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Fraud prevention, enforcement efforts recover $3.3B in FY 2014

March 30, 2015
by Lois A. Bowers, Senior Editor
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The government’s healthcare fraud prevention and enforcement efforts recovered $3.3 billion in taxpayer dollars in fiscal year (FY) 2014 from individuals and companies that attempted to defraud federal health programs, including programs serving seniors, persons with disabilities or those with low income. That’s according to Attorney General Eric Holder and U.S. Department of Health and Human Services (HHS) Secretary Sylvia M. Burwell. Their remarks came as the Health Care Fraud and Abuse Control (HCFAC) Program annual report became available.

The recoveries reflect a two-pronged strategy to combat fraud and abuse, according to the government. Under new authorities granted by the Affordable Care Act (ACA), the administration continues to implement programs that move away from “pay and chase” efforts targeting fraudsters to preventing healthcare fraud and abuse in the first place. In addition, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), run jointly by the HHS Office of the Inspector General and the Department of Justice (DOJ), is changing how the federal government fights certain types of healthcare fraud. These cases are being investigated through real-time data analysis in lieu of a prolonged subpoena and account analyses, resulting in significantly shorter periods of time between fraud identification, arrest and prosecution.

Sylvia Mathews Burwell HHS secretary“New enrollment screening techniques and computer analytics are preventing fraud before money ever goes out the door,” Burwell said in a statement.

“Together with the continued support of Congress and our partners at the DOJ, we’ve cracked down on tens of thousands of healthcare providers suspected of Medicare fraud—all of which are helping to extend the life of the Medicare Trust Fund,” she added.

Some of the recent efforts:

  • Expanded Medicare Strike Force. Increased funding from the administration and Congress has allowed HHS and the DOJ to build on early successes of the Medicare Strike Force by expanding into nine geographic territories: Miami; Los Angeles; Detroit; Houston; Brooklyn, New York; southern Louisiana; Tampa, Florida; Chicago; and Dallas. Through the Strike Force and other efforts in FY 2014, the DOJ opened 924 new criminal healthcare fraud investigations, federal prosecutors filed criminal charges in 496 cases involving 805 defendants add 734 defendants were convicted of healthcare fraud‑related crimes. 
  • False Claims Act. In 2014, the Civil Division of the DOJ and the United States Attorneys’ Offices obtained $2.3 billion in settlements and judgments from civil cases involving fraud and false claims against federal healthcare programs such as Medicare and Medicaid. In many of these cases, the department also helped recover additional monies for state healthcare programs. In FY 2014, the DOJ continued its enforcement of the civil False Claims Act and the Federal Food, Drug and Cosmetic Act, and it opened 782 new civil healthcare fraud investigations. 
  • Centers for Medicare & Medicaid Services (CMS) efforts. CMS has put safeguards in place to ensure that only legitimate providers are enrolling in Medicare. The ACA required a CMS revalidation of all existing 1.5 million Medicare suppliers and providers under new screening requirements, which CMS expects to complete by tomorrow. As a result of this and other proactive initiatives, CMS has deactivated 470,000 enrollments and revoked nearly 28,000 enrollments to prevent certain providers from re-enrolling and billing the Medicare program. Both of these actions immediately stop billing. A provider with deactivated billing privileges can reactivate at any time, and a revoked provider is barred from re-entry into Medicare for one to three years. CMS also has issued a regulation requiring prescribers of Part D drugs to enroll in Medicare and undergo screening. CMS also continued the FY 2014 temporary moratoria on the enrollment of new home health or ambulance service providers in six fraud hot spots: Miami, Chicago, Dallas, Houston, Detroit and Philadelphia (which includes some counties in New Jersey). The extension will allow CMS to continue its actions to suspend payments or remove providers from the program before allowing new providers into potentially over-supplied markets. Similar to the technology used by credit card companies, CMS is using its Fraud Prevention System to apply advanced analytics to all Medicare fee-for-service claims on a streaming, national basis. The Fraud Prevention System identifies aberrant and suspicious billing patterns, which, in turn, trigger actions that can be implemented swiftly to prevent payment of fraudulent claims. In the second year, the system saved $210.7 million, almost double the amount identified during the first year of the program.

The HCFAC program was created in 1997, and in its lifetime, more than $27.8 billion has been returned to the Medicare Trust Fund. For every dollar spent on healthcare-related fraud and abuse investigations in the past three years, the administration recovered $7.70, about $2 higher than the average return on investment in the HCFAC program since its inception. The amount also is the third-highest return on investment in the life of the program.