White House stops short of endorsing plan to get tougher on corporate fraudsters

Independent federal auditors are urging reforms to grant the administration broader powers to punish business executives tied to healthcare fraud. So far, though, the White House hasn't signed on.

An administration official said Wednesday the White House has yet to take a position on the anti-fraud proposal, which would authorize the Health and Human Services Department (HHS) to boot corporate executives associated with fraud from all federal healthcare programs — even if they no longer work for the offending company. A loophole in the current law prevents HHS from using its exclusion authority if the executive steps down first. 

Appearing before the Ways and Means Health Subcommittee Tuesday, Lewis Morris, chief counsel for the HHS' Office of Inspector General (OIG), said closing the loophole would go a long way toward reining in Medicare fraud, which is estimated to cost taxpayers hundreds of billions of dollars each year.

The White House official said the administration agrees "that corporate officials need to be held responsible for their role in health care fraud, including being subject to program exclusion, prosecution and jail time where appropriate." But the official stopped short of backing the OIG's recommendation. 

Meanwhile, Florida Reps. Ron Klein (D) and Ileana Ros-Lehtinen (R) are pushing a legislative fix to the corporate fraud loophole — part of a larger bill designed to tackle Medicare fraud.