U.S. gov't collected $4.2 billion in healthcare-related fraud charges in 2012

For every dollar spent on healthcare-related fraud and abuse investigations in the last three years, the government recovered $7.90, according to a new report released by U.S. Attorney General Eric Holder and U.S. Department of Health and Human Services’ (HHS) Secretary Kathleen Sebelius.This is the highest three-year average return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program.

The government’s healthcare fraud prevention and enforcement efforts recovered a record $4.2 billion in taxpayer dollars in fiscal year (FY) 2012, up from nearly $4.1 billion in FY 2011, 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. Since 1997, the HCFAC Program has returned more than $23 billion to the Medicare Trust Funds.

Approximately $4.2 billion stolen or otherwise improperly obtained from federal healthcare programs was recovered and returned to the Medicare Trust Funds, the Treasury and others in FY 2012. This is an unprecedented achievement for the HCFAC Program, a joint Justice Department and HHS effort to coordinate federal, state and local law enforcement activities to fight healthcare fraud and abuse. 

The administration is using tools authorized by the Patient Protection and Affordable Care Act (PPACA) to fight fraud, including enhanced screenings and enrollment requirements, increased data sharing across the government, expanded recovery efforts for overpayments and greater oversight of private insurance abuses.  

In FY 2012, the DOJ opened 1,131 new criminal healthcare fraud investigations involving 2,148 potential defendants, and a total of 826 defendants were convicted of healthcare 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 healthcare 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.

CMS also established the Command Center to improve healthcare-related fraud detection and investigation, drive innovation and help reduce fraud and improper payments in Medicare and Medicaid.

From May 2011 through the end of 2012, more than 400,000 providers were subject to the new screening requirements and nearly 150,000 lost the ability to bill the Medicare program due to the PPACA requirements and other proactive initiatives.