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Annual Report Details Record Breaking Success in Health Care Fraud Prevention

The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), required the establishment of a national Health Care Fraud and Abuse Control Program (“HCFAC”). The HCFAC Program is a joint Department of Justice (“DOJ”) and Health and Human Services (“HHS”) coordination of federal, state and local law enforcement activities to combat fraud committed against all health plans, both public and private.

The DOJ and HHS are required, under HIPAA, to release an annual report which details the amounts deposited and appropriated to the Medicare Trust Fund, among other findings.

This year’s annual report was released on February 11th and it showed a “record breaking year” in the program’s sixteen year history. The report revealed that for every health care fraud enforcement dollar spent over the last three years, the government recovered $7.90. That is over a 50% return on investment. Additionally, the government recovered $4.2 billion taxpayer dollars which was stolen or otherwise improperly obtained from federal health care programs and returned them to the Medicare Trust Fund, the Treasury, and others. This was the highest recovered amount to date.

The statistics and dollar values in the report are quite staggering. They serve as a valuable illustration of the serious nature of fraud and abuse in the health care system. In the 2012 fiscal year alone, the HCFAC program:

  • Obtained over $3.0 billion in federal health care fraud judgments and settlements.
  • Opened 1,131 new criminal health care fraud investigations
  • Opened 885 civil health care fraud investigations
  • Successfully convicted 826 defendants of health care fraud-related crimes
  • Excluded 3,131 individuals and entities from federal health care programs

 The success of the joint DOJ and HHS effort was made possible by the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”), created in 2009, and the Fraud Strike Force (a multi-agency team of federal, state, and local investigators designed to fight Medicare fraud). HEAT and the strike force teams use advanced data analysis techniques to identify high-billing levels in health care fraud hot spots. They are also now using tools authorized by the Affordable Care Act, such as enhanced screenings and enrollment requirements, and greater oversight of private insurance abuses to crack down on fraud.

 In 2012, CMS also began the process of screening all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening System. The system quickly identifies ineligible and potentially fraudulent providers and suppliers; as a result, nearly 150,000 ineligible providers have been eliminated from Medicare’s billing system.

The report is a real reminder of the government’s continued commitment to combatting health care fraud. HHS Secretary Kathleen Sebelius stated, “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.” After review of the annual report, it is clearly evident why a compliance plan and proactive strategies for fraud prevention are necessary to protect your health care entity. 

Chris Shaughnessy

Christopher J. Shaughnessy is an attorney at McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Mr. Shaughnessy concentrates his practice area in health care law and is located in the firm’s Lexington office.  He can be reached at cshaughnessy@mmlk.com or at (859) 231-8780, ext. 1251. 

This article is intended as a summary of federal law activities and does not constitute legal advice. 

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