HHS and Justice Department Recover $4.2 billion From Healthcare Fraud in 2012

The U.S. Attorney General’s office and Health and Human Services (HHS) this week released a new report showing that the government’s health care fraud prevention and enforcement efforts recovered a record $4.2 billion in taxpayer dollars in Fiscal Year (FY) 2012 from individuals and companies who attempted to defraud federal health programs serving seniors and taxpayers or who sought payments to which they were not entitled.

Over the last four years, the administration’s enforcement efforts have recovered $14.9 billion, up from $6.7 billion over the prior four-year period. The report also showed that for every dollar spent on health care-related fraud and abuse investigations in the last three years, the government recovered $7.90.  This is the highest three-year average return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program.

“This was a record-breaking year for the Departments of Justice and Health and Human Services in our collaborative effort to crack down on health care fraud and protect valuable taxpayer dollars,” said U.S. Attorney General Eric Holder. “In the past fiscal year, our relentless pursuit of health care fraud resulted in the disruption of an array of sophisticated fraud schemes and the recovery of more taxpayer dollars than ever before.  This report demonstrates our serious commitment to prosecuting health care fraud and safeguarding our world-class health care programs from abuse.”

“Our historic effort to take on the criminals who steal from Medicare and Medicaid is paying off: We are gaining the upper hand in our fight against health care fraud,” said HHS Secretary Kathleen Sebelius. “This fight against fraud strengthens the integrity of our health care programs and helps us fulfill our commitment to our seniors.”

The joint Department of Justice and HHS effort was made possible by the Health Care Fraud Prevention and Enforcement Action Team (HEAT), created in 2009 to prevent fraud, waste and abuse in the Medicare and Medicaid programs and to crack down on individuals and entities that are abusing the system and costing American taxpayers billions of dollars.  These efforts to reduce fraud will continue to improve with new tools and resources provided by the Affordable Care Act.

Since 2009, Justice and HHS have improved their coordination through HEAT and increased the number of Medicare Fraud Strike Force teams to nine. The combined efforts coordinated under HEAT have expanded local partnerships and helped educate Medicare beneficiaries about how to protect themselves against fraud.   In FY 2012, the two departments continued their series of regional fraud prevention summits, and the Justice Department hosted a training conference for federal prosecutors, FBI agents, HHS Office of Inspector General agents and others.

The strike force teams use advanced data analysis techniques to identify high-billing levels in health care fraud hot spots so that interagency teams can target emerging or migrating schemes as well as with chronic fraud by criminals masquerading as health care providers or suppliers. In July, Attorney General Holder and Secretary Sebelius announced the launch of a ground-breaking partnership among the federal government, state officials, leading private health insurance organizations and other health care anti-fraud groups to share information and best practices to improve detection of and prevent payments to scams that cut across public and private payers.

In FY 2012, the Justice Department opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants, and a total of 826 defendants were convicted of health care fraud-related crimes during the year.  The department also opened 885 new civil investigations.

The strike force coordinated a takedown in May 2012 that involved the highest number of false Medicare billings in the history of the strike force program.  The takedown involved 107 individuals, including doctors and nurses, in seven cities, who were charged for their alleged participation in Medicare fraud schemes, involving about $452 million in false billings.  As a part of the May 2012 takedown, HHS also suspended or took other administrative action against 52 providers using authority under the health care law to suspend payments until an investigation is complete.

Strike force operations in the nine cities where teams are based resulted in 117 indictments, informations and complaints involving charges against 278 defendants who allegedly billed Medicare more than $1.5 billion in fraudulent schemes.  In FY 2012, 251 guilty pleas and 13 jury trials were litigated, with guilty verdicts against 29 defendants, in strike force cases.  The average prison sentence in these cases was more than 48 months.

The new authorities under the Affordable Care Act granted to HHS and the Centers for Medicare & Medicaid Services (CMS) were instrumental in clamping down on fraudulent activity in health care.  In FY 2012, CMS began the process of screening all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system that quickly identifies ineligible and potentially fraudulent providers and suppliers prior to enrollment or revalidation to verify the data.  As a result, nearly 150,000 ineligible providers have already been eliminated from Medicare’s billing system.

The HCFAC annual report is available at www.oig.hhs.gov/publications/hcfac.asp.  For more information on the joint DOJ-HHS Strike Force activities, visit: www.StopMedicareFraud.gov/.