Health Care Fraud, Record $4.2 Billion Recovered In 2012, USA

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Main Category: Medicare / Medicaid / SCHIP
Also Included In: Litigation / Medical Malpractice
Article Date: 12 Feb 2013 - 0:00 PST


Health and Human Services and the Department of Justice say that a record-breaking $4.2 billion were recovered as a result of joint efforts to address health care fraud in 2012.

Health and Human Services (HHS) Secretary Kathleen Sebelius and Attorney General Eric Holder issued a report which showed that for every dollar the US government spent on health care-related fraud and abuse investigations over the last 36 months, it got $7.90 back. This is a record over a three-year period since the HCFAC (Health Care Fraud and Abuse) Program began sixteen years ago.

Is this huge haul a sign of better coordination among public authorities, or does it reflect an increase in criminality? The Justice Department and HHS believe it is a sign of the government's health care fraud prevention and enforcement efforts. $4.2 billion (2012) is an increase from $4.1 billion in 2011.

The money was recovered from companies and individuals who had tried to defraud federal health programs aimed at seniors and taxpayers for payments they were not entitled to receive. $14.9 billion have been recovered over the last four years, compared to $6.7 billion during the previous four-year period. Over $23 billion have been returned to the Medicare Trust Funds since 1997 by the HCFAC Program.

According to the Office of the Inspector General, US Department of Health & Human Services, during the fiscal year 2012:

• The Federal government won/negotiated more than $3.0 billion in health care fraud judgments and settlements, and it attained additional administrative impositions in health care fraud cases and proceedings.


• About $4.2 billion were deposited with the Department of the Treasury and the Centers for Medicare & Medicaid Services, transferred to other Federal agencies administering health care programs, or paid to private persons during the fiscal year.


• Of the $4.2 billion, the Medicare Trust Funds received transfers of approximately $2.4 billion during this period, and over $835.7 million in Federal Medicaid money was similarly transferred separately to the Treasury as a result of these efforts.


• The HCFAC account has returned over $23.0 billion to the Medicare Trust Funds since the program started in 1997.

According to HHS, "These findings, released today in the annual HCFAC Program report, are a result of President Obama making the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration."

HEAT (Health Care Fraud Prevention and Enforcement Action Team) was created in 2009 to fight fraud, abuse and waste in the Medicaid and Medicare programs, and to close in on people and entities which abuse the system and cost the American taxpayers billions of dollars.

Attorney General, Eric Holder, said:

"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. 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."

HHS Secretary Sebelius said:

"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. This fight against fraud strengthens the integrity of our health care programs and helps us fulfill our commitment to our seniors."

According to HHS, the Obama Administration is also using tools that the Affordable Care Act authorized to combat fraud, including better data sharing across government departments, enhanced screenings and enrollment requirements, expanded recovery efforts for excessive payments, and closer monitoring of private insurance abuses.

Since 2009, through HEAT, the Justice Department has increased the number of Medicare Fraud Strike Force teams to nine. According to HHS, "The Justice Department's enforcement of the civil False Claims Act and the Federal Food, Drug and Cosmetic Act have produced similar record-breaking results. These 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."

Advanced Data Analysis Techniques Used to Catch Fraudsters

The experts utilized the latest data analysis techniques to identify overcharging in health care fraud hot-spots so that interagency teams could focus on emerging or migrating schemes, as well as long-term fraud by criminals pretending to be honest health care suppliers or providers.

In June 2011, the Federal Government announced the adoption of similar technology to that used by credit card companies - predictive modeling - which helps identify potentially fraudulent Medicare claims on a nationwide basis. This technology, officials claimed, is particularly good at stopping fraudulent claims before they are paid.

HHS Secretary Sebelius and Attorney General Holder announced in July 2012 the launch of a partnership among leading private health insurance organizations, state officials, the federal government and other anti-fraud groups to share data and best practice to enhance detection capabilities of payments to scams that cut across private and public payers. Their aim was not only to catch criminals during their illegal activities, but also to prevent crime.

The Justice Department opened 1,131 new criminal health care fraud investigations in 2012, which involved 2,148 potential defendants. 826 defendants were charged and convicted of health care fraud-related crimes in 2012. During the same year, 885 new civil investigations were also opened.

Major takedown in 2012

A takedown involving the highest number of false Medicare billings in history of the strike force program occurred in 2012. It involved 107 people, including nurses and doctors in seven cities. They were charged for taking part in Medicare fraud schemes totaling approximately $452 billion in fraudulent billings. During that takedown, HHS also suspended or took other action against 52 providers to suspend payments until the investigation was completed.

As indictments were unsealed across the country, scores of people either surrendered or turned themselves in (the linked article in Medical News Today is from October 2012, before the year ended, so the figures quoted were just until that date).

The anti-fraud teams were based in nine cities, they carried out operations that led to 117 indictments, informations and complaints involving charges against 278 defendants who were accused of charging Medicare over $1.5 billion in illegal schemes.

Last year, 251 guilty pleas and 13 jury trials were brought to court. Twenty-nine defendants had guilty verdicts against them in strike force cases. Those found guilty were given prison sentences averaging over 48 months.

Report Medicare Fraud Now
Office of Inspector General
Call: 800-447-8477
TTY: 800-377-4950
Online: Report Fraud

Written by Christian Nordqvist
Copyright: Medical News Today
Not to be reproduced without permission of Medical News Today

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