On April 6, 2018, Health and Human Services (HHS) Secretary Alex Azar and Attorney General Jeff Sessions released a fiscal year 2017 Health Care Fraud and Abuse Control Program report showing that for every dollar the federal government spent on health care related fraud and abuse investigations in the last three years, the government recovered $4. In fiscal year 2017, the government’s health care fraud prevention and enforcement efforts recovered $2.6 billion from individuals and entities attempting to defraud the federal government, as well as Medicare and Medicaid beneficiaries. Some of these fraudulent practices included: health care providers operating “pill mills” out of their medical offices, providers submitting false claims to Medicare for ambulance transportation services, clinics submitting false claims to Medicare and Medicaid for physical and occupational therapy, drug companies paying kickbacks to providers to prescribe their drugs, pharmacies soliciting and receiving kickbacks from pharmaceutical companies for promoting their drugs, and companies misrepresenting the capabilities of their electronic health record software to customers.
“Today’s report highlights the success of HHS and [the Department of Justice’s (DOJ)] joint fraud-fighting efforts,” said HHS Secretary Azar. “By holding individuals and entities accountable for defrauding our federal health programs, we are protecting the programs’ beneficiaries, safeguarding billions in taxpayer dollars, and, in the case of pill mills, helping stem the tide of our nation’s opioid epidemic.”
“Taxpayers work hard every day to help fund government programs for our fellow Americans,” Attorney General Sessions said. “But too many trusted medical professionals like doctors, nurses and pharmacists have chosen to violate their oaths and exploit this generosity to line their pockets, sometimes for millions of dollars. At the Department of Justice, we have taken historic new actions to incarcerate these criminals and recover stolen funds, including executing the largest health care fraud enforcement action in American history. These achievements are important, but the Department’s work is not finished. We will keep up this pace and continue to prosecute fraudsters so that we can give financial relief to taxpayers.”
HHS and DOJ, through the Health Care Fraud Prevention and Enforcement Action Team (HEAT) effort, used data analytics and surveillance to prevent and prosecute health care fraud. While the program continues to be very successful, the return on investment fluctuates from year to year, in part because cases resulting in large settlements take multiple years to complete. Additionally, there has been a reduction in large monetary settlements as many of the large pharmaceutical manufacturers have entered into Corporate Integrity Agreements with the HHS Office of the Inspector General (OIG) to establish protections against fraudulent activities.
With teams comprised of law enforcement agents, prosecutors, attorneys, auditors, evaluators, and other staff, DOJ opened 967 new criminal health care fraud investigations last year. Federal prosecutors filed criminal charges in 439 health care fraud cases involving 720 defendants. A total of 639 defendants were convicted of health care fraud related crimes.
In fiscal year 2017, DOJ and HHS joint Medicare Fraud Strike Force filed 253 indictments and charges against 478 defendants who allegedly billed federal health care programs more than $2.3 billion. The Strike Force obtained more than 290 guilty pleas, litigated 33 jury trials, and won guilty verdicts against 40 defendants. The Fraud Strike Force secured prison sentences for more than 300 defendants, with an average sentence of 50 months. Since its inception in 2007, Strike Force prosecutors filed more than 1,660 cases charging more than 3,490 defendants who collectively billed the Medicare program more than $13 billion.
Beyond criminal prosecution, HHS OIG excluded providers and suppliers who committed fraud or engaged in the abuse or neglect of patients from federal health programs. A total of 3,244 individuals and entities were excluded in fiscal year 2017. Others were excluded as a result of licensure revocations. These exclusions helped to safeguard beneficiaries from future harm that could otherwise be inflicted by such convicted individuals or entities.
HHS can also suspend Medicare payments to providers during investigations of credible allegations of fraud. During fiscal year 2017, there were 551 related payment suspensions.
More than four million claims are reviewed by Medicare each day; resulting in more than one billion claims processed annually for timely payments to health care providers and suppliers. Given the volume of claims processed by Medicare each day and the significant cost associated with conducting medical review of an individual claim, the Centers for Medicare and Medicaid Services used automated edits to help prevent improper payments without the need for manual intervention. The National Correct Coding Initiative consisted of edits designed to reduce improper payments in Medicare Part B, and this program saved Medicare $186.9 million during the first nine months of fiscal year 2017.
See the HHS Announcement
See also Medical Law Perspectives Report: Drugs, Dosage, and Damage: Physician Liability for Prescribing or Administering Medication