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Federal Health Care Fraud and Abuse Enforcement Made a Strong Showing in FY 2016

According to a report released last week, the Health Care Fraud and Abuse Control Program (HCFAC) returned over $3.3 billion to the federal government or private individuals as a result of its health care enforcement efforts in fiscal year (FY) 2016, its 20th year in operation. Established by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) under the authority of the Department of Justice (DOJ) and the Department of Health and Human Services (HHS), HCFAC was designed to combat fraud and abuse in health care. The total FY 2016 return represents an increase over the $2.4 billion amount reported by the agencies for FY 2015.

The report serves as a useful resource to understand the federal health care fraud enforcement environment. It highlights costs and returns of federal health care fraud enforcement, providing not only amounts recovered from settlements and awards related to civil and criminal investigations but also outlining funds allocated for each departmental function covered by the HCFAC appropriation. Total HCFAC allocations to HHS for 2016 totaled $836 million (approximately $255 million of which was allocated to the HHS Office of Inspector General (OIG)) and allocations to DOJ totaled $119 million. The report touts a return on investment of $5 for every dollar expended over the last three years.

The report also includes summaries of high-profile criminal and civil cases involving claims of violations of the False Claims Act (FCA), among other claims. The cases include OIG and HHS enforcement actions as well as some of those pursued by the Medicare Fraud Strike Force, which is an interagency task force composed of OIG and DOJ analysts, investigators, and prosecutors. Successful criminal and civil investigations touch virtually all areas of the health care industry from various health care providers to pharmaceutical companies, device manufacturers and health maintenance organizations, among others.

The report follows an announcement by the DOJ last December declaring FY 2016’s recovery of more than $4.7 billion in settlements and judgments from civil cases involving fraud and false claims in all industry sectors to be its third highest annual recovery, the bulk of which, $2.5 billion, resulted from enforcement in the health care industry.




U.S. Departments of Justice and Health and Human Services Issue FY 2014 Health Care Fraud and Abuse Control Program Report

Last week, the U.S. Departments of Justice (DOJ) and Health and Human Services (HHS) announced that the Health Care Fraud and Abuse Control (HCFAC) Program has recovered over $27.8 billion since its inception in 1996.  In FY 2014 alone, with a collective budget of $571.7 million, HCFAC efforts recovered $3.3 billion from individuals and companies facing allegations of fraud related to health care.  Jointly directed by the Attorney General and Secretary of HHS, HCFAC seeks to:

  • Coordinate federal, state and local law enforcement efforts relating to health care fraud and abuse with respect to health plans;
  • Conduct investigations, audits, inspections and evaluations relating to the delivery of and payment for health care in the United States;
  • Facilitate enforcement of all applicable remedies for such fraud; and
  • Provide education and guidance regarding compliance with current health care law.

Over the past three years, for each dollar spent on health care-related fraud and abuse investigations the government has recovered $7.70.  In other words, HCFAC efforts since 2012 have given the United States a staggering 770 percent return on investment.

Utilizing a two-pronged approach to combat fraud and abuse, ushered in with new authorities granted by the Affordable Care Act (ACA), the United States is increasingly implementing cross-departmental preventative measures to curtail health care fraud and abuse, and reduce “pay and chase” efforts initiated after payments are made on claims that are identified as potentially fraudulent.  For example, the Health Care Fraud Prevention and Enforcement Action Team (HEAT)—a program jointly initiated in 2009 by DOJ and HHS—now investigates cases using real-time data analysis to identify fraudulent claims before payments are made to the provider.  This real-time analysis could replace lengthy subpoena, production and account assessment; correspondingly, investigators are moving much faster from fraud identification, to arrest and prosecution.  The HEAT program is charged with the following:

  • Marshaling significant resources across government to prevent waste, fraud and abuse in the Medicare and Medicaid programs;
  • Reducing “skyrocketing” health care costs and improving the quality of care;
  • Highlighting best practices by providers and public sector employees; and
  • Building upon existing partnerships between DOJ and HHS, like HCFAC’s Medicare Fraud Strike Force.

As a complement to the HEAT program’s efforts on the civil side, the Medicare Fraud Strike Force program utilizes investigative and analytical resources from the HHS Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), and DOJ’s Criminal Division’s Fraud Section.  Initially launched as a pilot program in selection regions, Strike Forces now operates in nine geographic areas—Brooklyn, NY; Chicago, IL; Dallas, TX; Detroit, MI; Houston, TX; Los Angeles, CA; Miami, FL; Southern Louisiana; and Tampa, FL.  Strike Force prosecutors have filed over 963 cases, obtained 1,443 guilty pleas [...]

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Be Prepared: More Oversight is Looming

Health care fraud enforcement continues to be a priority for the federal government and is poised to expand even more.  In the fiscal 2015 budget, Congress more than doubled the appropriation to the Health Care Fraud and Abuse Control (HCFAC) program to $672 million, providing more money for oversight activities to the U.S. Centers for Medicare and Medicaid Services (CMS), the U.S. Department of Justice (DOJ), and the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS).  Expanding oversight, ever-increasing numbers of law enforcement actions, and with greater public access to Medicare claims data and the information contained in the Open Payments database, indicate changes in the enforcement and compliance landscape to be aware of in proactively managing the organization’s compliance and risk assessment activities.

Ensuring that the organization’s compliance program is up-to-date and up-to-task in proactively identifying problems and making timely decisions about corrective actions and potential government disclosures is key to protecting the organization.  In our most recent Over the Horizon: Fraud Enforcement Trends for 2015 article, a team of health care experts examine enforcement trends to watch and proactive steps to take in greater detail.

Read the full article.




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