WASHINGTON - Senator Chuck Grassley has asked the Attorney General and the Secretary of Health and Human Services to account for the way their departments allocate and utilize taxpayer monies aimed at health care fraud.  In his request, Grassley expressed concern about the stagnating number of criminal prosecutions for health care fraud, despite increased federal spending to fight fraud.

"The data raises all kinds of questions," Grassley said.  "Congress has been increasing appropriations for the anti-fraud program that's jointly run by Justice and HHS.  Administration leaders promote the value of a special fraud prevention and enforcement task force known as HEAT.  The health care law enacted this year dedicates even more federal dollars to these efforts.  Yet, despite the record number of defendants, actual criminal convictions for health care fraud violations are flat resulting in a falling conviction rate."

Grassley said that if the administration is focusing on civil prosecutions of health care fraud at the expense of criminal prosecutions, the risk may be that penalties simply become part of the cost of doing business for those engaged in fraud.

Grassley also said that HEAT criminal investigations grew from 30 in fiscal 2008 to 82 in fiscal 2009, yet the total nationwide number of criminal health care fraud convictions is down.  "This raises a question of whether the focus of the HEAT initiative is redirecting resources away from overall criminal enforcement of health care laws," Grassley said.

Grassley said of even greater concern is the plummeting conviction rate for criminal health care fraud cases.  Of the 803 criminal defendants charged in fiscal 2009, only 583 were convicted or plea bargained.  That represents a 72 percent conviction rate compared to past rates that topped 90 percent.

"Statistically speaking, the data shows that despite increased cases and defendants, fewer bad guys are going to jail for ripping off Medicare and Medicaid.  I want to know why the Justice Department is having a tougher time putting people behind bars when we're giving them millions more to do the job," Grassley said.

Grassley has long worked in Congress to strengthen efforts against health care fraud.  Legislation he co-authored in 1986 empowered citizen whistleblowers to file suit on behalf of the taxpayers against those who fraudulently claim federal funds, including Medicare, Medicaid, contract payments, disaster assistance, and other benefits, subsidies, grants and loans.  The amount recovered through the False Claims Act since the 1986 update was enacted is over $27 billion, which otherwise would be lost to fraud.  The whistleblower updates are a major force against health care fraud.

In the new year, Grassley will begin serving as Ranking Member of the Committee on Judiciary.  For the last ten years, Grassley has been either Ranking Member of Chairman of the Committee on Finance, which has jurisdiction over Medicare or Medicaid.  He will continue to serve as a senior member of the Finance Committee.

Click here to read Grassley's letter, including the data and analysis.

Heart of America Group CEO Mike Whalen announced expansion plans for the company into East Peoria, IL and Olathe, KS. Both projects will be built and operated by Heart of America Group. East Peoria will be a six-story, 137 room Holiday Inn and Suites with a Thunder Bay restaurant and a meeting space large enough to accommodate 300 people. "After our success with the Holiday Inn and Suites in West Des Moines, we wanted to team up with them again" said Whalen.

In Olathe, KS they will build a six-story, 107 room Hilton Garden Inn with a Johnny's Italian Steakhouse and large meeting space.

Starting with a 100-seat restaurant back in 1978, The Iowa Machine Shed, Heart of America Group has evolved into one of the Midwest's premier design, construction, and management company with a 32 year history of developing award-winning properties. Currently Heart of America Group is located in ten metropolitan areas across six Midwestern states.

The projects will be a catalyst for the City of East Peoria's EP 2010 project, which will revitalize a vast brownfield former manufacturing area into a mixed use "new" downtown.

Both hotels will be LEED certified and create 125 jobs in each market. "The hotels will have a unique look. We do all of our own design work so we can create hotels that aren't like anyone else's" continues Whalen, "Next year will be the biggest expansion year in the history of the company".

Construction on both of the $20 million projects will begin this spring with a target completion date in the spring of 2012.

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Statement by U.S. Senator Chuck Grassley of Iowa

Ranking Member of the Committee on Finance

Senate Vote on the Tax Agreement

Wednesday, December 15, 2010

"Preventing a tax increase is the best thing we can do for the economy right now.  It's common sense that you don't raise taxes in a recession, including on employers in small business where 70 percent of new jobs are created.

"The only thing better than passing this legislation would be to make tax relief permanent.  Uncertainty about tax rates works against America's economic recovery.  We've seen nearly 23,000 jobs in biodiesel disappear because its tax incentive was allowed to lapse at the end of last year.  Every small business owner who pays taxes on the individual level faces higher taxes if a tax increase isn't prevented across the board with this legislation.  There's a rule that if you want more of something, don't tax it.  We want more employment, so Congress should not allow higher taxes on employment.

"This legislation extends 51 tax incentives for different sectors of America's economy, including ethanol.  These tax policies have been extended previously because they've been proven to help create economic activity.  This legislative agreement also makes sure the government can't take more than half the estates of farmers and small business owners who have scrimped, sacrificed and saved their entire lives to build up a family business by imposing a 55-percent estate tax even after those business owners spent a lifetime paying income, investment and property taxes.

"Since World War II, the tax burden has averaged 18.2 percent of the gross domestic product.  Even if Congress were to extend all of the current-law tax levels permanently, the nonpartisan Congressional Budget Office indicates that taxes as a percentage of gross domestic product will still be much higher than they have been over the last 70 years.  So, even if we were to permanently keep the tax rates at current levels, Americans will be overtaxed when compared with what they've paid in recent history.

"We don't have a deficit problem because people are taxed too little.  We have a deficit problem because Washington spends too much. The deficit needs to be taken on through economic growth and reduced spending.  Revenue to the federal Treasury will continue to increase with the level of taxes as they are today, which this bill will secure for two more years.

"Congress needs to listen to the people and support less spending.  In 2010, I voted for $278 billion in spending reductions.  All of those reductions were rejected by the majority party's leaders."

Common sense prevailed in the agreement reached last night on a tax proposal, including the fact that ethanol and biodiesel offer the most effective alternative to foreign oil and support hundreds of thousands of jobs in the United States.

The federal legislation contains an extension of the ethanol and biodiesel tax credits and an extension of the ethanol tariff at current rates.  The U.S. Senate is scheduled to vote on the bill on Monday afternoon.  The ethanol provision in this tax bill is an extension of current  law.  To leave it out of the tax bill would be a tax increase, which I don't support.

Americans spend $730 million a day on imported petroleum, and ethanol is the only renewable fuel substantially working to reduce U.S. dependence on foreign oil.  Domestic ethanol displaces oil from Saudi Arabia, Venezuela and Nigeria.  It now accounts for almost 10 percent of the U.S. fuel supply.

The billions of dollars we spend on imported petroleum prop up unfriendly governments and dictators.  An average of $84 billion is spent each year by the U.S. military to protect oil transit routes.  Until there's another alternative fuel doing as much to reduce oil dependence, it would be foolish to undermine the only green, domestic alternative to imported oil.

I fought tooth and nail to secure the inclusion of both the ethanol and biodiesel provisions in the new legislative proposal.  There were efforts by some congressional majority Democrats and the White House to weaken the tax policy for these alternative fuels.  In fact, the current congressional majority allowed the blenders' tax credit for biodiesel to expire at the end of 2009.  Since then, 23,000 jobs in biodiesel have been lost nationwide.  The new tax agreement would extend the biodiesel credit retroactively to cover all of 2010 and through the end of 2011.

We can't risk a repeat performance with ethanol, where 112,000 jobs are at stake.  Getting both of these tax provisions extended through the end of next year will boost jobs and investment in the alternative energy sector, exactly when the economy needs a real shot in the arm.