(March 23, 2015): Last week, the Department of Justice (DOJ) and Department of Health and Human Services (HHS) announced that they had recovered more than $27.8 billion to the Medicare Trust Fund due to the efforts of the Health Care Fraud and Abuse Control Program (HCFAC). As set out in the 2014 HCFAC Report, in Fiscal Year 2014, the government’s health care fraud prevention and enforcement efforts recovered $3.3 billion in taxpayer dollars from individuals and companies that attempted to defraud federal health programs. In particular, the agencies recovered $7.70 for every dollar spent to fight health care related fraud and abuse. This figure represented the third highest dollar amount on record and represents about $2 more than the average return on investment in the HCFAC program since its creation in 1997.
As HHS Secretary Sylvia M. Burwell noted:
“[e]liminating fraud, waste and abuse is a top priority” for HHS. “These impressive recoveries for the American taxpayer demonstrate our continued commitment to this goal and highlight our efforts to prosecute the most egregious instances of health care fraud and prevent future fraud and abuse. New enrollment screening techniques and computer analytics are preventing fraud before money ever goes out the door. And together with the continued support of Congress and our partners at the Department of Justice, we’ve cracked down on tens of thousands of health care providers suspected of Medicare fraud – all of which are helping to extend the life of the Medicare Trust Fund”.
DOJ Attorney General Eric Holder expanded upon Secretary Burwell’s comments:
“As the innovative and collaborative work of the [HCFAC] proceeds, more taxpayer money is being recovered, more criminals are facing justice, and more fraud is being punished, prevented, and deterred… [t]he extraordinary return on investment we've obtained speaks to the skill, the tenacity, and the inspiring success of the hardworking men and women fighting on behalf of the American people. And with these outstanding results, we are sending the unmistakable message that we will not waver in our mission to pursue fraud, to protect vulnerable communities, and to preserve the public trust”.
The DOJ and HHS have been operating under a two-pronged strategy to fight waste, fraud and abuse in the federal health care programs. Under new powers granted by the Affordable Care Act (ACA), these agencies have moved away from the traditional “pay and chase” methods for targeting fraudsters. Instead, they are not working towards preventing health care fraud and abuse in the first place. Furthermore, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint operation run by the HHS Office of the Inspector General (OIG) and DOJ, is changing how the federal government combats certain types of health care fraud. HEAT units are investigating potential fraud cases using real-time data analysis instead of a prolonged subpoena and account analyses. This new approach has resulted in significantly shorter periods of time between fraud identification, arrest, and prosecution.
Government agencies have also utilized the federal False Claims Act (FCA) as another vital tool to combat waste, fraud and abuse. According to the 2014 HCFAC Report, since January 2009, DOJ has recovered more than $15.2 billion in settlements and judgments from civil cases involving health care fraud and false claims against federal health care programs like Medicare and Medicaid. As detailed on the 2014 HCFAC Report, in the past year, the DOJ obtained $2.3 billion in cases involving health care fraud.
Moreover, the Centers for Medicare & Medicaid Services (CMS) has adopted its own set of preventive measures to combat waste, fraud and abuse in the health care programs. From the outset, CMS has implemented vital safeguards to prevent illegitimate providers from enrolling in and billing the Medicare program. The ACA also requires CMS to revalidate all existing 1.5 million Medicare suppliers and providers under new and updated screening requirements. This has led to the deactivation of at least 470,000 enrollments and revocation of nearly 28,000 enrollments to prevent certain providers from re-enrolling and billing the Medicare program. CMS also issued a regulation that requires prescribers of Medicare Part D drugs to enroll in Medicare and undergo screening. Another ongoing preventative measure has been CMS’ ongoing moratoria on the enrollment of new home health or ambulance service providers in six health care fraud “hot spots”: Miami, Chicago, Dallas, Houston, Detroit and Philadelphia (which includes some counties in New Jersey). CMS believes that this extension will allow it to continue its actions to suspend payments or remove providers from the program before allowing new providers into potentially over-supplied markets.
The HCFAC annual report is available at www.oig.hhs.gov/publications/hcfac.asp. We applaud the government’s efforts to combat waste, fraud and abuse in the federal health care programs. As these latest updates demonstrate, Medicare and Medicaid fraud prevention efforts will continue to expand. With this, providers should also be aware that there will likely be an increase in the number of FCA cases that are filed. FCA cases have become increasingly important as the Justice Department looks to stop the rising tide of fraud and abuse in the nation’s healthcare system. Thus, health care providers and suppliers should ensure that their compliance programs are effective to identifying and deterring potential violations of the FCA and other laws.