HHS OIG Publishes Semiannual Report to Congress Detailing Almost $6 Billion in Fraud Recoveries

The Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) recently published its Fall 2019 Semiannual Report to Congress. The Report covers the period of April 1, 2019 through September 30, 2019, and identifies “significant problems, abuses, deficiencies, remedies, and investigative outcomes relating to the administration of HHS programs and operations” for that period.

The report highlighted a “first-of-its-kind” investigation into a major genetic testing fraud scheme, which the report characterized as “the one of the largest healthcare schemes ever charged.” In that case, 35 defendants, including 9 doctors, associated with telemedicine companies and labs were charged with fraudulently billing Medicare for cancer-related genetic tests. The scheme, which involved the payment of illegal kickbacks and bribes, resulted in a more than $2.1 billion loss.

Other areas highlighted in the report include:

Preventing Opioid Misuse and Promoting Access to Treatment: OIG used a variety of investigations, evaluations and audits, including “advanced data analytics methods” to assess broad usage patterns and detect problems. In one instance, a pharmaceutical company agreed to pay $700 million to settle a False Claims Act (“FCA”) case after it allegedly illegally marketed and promoted Suboxone. The alleged wrongful behavior included knowing promotion of Suboxone to physicians who were prescribing in an unsafe manner, and making false and misleading claims to delay generic competition.

Protecting Children in the Departments Care: OIG determined that certain care provider facilities faced challenges in treating the mental health needs of children, especially those that have experienced significant trauma.

Fighting Fraud to Protect Medicare and Medicaid: OIG examined activity that could unnecessarily raise costs or put beneficiaries at risk. To this end, OIG participated in several enforcement actions, including a telemedicine scheme related to unnecessary prescriptions for orthotic braces, the above-mentioned genetic testing fraud scheme, and a scheme by an inpatient rehabilitation company to submit false patient diagnoses to bolster Medicare payments.

Ensuring Appropriate Use of Medicaid Funds: OIG reviewed Center for Medicare and Medicaid Services (“CMS”) and state records to determine that funds were spent in accordance with payment rules, and on behalf of eligible beneficiaries. They found that Florida made hundreds of millions of dollars in unallowable payments to a hospital under a Medicaid waiver program, and that New York incorrectly treated some beneficiaries as Medicaid-eligible.

Protecting Beneficiaries from Abuse, Neglect and Unsafe Conditions: Here, OIG found that instances of potential abuse and neglect at nursing facilities were not always properly reported and investigated, and that CMS could better use data to identify instances of abuse and neglect.

Promoting Access to High-Quality Care: OIG found quality-of-care deficiencies among hospice providers were prevalent, and found gaps in Medicare protections for hospice patients.

Safeguarding the Security and Integrity of Medical Research: In this area, OIG noted its role in conducting oversight of NIH grant programs and operations in an effort to address concerns about the integrity of taxpayer-funded research and intellectual property. Specifically, OIG found that the National Institutes of Health (“NIH”) has improved its review of financial conflicts of interest, and found strengths and limitations in NIH’s vetting of peer reviewers.

The Report indicates that these activities have resulted in $819.15 million in expected audit recoveries, $914.48 million in questioned costs, and $836.42 million in potential savings during the reporting period. In addition, the OIG investigative work led to $5.04 billion in expected investigative recoveries, 809 criminal actions, 2,640 exclusions from healthcare programs, and 695 civil actions. Finally, the OIG reported 582 new audit and evaluation recommendations, and 341 recommendations implemented by HHS Operating Divisions.

In reference to the report, Joanne Chiedi, Acting Inspector General, noted that OIG is continuing its “enterprise-wide oversight of HHS’s over $1 trillion portfolio and its bold pursuit of those who cheat HHS programs or harm HHS beneficiaries.”