Obama Gets Tough on Health Care Fraud

ST. CHARLES, Mo. - President Obama continued his drive for a health care overhaul on Wednesday, ordering a crackdown on Medicare and Medicaid waste and fraud and dispatching his secretary of health and human services, Kathleen Sebelius, to take on insurance companies that have been lobbying against many of his proposals to remake the health care system.



Mr. Obama, in his second health care rally this week, said he was unleashing auditors around the country as part of a special program to ferret out government overpayments to hospitals and doctors, as well as to other contractors.



"The health care system has billions of dollars that should go to patient care, and they're lost each and every year to fraud and abuse and massive subsidies that line the pockets of insurance company executives," Mr. Obama told about 500 mostly supportive local residents in the gymnasium of St. Charles High School here.



His initiative is designed to woo Americans on both sides of the political fence; both conservatives and liberals can embrace going after wasteful government spending and overpayments to insurance companies.



Mr. Obama said the auditors would have an incentive to find improper payments because they would receive a small percentage of the savings. "It's estimated that improper payments cost taxpayers almost $100 billion last year alone," he said. "If we created a Department of Improper Payments, it would actually be one of the biggest departments in our government."



The auditors - whom some White House officials are already referring to as "bounty hunters" - would have high-tech computer programs that would troll through billing records for fraudulent claims. White House officials said that a pilot program run by Medicare in California, New York and Texas recaptured $900 million in taxpayer money between 2005 and 2008.



For their part, Republicans said the government could step up its efforts against fraud without passing the Democrats' bill. "Why can't we crack down on fraud without a big-government takeover of health care?" asked the House Republican leader, Representative John A. Boehner of Ohio.



In Washington, Secretary Sebelius told insurance company executives that instead of attacking the president's proposals, they should use their resources to win approval for the health care legislation in Congress.



Speaking at the annual policy conference of America's Health Insurance Plans, a trade group, she said, "It's not too late to work on this issue together, for insurance companies to come to the table and work with us."



In addition, Ms. Sebelius asked insurance companies to disclose all their requests for increases in premiums, along with data showing costs and other factors that would justify the higher rates.



Karen M. Ignagni, president of America's Health Insurance Plans, immediately accepted the suggestion. She said her group would work with the National Association of Insurance Commissioners to develop a standard template for disclosure of data on premiums and costs.



In addition, Ms. Ignagni said her group would suggest ways to improve the bill by strengthening its control of health costs.



Ms. Sebelius said that "over the last year, we have seen tens of millions of dollars, by the insurance industry, spent on ads and lobbyists to help kill health reform." She said she could not understand such efforts because Mr. Obama was not trying to "eliminate the private insurance market and go to some kind of single-payer system like Europe or Canada."



Indeed, the president's proposal would provide hundreds of billions of dollars in subsidies to help moderate-income people buy private health insurance.



In their effort to whip up support for the health care bill in the last few weeks, Obama administration officials have repeatedly denounced insurance companies. They say the industry is reaping huge profits and overpaying top executives.



Insurers said the administration was demonizing them. "The politics of vilification" will not make insurance more affordable, Ms. Ignagni said. As it stands, the bill would lead to higher premiums, she said, causing "rate shock" for many consumers.



The White House press secretary, Robert Gibbs, has said the administration wants House Democrats to finish their work on the health care by March 18, when Mr. Obama is scheduled to leave for Indonesia and Australia. But House Democrats have balked at the deadline.



"We don't feel that we want any deadline assigned to us," said Representative Henry A. Waxman, Democrat of California.



Democratic leaders in Congress are considering a complex maneuver under which the House would pass the Senate health care bill and both chambers would approve a package of changes, using a procedure known as budget reconciliation to avoid a Republican filibuster in the Senate.



The No. 2 Democrat in the Senate, Richard J. Durbin of Illinois, said Wednesday that he hoped the second bill would include a major overhaul of the student loan program, as well as the health care provisions.



Senator Ben Nelson, Democrat of Nebraska, said he opposed the student loan bill, under which the federal government would replace private banks as the main source of lending for higher education. "I'm not for federalizing and turning everything into government when you've got private enterprise working the way it does," Mr. Nelson said.



On Wednesday evening, Democratic Congressional leaders and the White House chief of staff, Rahm Emanuel, met again in the offices of Speaker Nancy Pelosi. Aides said they were working through a list of issues. "Lots of progress," Mr. Emanuel reported as he left the Capitol shortly after 7:30 p.m.



Helene Cooper reported from St. Charles, and Robert Pear from Washington.