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2014 HCFAC Report — $27.8 Billion Recovered for Medicare

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Fraud(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 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.

Saltaformaggio, RobertRobert Saltaformaggio, Esq., serves as an Associate at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers around the country in connection with Medicaid audits by federal and state agencies and CMS-engaged specialty contractors.  The firm also represents providers in connection with HIPAA Omnibus Rule risk assessments, privacy breach matters, State Licensure Board inquiries and regulatory compliance reviews.  For a free consultation, call Robert at:  1 (800) 475-1906

100 Involved in Health Care Fraud Arrests

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Update (May 3): In total, 107 individuals were charged yesterday in connection with a health care fraud scheme comprising $452 million in false billing. 91 of the accused have been arrested and are in custody.

Health Care Fraud Arrests

(May 2, 2012): News outlets are reporting that approximately 100 people have been arrested and charged with one or more health care fraud schemes involving false billings to Medicare, Medicaid, and other federal health care programs. These health care fraud schemes allegedly resulted in approximately $450 million in fraudulent billings, one of, if not the largest, such busts in the history of federal health care programs. The report goes on to state that arrests were made in seven major metropolitan areas as a  result of an investigation over several months into these issues. CBS is reporting that over 50 of the individuals arrested were in Miami, Florida. Other arrests were made in Los Angeles, Houston, Detroit, Chicago, Tampa Bay, and Baton Rouge. In Baton Rouge, authorities are saying that these arrests were not just the result of several months of investigation, but a capped a six year long process to uncover fraudulent activities. Many of those arrested were allegedly involved in schemes related to the provision of mental health services or home health services.

I. Law Abiding Providers Should Take Note:

Health care providers in the cities where these health care fraud busts occurred should be wary. While HHS-OIG and DOJ have allegedly rooted out criminals from the Medicare program, these events cast a bad light on all providers in these regions. It has been our observation that after a large health care fraud bust such as this, the Zone Program Integrity Contractor (ZPIC) or Recovery Audit Contractor (RAC) for each region enhances their auditing efforts of similar providers. The ZPICs in these regions include SafeGuard Services (Los Angeles, Miami and Tampa), AdvanceMed Corporation (Baton Rouge) and Health Integrity (Houston). All of the ZPICs are capable, aggressive, and will critically audit a provider’s claims for both technical deficiencies and lack of medical necessity issues.

II.  It is Essential That You Develop and Implement an Effective Compliance Program:

Despite the federal government taking health care fraud wrongdoers off of the streets, ZPICs and RACs will likely step up enforcement efforts for other providers. It is therefore imperative that you establish and follow an effective compliance plan in your practice or facility as soon as possible. You should conduct a gap analysis to review your documentation practices, business operations, and relationships with referral sources, suppliers, and other providers. These issues are too important at this point to ignore. Moreover, if you have received a letter from a ZPIC or RAC, it is not something to fool around with or ignore. These entities will often review a sample of claims, deny many or all of those claims, and then extrapolate those findings onto a one or two year universe. This results in alleged overpayments to providers, sometimes in the millions of dollars. If you have received one of these letters, call us today to learn more about the process and your rights and responsibilities.

Liles Parker is a full-service law firm with offices in Washington, DC, Baton Rouge, Houston, and San Antonio. We provide nationwide representation of health care providers in a variety of administrative and other matters, including administrative appeals of ZPIC, RAC, MAC, MIC and Medicaid RAC overpayment determinations. In addition, we provide compliance plan drafting and implementation, compliance training for office staff, and mock audits. For more information, call us today at 1 (800) 475-1906 for a free consultation.

The Senior Medicare Patrol is Here!

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The Senior Medicare Patrol is Reporting Fraud, Waste and Abuse to OIG.

(January 20, 2012):  The Department of Health and Human Services (HHS) has long used reports and complaints from affected patients to further conduct Medicare audits of possible Medicare fraud, waste and abuse. Last June, it was reported that HHS was planning on implementing a “Mystery Shopper” program, with a Federal contractor posing as a potential patient when calling a physician to inquire about possible care. While HHS quickly abandoned this program, it is important to keep in mind that the Centers for Medicare & Medicaid Services (CMS) has actively promoted its “Senior Medicare Patrol” (SMP) program since 1997.

I.   Senior Medicare Patrol:

For over a decade, CMS and the Administration on Aging (AoA) have educated Medicare beneficiaries and their caregivers about how to examine Medicare Explanation of Benefits (EOBs) and other forms they may receive in connection with their care. As part of this effort, seniors have been asked to keep an eye out for possible indications of fraud or abuse, such as double-billing or billing for services not rendered. Recently, CMS announced an additional $9 million grant that will be used to bolster this Medicare audit program and teach more beneficiaries how to assist the government in stamping out fraudulent practices.

II.   States Involved in the Senior Medicare Patrol Program:

As expected, CMS has awarded a majority of grant monies to areas of the country that are hit hardest by Medicare fraud, including California, Texas, Florida, Louisiana, Illinois, Michigan and New York. However, every state is appropriated at least some funding to enhance this Medicare audit program. Moreover, if this program is effective at detecting and deterring fraudulent, wasteful or abusive billing, you can expect that it will be expanded (in terms of both funding and scope) in the future.

IV.   Impact on Your Practice:

To be clear, we all applaud these grass-roots efforts to identify fraud.  Educated seniors could eventually represent CMS’ most effective line of defense in identifying fraud early, before  significant harm can occur. Having said that, at this time, we are concerned that few Medicare beneficiaries are experienced or skilled in deciphering an EOB.  As a result, many reports of possible wrongdoing cited by beneficiaries may merely be a mistake or a misunderstanding of the coding and billing process. Therefore, if you bill in an area that is complex or otherwise confusing (especially to the untrained eye of a beneficiary), there is an increased likelihood that your practice will be audited or reviewed.

V.   Avoiding a Medicare Audit:

Hopefully, beneficiaries will continue to be trained on reading EOBs and CMS will continue its efforts to simplify the EOBs so that patients and their families can more easily understand what has been billed to Medicare. In the meantime, health care providers should diligently work to meet all applicable statutory and regulatory requirements. If you do not already have an effective Compliance Plan in place (as opposed to a non-personalized, non-provider specific plan based on a sample off of the internet), the first step would be for you to conduct a “GAP Analysis” of the services being billed.  The gap analysis would also assess the propriety of your organization’s business practices.  Through the use of a gap analysis, you will be able to identify any areas of concern and take remedial action. This approach can significantly reduce your level of risk.  While no practice is perfect, a GAP Analysis can greatly assist you in identifying problems – thereby increasing the likelihood that a Medicare contractor will find your claims payable if you are subsequently subject to a Medicare audit.

Liles Parker attorneys are skilled in assisting providers with compliance challenges. We can conduct “GAP Analyses,” design and implement effective Compliance Plans and provide compliance training to both your clinical and support staff. In addition, we regularly represent providers in appeals of Medicare postpayment audits of both Part A and Part B claims. Furthermore, our attorneys are often called upon to counsel providers on prepayment review issues, suspension actions and other possible enforcement sanctions. For a free consultation, please call us today at 1 (800) 475-1906.

HEAT Strike Force Enforcement Takes an International Turn

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HEAT Strike Force Enforcement Efforts are Expanding(October 17, 2010):  Medicare’s HEAT Strike Force is actively tracking down wrongdoers. The FBI has announced the arrest of 73 defendants, a number of which are allegedly members of an international organized crime organization, as part of one of the largest criminal health care fraud cases ever brought.  It is estimated that these individuals are responsible for the illegal submission of over $163 million in fraudulent Medicare claims.  As  the FBI’s Press Release reflects:

 “. . .the defendants allegedly stole the identities of doctors and thousands of Medicare beneficiaries and operated at least 118 different phony clinics in 25 states for the purposes of submitting Medicare reimbursements.

 As the FBI noted, the schemes employed by this group included the submission of fraudulent claims for medically unnecessary treatments and services to the Medicare program for payment by these “phantom clinics.”  Indictments covering these defendants were issued in five states, California, Georgia, New Mexico, New York, and Ohio. Commenting on the multi-agency cooperation involved, the Press Release notes that:

“Today’s arrests are an example of the FBI’s ability to conduct cross-program, multi-divisional investigations targeting a national level threat. In recent years, the department has undertaken a series of steps to modernize its organized crime program and enable federal law enforcement to take a unified approach to combating international organized crime. The Attorney General’s Organized Crime Council brings together the leadership of the FBI and eight other federal law enforcement agencies or offices with the department’s prosecutors, focusing high-level attention on these issues. The IOC-2 provides support in the form of information and intelligence to the member agencies that enhance efforts to identify, penetrate and dismantle the most dangerous organized crime groups through investigations and prosecutions. The creation of the International Organized Crime Targeting Committee and the Top International Criminal Organizations Target (TICOT) List, directs investigators and prosecutors to concentrate their limited resources on those international organized crime groups that pose the greatest threat to the United States. The department’s Criminal Division, through the Health Care Fraud Unit, Organized Crime and Racketeering Section, and the Asset Forfeiture and Money Laundering Section, has created new training programs to educate investigators and prosecutors on the intricacies of international organized crime and financial investigations.” (emphasis added).

Commentary: As this case reflects, the ease and extraordinary profits which can be generated from health care fraud is more than enough incentive for international organized crime syndicates to move into this area.  With the uncovering of this scheme, we should fully expect that DOJ, HHS-OIG and the HEAT Strike Force will continue to investigate these relationships.

Liles Parker attorneys represent health care providers around the country in administrative, civil and criminal health law related matters and cases.  Please call us at 1 (800) 475-1906 for a free consultation.

Additional Cities will have HEAT Teams in 2011

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Additional Cities are Getting Medicare Fraud HEAT Teams(August 27, 2010): Additional cities will be getting Medicare fraud HEAT teams. Yesterday, Attorney General Eric Holder and U. S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius conducted the second of a planned series of “Regional Health Care Fraud Prevention Summits.” In addition to these agency heads, participants learned of current and additional planned initiatives from a number of Federal and State law enforcement officials. The first summit was recently conducted in Miami, Florida.  This summit was held in Los Angeles, California. Describing the progress made in the last fiscal year, Attorney General Holder noted that:

 “In just the last fiscal year, we’ve won or negotiated more than $1.6 billion in judgments and settlements, returned more than $2.5 billion to the Medicare Trust Fund, opened thousands of new criminal and civil health care fraud investigations, reached an all-time high in the number of health care fraud defendants charged, and stopped numerous large-scale fraud schemes in their tracks.”

Notably, Attorney General Holder also made it clear that the government’s joint Health Care Fraud Prevention and Enforcement Action Team (HEAT) program is slated for further expansion over the next year.  As he noted:

HEAT’s impact has been recognized by President Obama, whose FY 2011 budget request includes an additional $60 million to expand our network of Strike Forces to additional cities. With these new resources, and our continued commitment to collaboration, I have no doubt we’ll be able to extend HEAT’s record of achievement. And this record is extraordinary. (emphasis added).

These funds will be to supplement, not supplant, existing health care fraud enforcement efforts currently underway. While the additional cities slated for HEAT expansion were not announced at this event, all health care providers, regardless of location, should be especially vigilant in their efforts to ensure that Medicare coding and billing practices regulating the items and services they are providing must comply with applicable statutory and agency requirements.

Should you have questions regarding a health care fraud issue, you may call Robert W. Liles or another of our attorneys. Call 1 (800) 475-1906 for a free consultation.


Medicare Fraud Strike Force Operation Leads to Charges against 94 Defendants, including 4 in South Texas

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Medicare Fraud Strike Force(July 17, 2010): Yesterday, the Department of Justice (DOJ) announced charges against 94 physicians, medical assistants, and health care company owners and executives in connection with alleged false Medicare claims amounting to more than $251 million.  24 defendants from Miami account for approximately $103 million of that amount.  Four defendants were charged in Houston for their alleged roles in a $3 million scheme to submit fraudulent claims for durable medical equipment (DME).  Other arrests were made in Baton Rouge, Brooklyn, and Detroit.

The offenses charged include conspiracy to defraud the Medicare program, criminal false claims, violations of the anti-kickback statutes, and money laundering.  The charges are based on a variety of fraud schemes, including physical therapy and occupational therapy schemes, home health care schemes, HIV infusion fraud schemes and durable medical equipment (DME) schemes.

Announcing the arrests, Attorney General Eric Holder said, “With today’s arrests, we’re putting would-be criminals on notice: Health care fraud is no longer a safe bet.  It’s no longer easy money.  If you choose to engage in health care fraud, you will be found; you will be stopped; and you will be brought to justice.”

The operation was conducted by the joint DOJ-HHS Medicare Fraud Strike Force, multi-agency teams of federal, state, and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.  Strike Force teams are operating in seven cities in the United States: the five aforementioned cities, Los Angeles, and Tampa.  AG Holder noted that the ongoing Strike Force initiative in South Florida has resulted in the indictments of 810 organizations and individuals since March 2007 and uncovered $1.85 billion in improperly billed claims.

The Strike Forces are a part of Health Care Fraud Prevention and Enforcement Action Team (HEAT), which is made up of top level law enforcement and professional staff from the DOJ and HHS and their operating divisions.  HEAT is dedicated to joint efforts across government to both prevent fraud and enforce current anti-fraud laws around the country.

Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one  of our other attorneys at: 1 (800) 475-1906.

President Obama Publicizes Measures to Reduce Medicare Improper Payment Rate

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President Obama Has Directed HHS to Work Toward Reducing the Medicare Improper Payment Rate

(June 8, 2010):  For those of you who missed the first two dozen pronouncements (okay, perhaps a little exaggerated, but still . . . we got the message when Congress made it a False Claims Act violation to hold onto a mere overpayment for more than 60 days), President Barack Obama has again expressed his concern about health care fraud in a national Town Hall video teleconference with Senior Citizens across the country.  He took this opportunity to further publicize his national campaign to combat fraud and misinformation regarding the Medicare program and the Affordable Care Act.  President Obama has specifically ordered HHS to work to reduce the current Medicare improper payment rate.  As the President reiterated, the current Administration is committed to fighting health care fraud.  To that end, the following steps have been taken:

The President has directed HHS to cut the improper payment rate, which tracks fraud, waste and abuse in the Medicare Fee for Services program, in half by 2012.

 The Administration has helped support a renewed partnership between the Federal government and state Attorneys General. Secretary Kathleen Sebelius and Attorney General Eric Holder today sent a letter to state Attorneys General urging them to vigorously prosecute criminals who seek to steal from seniors and taxpayers and pledged the support of federal officials for state efforts.

 A nationwide series of anti-fraud summits hosted by the Departments of Justice and Health and Human Services will bring federal, state and local officials together with representatives from the private sector to discuss tactics to fight fraud. The first summit will be held in Miami with additional summits in Los Angeles, Las Vegas, Detroit, Boston, New York, and Philadelphia.

 A redoubling of efforts by U.S. Attorneys nationwide to coordinate with state and local law enforcement to prevent and prosecute fraud. Today, Attorney General Holder called on U.S. Attorneys to hold regular forums with local officials to discuss how to better crack down on criminals who commit fraud.

Notably, the current administration’s focus on health care fraud enforcement is reminiscent of the major initiatives rolled out during the President Clinton’s terms in office.  As you may recall, Attorney General Reno named “Health Care Fraud” as the Department of Justice’s “#1” white collar priority.  While many voters tend to associate Republicans with “pro-law enforcement” and “anti-fraud” measures, the Democrats have clearly led in the area of health care fraud enforcement.

 In any event, the message is quite clear – the current administration has been, and will continue to be, extremely aggressive in its efforts to identify and prosecute instances of health care fraud.  Unfortunately, with recent changes to the False Claims Act and the Federal Anti-Kickback Statute, incidents that might have otherwise qualified as a mere overpayment may be viewed quite differently today by Federal prosecutors.  Health care providers should diligently work to ensure that their operations, coding and billing activities fully comply with statutory and regulatory requirements.

Health Care AttorneyShould you have any questions regarding these issues, don’t hesitate to contact us.  For a complimentary consultation, you may call Robert W. Liles or one of our other attorneys at: 1 (800) 475-1906.

HEAT Strike Force Update: Prosecutions in Texas Increased in March 2010

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The Texas HEAT Strike Force is actively investigating Medicare fraud throughout the state.(April 3, 2010):  The Federal government is taking considerable steps to stop Medicare fraud and abuse. Notably, the number of publicly-disclosed HEAT Strike Force investigations and prosecutions in Texas significantly increased last month.  Two of the cases disclosed involved mental health professionals:



  • A Psychologist was convicted of health care fraud and money laundering, in connection with various claims fraudulently billed to Medicare.  Instances of improper conduct included billing for more than twenty-four hours of services in a single day; billing for services in a single day which amounted to more than double the normal business hours of the Psychologist’s practice; billing for services allegedly rendered during weekends, holidays, and times that the Psychologist was known to be out-of-town and away from the practice; and, submitting claims for services and evaluations not actually performed by the Psychologist, as required by law.
  • An unlicensed Behavioral Health Counselor was charged with Medicaid fraud for allegedly engaging in aggravated identity theft.  The defendant allegedly improperly acquired Medicaid beneficiaries’ information, including names, addresses and Medicaid numbers, then used the information to file false claims through a behavioral counseling service the defendant owned.  These behavioral counseling services were billed to Medicaid but allegedly not provided to the beneficiaries for which they were billed.

Since being established approximately a year ago, Texas’ HEAT Strike Force has significantly increased both investigations and prosecutions throughout the State.  Both enforcement efforts and the frequency of Medicare audits are anticipated to increase throughout 2010 and following years.  In addition to the increasing number of civil and criminal cases brought by the Texas HEAT Strike Force, the number of administrative overpayment cases is anticipated to grow as well.  It is essential that Texas providers continue their efforts to ensure that both business operations and billing practices fully comply with applicable statutory and regulatory requirements.

Liles Parker PLLC includes a number of attorneys with extensive former experience as Federal and / or State prosecutors.  Should your organization find itself under investigation, call us today for a complimentary consultation at: 1 (800) 475-1906.