HEALTH CARE FRAUD FELONY LAW URGED BY REP. SCHUMER
HEALTH CARE FRAUD FELONY LAW URGED BY REP. SCHUMER as part of a bill that the New York Democrat plans to introduce concurrent with the announcement of President Clinton's health reform package. Schumer discussed the legislation at a May 27 hearing on AIDS fraud before his House Judiciary/Crime Subcommittee. The hearing was the second in a series focusing on what Schumer estimates to be $80 bil. annually in health care fraud in the U.S. The fraud legislation will include a provision enacting "a new health care fraud felony" with a penalty of up to five years in jail, Schumer reported. It will also set new penalties for aggravated offenses: fraud which results in serious injury would carry a maximum sentence of 25 years in jail. "I've discussed this proposal with the First Lady [Hillary Rodham Clinton] and...we are working with the White House" on the legislation, Schumer told the hearing. FDA Office of Criminal Investigations Director Terrell Vermillion, appearing before the subcommittee, acknowledged that a "broadly worded statute that specifically addressed health fraud" would be "useful." The agency's enforcement statute currently provide for civil and criminal penalties, noted Associate Chief Counsel for Enforcement Robert Spiller, but FDA "frequently goes first with civil, and frequently that's enough." Randolph Wykoff, director of FDA's Office of AIDS Coordination, told the subcommittee: "We must be able to take action against these individuals [who perpetrate AIDS fraud]." In order to do that, he said, regulatory bodies like the FDA "need to have law enforcement tools." Wykoff emphasized, however, that "secondly and perhaps more importantly, we need to have the willingness of the communities that are impacted by these frauds. The communities affected by AIDS must be willing to put aside their inherent distrust of government and recognize that if we are going to have any opportunity to stop health fraud in this country, we must do it together." FDA sent a letter May 25 to about a dozen AIDS "buyers' clubs" repeating the agency's stance on the importation of AIDS drugs not approved in the U.S. an expressing concern over possible abuses of the personal use importation policy under which the clubs operate. The letter announced FDA's intention to solicit the input of various interested groups to help combat abuse by identifying those unapproved AIDS drugs which represent the greatest medical promise and exploring ways to make them more widely available. FDA long has accepted the role of buyers' clubs as clearinghouses for AIDS patients to obtain unapproved drugs and has tried not to interfere with those activities fallin under the agency's import policy. That policy permits individuals to bring into the U.S., for personal use, small quantities of drugs available overseas but not approved in this country. The agency has expressed concern at times over possible abuses of the policy. FDA repeatedly has emphasized that the policy sets forth certain criteria, among them the stipulation that the products may not be promoted or commercialized, they must not pose unreasonable risks, and the patient must provide the name of the doctor responsible for treatment. In the May 25 FDA letter, signed by Wykoff and Associate Commissioner for Regulatory Affairs Ronald Chesemore, the agency notes that it "has become increasingly concerned about certain potential threats to the health of people with AIDS and advanced HIV disease posed by the activities of some groups." The causes of concern are "the lack of physician involvement in the medical care of their clients; the sale of injectable products of unknown purity, sterility and strength; the sale of products with unknown sources of manufacture (foreign and domestic); and the promotion, distribution and commercialization of unproven and potentially dangerous products." The letter notifies the buyers' clubs of FDA's plans to "intensify its communications with various interested groups... in an attempt to catalog those products that are reported to have the greatest medical promise for HIV-infected individuals and are not yet legall available in the United States." The agency will then "explore appropriate mechanisms to help make these products more widely available as scientific data are gathered." FDA hopes to begin the process "in the very near future."
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