Citing billions of dollars in costs from fraud against private and public health plans, a Delaware senator is seeking to strengthen the government’s role in investigating and prosecuting individuals abusing the system.

Ted Kaufman

Sen. Ted Kaufman (D-Del.) has introduced the Health Care Fraud Enforcement Act of 2009 (S 1959), seeking several moves, including the inclusion of a provision that health insurance fraud offenses are punished commensurate to the cost offenders inflict upon the system.

The bill also amends federal sentencing guidelines to provide a two-level increase in offense level for those convicted of a federal health care offense involving a loss of $1 million or more, a three-level bump if the loss is $7 million or more and a four-level increase if the loss exceeds $20 million.

According to a statement by Kaufman, health care represents one-sixth of the national economy, so unchecked health care fraud has “the potential to inflict devastating harm in our national prosperity.

“Fraud perpetrated against both public and private health plans costs between $72 and $220 billion annually, increasing the cost of medical care and health insurance and undermining public trust in our health care system,” Kaufman said on the Senate floor, according to a transcript. “ We all know that rooting out waste, fraud, and abuse, in both government and private programs, is critical to making health care reform work.

Kaufman’s bill was introduced following an Oct. 28 Senate Judiciary Committee hearing on strategies for preventing health care fraud. The bill is co-sponsored by committee chairman Sen. Patrick Leahy (D-Vt.) and committee members Sens. Arlen Specter (D-Pa.), Herb Kohl (D-Wis.), Chuck Schumer (D-N.Y.) and Amy Klobuchar (D-Minn.).

The proposed legislation would add to the fraud prevention efforts outlined in both the Senate Finance and Health, Education, Labor and Pension (HELP) reform bills currently being combined into one comprehensive bill.

“I was glad to contribute to the efforts to include anti-fraud provisions in the Finance and HELP Committees’ health care reform bills,” Leahy said in a statement. “But I believe that we must do everything we can to ensure that those responsible for rooting out health care fraud have the tools they need.

Among the other measures outlined in the bill are: redefining “health care fraud offense,” to include ERISA, drug marketing and kickback crimes; creating a common sense mental state requirement for health care offenses and adding $20 million to federal anti-fraud spending each year through 2016.

Kaufman’s Fraud Enforcement and Recovery Act (S 386), taking similar steps to investigate and prosecute financial fraud and introduced with Leahy and Sen. Chuck Grassley (R-Iowa), was signed by President Barack Obama May 20.