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WASHINGTON, D.C. - Today the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee passed the Affordable Health Choices Act, their proposed legislation on health care reform. The bill included several provisions authored and championed by Senator Herb Kohl intended to bolster the health care workforce and eliminate health care fraud and abuse.
"America is facing a severe shortage of workers who are equipped to manage seniors' unique health needs. These provisions will implement recommendations made by the Institute of Medicine to bolster the health care and long-term care workforce," said Kohl.
As chairman of the U.S. Senate Special Committee on Aging, Kohl held a hearing in April 2008 to address the impending severe shortage of health care workers who are adequately trained and prepared to care for older Americans. The committee reviewed key factors that are contributing to the deficiency, such as the lack of geriatric training in the medical education system and the need for federal and state training requirements for direct care workers, such as home health aides and personal care attendants.
Senator Kohl later introduced the Retooling the Health Care Workforce for an Aging America Act (S. 245) to expand education and training opportunities in geriatrics and long-term care for licensed health professionals, direct care workers and family caregivers. Senator Kohl urged the HELP Committee to address workforce issues beyond professional medical providers, such as doctors and nurses, by including social workers, dentists, mental health professionals, and direct care workers as it crafted health care reform legislation.
Title IV. Health Care Workforce; Subtitle D. Enhancing Health Care Workforce Education and Training, included the following Kohl provisions:
  • Training opportunities for direct care workers: Authorizes $10 million over three years to establish new training opportunities for direct care workers (CNAs, home health aides and personal/home care aides) already employed in long-term care facilities. (§ 432)
  • Geriatric education and training: Authorizes $12 million to geriatric education centers to support training in geriatrics, chronic care management, and long-term care for faculty in health professions schools and family caregivers; develops curricula and best practices in geriatrics; expands the geriatric career awards to advanced practice nurses, clinical social workers, pharmacists, and psychologists; and establish traineeships for individuals who are preparing for advanced education nursing degrees in geriatric nursing. (§ 435)
Kohl's dual roles on both the Aging and Judiciary Committees bolstered his interest in establishing a vigorous health care fraud enforcement program that will protect policyholders, businesses, and taxpayers.
"Eliminating fraud and abuse from both federal and private health care systems is something we can all agree on. These provisions will help consumers and taxpayers alike," said Kohl.
Title V. Fighting Health Care Fraud and Abuse, included the following Kohl Provisions:
  • Subtitle A. Establishment of New Health and Human Services (HHS) and Department of Justice (DOJ) Health Care Fraud Positions
Synopsis: The HHS Secretary will appoint a new Senior Advisor for Health Care Fraud. The Attorney General will appoint a Senior Counsel for Health Care Fraud Enforcement.   
This section creates non-career, Schedule C-level, senior positions within HHS and DOJ with primary oversight and coordination responsibility for each Department's overall health care fraud efforts, and oversight of implementation of the Program Integrity Coordinating Council's (PICC) responsibilities. Persons serving in these positions will serve as "point persons" for purposes of inter-agency coordination, coordination of program integrity efforts with respect to private plans, and coordination with State entities such as insurance regulators and State Medicaid Fraud Control Units. (§ 501, 502)
  • Subtitle B. Health Care Program Integrity Coordinating Council (PICC)
Synopsis: A coordinating council is established to coordinate strategic planning among federal agencies involved in health care integrity and oversight.  
HIPAA established a national Health Care Fraud and Abuse Control Program (HCFAC), under the joint direction of the Secretary of Health and Human Services (HHS), acting through the Department's Inspector General (HHS-OIG), and the Attorney General of the United States. HCFAC was intended to facilitate collaboration among federal, state, and local law enforcement activities with respect to health care fraud and abuse. The proposed Health Care Program Integrity Coordinating Council (PICC) would retain the current HCFAC Program structure, and establish additional formal coordination and strategic planning roles for the federal agencies involved in health care integrity and oversight. The PICC will develop a strategic plan to improve the efficacy of the HCFAC Program to ensure coordination of fraud prevention efforts. The PICC will develop and issue guidelines to federal agencies to carry out the HCFAC Program. The PICC will recommend measures to estimate the amount of fraud, waste and abuse in connection with public and private plans, and the annual savings resulting from specific program integrity measures. (§ 511)
  • Subtitle C. False Statements and Representations
Synopsis: Employees and agents of Multiple Employer Welfare Arrangements (MEWAs) will be subject to criminal penalties if they provide false statements in marketing materials regarding a plan's financial solvency, benefits provided, or regulatory status.
This section amends criminal penalties provisions in ERISA, 29 U.S.C. § 1131, to add a prohibition against false statements frequently used by corrupt operators and marketers of MEWAs without requiring that false statements be contained in ERISA-required documents. Examples of such false statements include misrepresentations regarding the financial solvency or regulatory status of a plan or other arrangement by MEWA operators undertaken to generate business and evade state regulation. Currently, 18 U.S.C. § 1027 criminalizes the making of false statements and omissions in connection with the operation of ERISA plans, but is limited to false statements or concealments contained in documents that must be kept, published, or certified under title I of ERISA. Consequently, Section 1027 does not reach misrepresentations of fact in marketing materials used by corrupt operators and marketers to induce employers or employee organizations to purchase particular health care claims coverage for their respective employees or members. (§ 521)
  • Subtitle D. Federal Health Care Offense
Synopsis: The Department of Justice will be permitted to prosecute crimes involving MEWAs. The agency does not currently have this authority. This change in the law will enable the agency to seize the proceeds of health care offenses, employ administrative subpoenas, and enjoin ongoing criminal activities.
Revised section 24(a)(2) of Title 18 adds three crimes relating to MEWAs to the list of federal health care offenses. The proceeds of these federal health care offenses will become subject to criminal forfeiture under 18 U.S.C. § 982(a)(7), and the offenses themselves will also be included as specified unlawful activity for money laundering offenses at 18 U.S.C. § 1956(c)(7)(F). Designation of these crimes as federal health care offenses will permit employment of an administrative subpoena provision at 18 U.S.C. § 3486, to facilitate government investigation of fraud and abuse involving such offenses. The designation authorizes the Attorney General to commence a civil action under 18 U.S.C. § 1345 to enjoin an ongoing violation of these criminal statutes. An action by the United States to promptly enjoin and prevent the future sale or marketing of a health care benefit program's health insurance product is needed where corrupt insurers are sponsoring, marketing, and selling health care insurance and claims products in multiple states. (§ 531)
  • Subtitle E. Uniformity in Fraud and Abuse Reporting
Synopsis: To facilitate consistent reporting by private health plans of suspected cases of fraud and abuse, a model uniform reporting form will be developed by the National Association of Insurance Commissioners, under the direction of the HHS Secretary.
This section encourages the development of a model uniform reporting form for private health plans seeking to refer suspected cases of fraud and abuse to State Insurance Departments for investigation. The current lack of uniformity is an impediment to consistent reporting that can be compared and analyzed across state lines, and thus a hindrance to more effective anti-fraud activities. The Secretary of Health and Human services will request that the National Association of Insurance Commissioners develop recommendations for uniform reporting standards for such referrals. (§ 541)
  • Subtitle F. Applicability of State Law to Combat Fraud and Abuse
Synopsis: The Department of Labor will adopt regulatory standards and/or issue orders to prevent fraudulent MEWAs from escaping liability for their actions under state law by claiming that state law enforcement is preempted by federal law. 
Fraudulent insurance plans often escape accountability under state insurance laws and regulations by claiming that federal law preempts the application of state law to their actions. When cases are brought against fraudulent plans in state courts, plans allege that state courts do not have jurisdiction. Two laws are often abused: ERISA and the Liability Risk Reduction Act. Many fraudulent plans claim they are employer-sponsored plans subject to ERISA and not "in the business of insurance," as defined in ERISA. If the plans were "in the business of insurance" they would, under ERISA, be subject to state insurance laws and could be held responsible for their fraudulent activities. The preemption provisions in ERISA and the Liability Risk Reduction Act are complex. Fraudulent plans take advantage of this complexity to evade justice. To circumvent fraudulent plans' efforts, the Department of Labor will be authorized to adopt regulations establishing, and issue orders relating to, when an entity engaging in the business of the insurance is subject to state law. These standards and orders will make clear when a plan is subject to state law. (§ 551)
  • Subtitle G. Enabling the Department of Labor to Issue Administrative Summary Cease and Desist Orders and Summary Seizures Orders against Plans in Financially Hazardous Condition. 
Synopsis: The Department of Labor will be authorized to issue "cease and desist" orders to temporarily shut down operations of plans conducting fraudulent activities or posing a serious threat to the public, until hearings can be completed. If it appears that a plan is in a financially hazardous condition, the agency may seize the plan's assets.
The section authorizes the Department of Labor to issue cease and desist orders if it appears to the Secretary that a plan's alleged conduct is fraudulent, or creates an immediate danger to public safety or welfare, or is causing significant, imminent, and irreparable public injury. A person adversely affected by the issuance of a cease and desist order may request a hearing regarding such order. The burden of proof in this hearing will be on the party requesting the hearing to show cause why the cease and desist order should be set aside. Based on evidence, the cease and desist order may be affirmed, modified, or set aside in whole or in part. DOL may issue a summary seizure order if it appears an entity is in financially hazardous condition.   States will be empowered to act quickly through administrative orders to shut down illegal and financially hazardous insurance schemes. (§521)
  • Subtitle H. Requiring Multiple Employer Welfare Arrangement (MEWA) plans to file a registration form with the Department of Labor prior to enrolling anyone in the plan.
Synopsis: Multiple Employer Welfare Arrangements (MEWAs) are a type of employer-sponsored plan involving two or more employers, rather than a single employer. Employers join together to negotiate cheaper premiums. MEWAs have been prone to fraud. To protect the public, MEWAs will be required to file their federal registration forms, and thereby be subject to government verification of their legitimacy, before enrolling anyone.
MEWAs are required to file a Form M-1 with the Department of Labor each year. The annual reporting of the Form M-1 is helpful to states. In certain situations, plans are able to operate for more than a year before filing the M-1. It is helpful to states to have basic information about entities operating in their state without a time delay that works to the advantage of those who seek to operate illegally. The registration would provide basic information about the entity, where the entity will operate, and what exclusion from state authority they may claim. (§ 571)
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