Kusserow on Compliance: Annual report on health care fraud and abuse control program

The annual Health Care Fraud and Abuse Control (HCFAC) Program report has been released for 2014, citing results from the joint efforts of the Department of Justice (DOJ) and HHS. In comparison to last year’s report, the current report evidences a drop in the results. The HCFAC report states that the government’s health care fraud prevention and enforcement efforts recovered $2.3 billion in health care fraud judgments and settlements in Fiscal Year (FY) 2014, in addition to administrative impositions in health care fraud cases and proceedings. This was below the record-breaking $4.3 billion reported last year. In addition to the these results and including actions taken in preceding years, there was approximately $3.3 billion being returned to the federal government or paid to private persons. The Medicare Trust Funds received transfers from these recoveries of about $1.9 billion, and an additional amount exceeding a half of a billion dollars in federal money was returned to the U.S. Treasury.

Since the inception of the HCFAC Program in 1997, more than $27.8 billion was returned to the Medicare Trust Funds and Treasury. This means that roughly every dollar spent on health care-related fraud and abuse investigations results in a return of about $7.70 in recoveries for the government, slightly below last year’s reported estimates of $8.10 for each dollar. A large part of the results from investigations was credited to the efforts of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), created in 2009 to prevent fraud, waste, and abuse in Medicare and Medicaid programs. HEAT includes a Medicare Fraud Strike Force team in nine areas across the country.

The DOJ also reported that in FY 2014, it opened 924 new criminal health care fraud investigations, compared to last year’s figure of 1,013. It also filed charges in 496 cases involving 805 defendants, down from 1,910 reported last year. A total of 734 defendants were convicted of health care fraud-related crimes during the year, which was above the 718 convictions reported last year.

In FY 2014, the HHS Office of Inspector General’s investigations resulted in 867 criminal actions against individuals and entities that engaged in crimes related to Medicare and Medicaid, and 529 civil actions, which include false claims and unjust enrichment lawsuits filed in U.S. District Courts, civil monetary penalties (CMP) settlements, and administrative recoveries arising from self-disclosures. In addition, 4,017 individuals and entities were excluded from federal health care programs. Of that number, 1,310 resulted from criminal actions related to Medicare and Medicaid, 432 for patient neglect, and 1744 for license revocation.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.