medicare. insurance company fraud against medicare. private hospital insurance fraud against medicare. my hope is that we'll refer to fraud with medicare and medicaid we put our finger, who is committing the fraud? it's not medicare. i would hope we rephrase our language in that regard. >> i think it's medicare and medicaid that have the obligation to be doing the enforcement of it. >> that's fair enough. we don't and we can make that better. for example, if somebody doesn't pay their taxes and they go to jail or they don't get a

government job, we don't say it's the irs fraud. we say you didn't pay your taxes. let's put our finger on the people responsible for the fraud. we can argue and i agree with you, we want to do better job and i think that is what this bill is trying to do, combat fraud. the people committing the fraud is not medicare and medicaid. it is private corporate interests. >> trying to quantify this is not easy, but just to briefly share with my colleagues is how much fraud is out there. 1990s, the fbi estimated 10% of all health spending was lost to fraud and abuse. that is an fbi conclusion. the national health care anti-fraud association estimates that 3% of all health standings is lost to fraud. whether it's 8% or 10%, it's a significant amount. some suggest fraud and abuse is only a problem in the public sector. senators sar bain -- senator

sanders, i think, answered that clearly. how well these programs are managed is very important. i authentic your analogy to use the suggestion where fraud and abuse is occurring is misplaced. department of labor is a key enforcement agent. as of may 2009, a month ago, they initiated 768 and 207 criminal investigations obtaining monetary penalties of more than $205 million. they currently have 73 civil and 60 criminal investigations that are ongoing. criminal activities often organized crime operations result in employers and individuals losing millions. organized crime is not employees of medicare or medicaid, it's the people taking advantage of the system and scamming it at the disadvantage of people who count on these programs. the criminal division to the extent i'm aware -- there may be exceptions of this and if there are, it's important for us to know it, are investigating

employees of the department of health and human services or the medicare program itself. i suspect most of these cases are focusing on nongovernmental employees, the people abusing the process is where the bulk of it is. my friend from arizona here and i proms we'd reached a point here, john, and i will stop here. >> mr. chairman, i don't want to interrupt the flow here, but i do want to respond to senator enzi's arguments, if we can do that. >> can i say to my colleague, i apologize. i'm in the middle of the mark-up of the defense authorization bill down below and i want to apologize to all members, but we are trying to wrap this up, obviously today, as the chairman is trying to wrap it up. i appreciate your indulgence and thank you. i thank the chairman for your courtesy. this is a simple amendment. it's one issue that's been banging around for years. no matter what happens today, we

will win sooner or later because it's in the interest of the american people. if the amendment could be handed out, i would appreciate it. >> i assume this is the one -- >> mccain number iv. >> it is on direct importation? >> yes. one of my favorites. >> normally when this comes up we either have senator cochran or roberts who deals with the safety section which i assume you do not have in that amendment. >> this amendment requires the secretary of health and human services to verify the safety and importance of prescription drugs. i don't know what more you want in it. if we could get the amendment out maybe it could clarify it for you. >> appreciate it. >> obviously, i don't know of any senator who would propose an amendment that would allow unsafe or prescription drugs

into this country that did not meet all the safety standards. so, mr. chairman, the amendment would provide americans access to safe and imported prescription dugs at much lower price. it would lower the overall price of this legislation due to the significant savings it would provide americans and the government. the amendment would, one, waive the food and drug administration administration's limitation on the importation of prescription drugs from outside the united states. require the secretary of health and human services to verify the safety of imported prescription drugs, prohibit manufacturers from engaging actions to restrict, prohibit or delay the importation of a qualifying prescription drug, and four, set forth provisions governing the purchase of prescription drugs from an internet website. they've been found, imported prescription drugs have been found to be 55% less expensive than those sold in the u.s. at a

local pharmacy. the congressional budget office has estimated american consumers could save up to $50 billion over the next decade. if they were able to buy imported drugs. according to in april 2008 poll by kaiser public opinion, over half all americans say they take prescription medicine daily. there is no better stimulus for the 50% of all americans who take prescription drugs daily and for the millions more americans who are prescribed medicine when diagnosed with an illness. now we are going to hear -- and by the way, i wish that my colleague and friend senator dorgan were here. he is far, far better at this than i i have seen him about 30 or 40 times and always enjoys seeing his act again. he does such a great job. i think it is lipitor he carr