Preventing and Prosecuting Potential Fraud in Health Insurance Market

 Attorney General Eric Holder, Health and Human Services (HHS) Secretary Kathleen Sebelius, and Federal Trade Commission (FTC) Chairwoman Edith Ramirez met at the White House to kick off a comprehensive interagency initiative to prevent, protect against, and where necessary prosecute consumer fraud and privacy violations in the Health Insurance Marketplace. Representing key state partners in this critically important effort to protect consumers were Maryland Attorney General Douglas Gansler and Kansas Insurance Commissioner Sandy Praeger. Senior White House officials also attended the meeting.


Meeting participants reaffirmed their ongoing commitment to protect consumers from potential threats in this area. Building on a successful infrastructure that already exist, the interagency officials highlighted the following new initiatives:

  1. The dedication of the Marketplace Call Center (1-800-318-2596, TTY 1-855-889-4325) as a resource and referral to FTC for consumer fraud concerns, with trained Call Center staff to effectively refer consumer threats and complaints. A call to the 1800 number will now enable individuals to report fraud. Call Center operators have been trained to take a fraud complaint, and refer them to FTC’s Consumer Sentinel Network.
  2. Connecting consumers to FTC’s Complaint Assistant through a newly created pathway, offers more easy access.
  3. Establishing a routing system for complaints through a centralized database, the Sentinel Network, will ensure Federal, state and local law enforcement have access to consumer complaints and can analyze and refer those complaints as appropriate.
  4. Building on the certification of the Health Insurance Marketplace’s data hub on September 6, 2013 as in compliance with the stringent security, privacy and data flow standards developed by the National Institute of Standards and Technology, the interagency officials have also established a rapid response mechanism that will be employed in the unlikely event of a data security breach.
  5. Ramping up public education to empower consumers and assisters to know the facts and avoid scams. The new educational material includes online tip sheets like Protect Yourself from Fraud in the Health Insurance Marketplace and Tips for Assisters to Help Consumers Navigate the Marketplace. The materials remind consumers that there is free assistance available to navigate the Marketplace and that they should be suspicious of persons who ask for a fee before providing assistance.


“Today we are sending a clear message that we will not tolerate anyone seeking to defraud consumers in the Health Insurance Marketplace,” said Health and Human Services Secretary Sebelius. “We have strong security safeguards in the Marketplace to protect people’s personal information against fraud and we will work with our partners to aggressively prosecute bad actors, just as we have been doing in Medicare, Medicaid and the Children’s Health Insurance Program.”


“I am proud of the proactive approach that the Justice Department is taking with our colleagues at HHS and FTC, and with the state law enforcement community, to prevent and detect consumer fraud in the Health Insurance Marketplace,” said Attorney General Eric Holder. “Going forward, we intend to share information, work cases, and hold wrongdoers accountable as we always do. We plan to use our tried-and-tested collaborative methods to ensure that we can identify trends and take swift action against those seeking to take advantage of consumers.”


"At the FTC, we know all too well how scammers invariably try to take advantage of developments in the marketplace and new government programs," said FTC Chairwoman Edith Ramirez. "We will be vigilant as always in cracking down on this type of opportunistic fraud."

Consumer fraud experts from across state and federal agencies will continue to meet on a regular basis to monitor potential fraud associated with the Marketplace and ensure the strength of preventive measures. This will insure that consumers can confidently and securely shop for affordable health insurance beginning on October 1.


Since its creation in 1997, the HHS Senior Medicare Patrol has educated to more than 28 million Medicare beneficiaries and counseled more than 1.3 million individuals about specific concerns, one-on-one. Coupled with other outreach efforts, Medicare’s toll-free customer service operations sent nearly 45,000 inquiries to law enforcement partners for fraud investigations in 2012 alone. These direct-from-consumer leads ultimately supported the Administration’s work to prosecute criminals, returning $6.7 billion to the Medicare Trust Fund in the last four years.

 In the last several years, the FTC’s Bureau of Consumer Protection has put a stop to over 50 health fraud scams, government grant schemes, and mortgage relief services frauds, and has independently secured nearly $6 million in monetary relief for consumers. The Bureau conducts investigations, sues companies and people that violate the law, and works to educate consumers and businesses about their rights and responsibilities. The Bureau coordinates its work in these areas with Federal, state and local partners.


Over the last four years, the DOJ has successfully prosecuted over four thousand defendants in identity theft and aggravated identity theft cases, and convicted over 200 defendants in advance fee fraud cases, over 500 defendants in consumer fraud cases, and over 100 defendants in telemarketing fraud cases.


See the DOJ Announcement