U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and U.S. Associate Attorney General Thomas J. Perrelli announced a new report showing that the government’s health care fraud prevention and enforcement efforts recovered more than $4 billion in taxpayer dollars in Fiscal Year (FY) 2010. In addition, HHS announced at its press conference new rules authorized by the Affordable Care Act (ACA) that will help the department work proactively to prevent and fight fraud, waste and abuse in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP).
According to an HHS press release, the findings from the annual Health Care Fraud and Abuse Control Program (HCFAC) report are a result of President Obama making the elimination of fraud, waste, and abuse a top priority in his administration. The success of this joint Department of Justice (DOJ) and HHS effort would not have been possible without the Health Care Fraud Prevention & Enforcement Action Team (HEAT), created in 2009 to prevent waste, fraud and abuse in the Medicare and Medicaid programs and to crack down on the fraud perpetrators who are abusing the system and costing American taxpayers billions of dollars.
HHS also conveyed the results of their annual fraud report in a letter to Senator Charles Grassley (R-IA), in response to his questions about DOJ and HHS efforts to combat fraud.
Health Care Fraud and Abuse Control Program Report
More than $4 billion stolen from federal health care programs was recovered and returned to the Medicare Health Insurance Trust Fund, the Treasury, and others in FY 2010. The ACA provides additional tools and resources to help fight fraud that will help boost these efforts, including an additional $350 million for HCFAC activities. The administration is already using tools authorized by the ACA, including:
– Enhanced screenings and enrollment requirements
– Increased data sharing across government
– Expanded overpayment recovery efforts; and
– Greater oversight of private insurance abuses.
HHS and DOJ have enhanced their coordination through HEAT and have expanded Medicare Fraud Strike Force teams since 2009. HHS and DOJ hosted a series of regional fraud prevention summits around the country, and sent letters to state attorneys general urging them to work with HHS and federal, state and local law enforcement officials to mount a substantial outreach campaign to educate seniors and other Medicare beneficiaries about how to prevent scams and fraud.
In FY 2010, the total number of cities with Strike Force prosecution teams was increased to seven, all of which have teams of investigators and prosecutors dedicated to fighting fraud. The Strike Force teams use advanced data analysis techniques to identify high-billing levels in health care fraud hot spots so that interagency teams can target emerging or migrating schemes along with chronic fraud by criminals masquerading as health care providers or suppliers. Strike Force enforcement accomplishments in all seven cities during FY 2010 include:
- 140 indictments involving charges filed against 284 defendants who collectively billed the Medicare program more than $590 million;
- 217 guilty pleas negotiated and 19 jury trials litigated, winning guilty verdicts against 23 defendants; and
- Imprisonment for 146 defendants sentenced during the fiscal year, averaging more than 40 months of incarceration.
Including Strike Force matters, federal prosecutors opened 1,116 criminal health care fraud investigations as of the end of FY 2010, and filed criminal charges in 488 cases involving 931 defendants. A total of 726 defendants were convicted for health care fraud-related crimes during the year.
In addition to these criminal enforcement successes, 2010 was a record year for recoveries obtained in civil health care matters brought under the False Claims Act—more than $2.5 billion, which is the largest in the history of the Department of Justice.
New Affordable Care Act Rules to Fight Fraud
The provisions of the ACA implemented through a final rule include new provider screening and enforcement measures to help keep bad actors out of Medicare, Medicaid and CHIP. The final rule also contains important authority to suspend payments when a credible allegation of fraud is being investigated.
CMS Administrator Donald Berwick, M.D., asserted that the new law gives CMS the “resources to help detect fraud and stop criminals from getting into the system in the first place.” He further added that the ACA’s new authorities allow CMS to develop sophisticated, new systems of monitoring and oversight to not only help CMS crack down on fraudulent activity scamming these programs, but also help to prevent the loss of taxpayer dollars across the board for millions of American health care consumers.”
Specifically, the final rule:
- Creates a rigorous screening process for providers and suppliers enrolling Medicare, Medicaid and CHIP to keep fraudulent providers out of those programs. Types of providers and suppliers that have been identified in the past as posing a higher risk of fraud, for example durable medical equipment suppliers, will be subject to a more thorough screening process.
- Requires new enrollment process for Medicaid and CHIP providers. Under the Affordable Care Act, States will have to screen providers who order and refer to Medicaid beneficiaries to determine if they have a history of defrauding government. Providers that have been kicked out of Medicare or another State’s Medicaid or CHIP will be barred from all Medicaid and CHIP programs.
- Temporarily stops enrollment of new providers and suppliers. Medicare and state agencies will be on the lookout for trends that may indicate health care fraud – including using advanced predictive modeling software, such as that used to detect credit card fraud. If a trend is identified in a category of providers or geographic area, the program can temporarily stop enrollment as long as that will not impact access to care for patients.
- Temporarily stops payments to providers and suppliers in cases of suspected fraud. Under the new rules, if there has been a credible fraud allegation, payments can be suspended while an action or investigation is underway.
Several days after the regulation is published, the published version of the regulation will be available on the National Archives website. CMS will continue to take public comments on limited areas of this final rule for 60 days. In addition, HHS has a fact sheet about the new tools from the ACA to fight fraud in the Medicare system.
The ACA provides the Office of the Inspector General (OIG) with the authority to impose stronger civil and monetary penalties on those found to have committed fraud. Under the new law:
- Providers and suppliers who lie on their application to enroll in Medicare or Medicaid may be excluded from the programs.
- Providers who identify an overpayment from Medicare or Medicaid but do not return it within 60 days may be subject to new fines and penalties.
- Providers who are terminated from a state’s Medicaid program will be terminated from Medicaid programs in other states.
Additionally, the ACA created tough new rules and sentences for criminals by increasing the Federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1,000,000 in losses. The law makes obstructing a fraud investigation a crime and makes it easier for the government to recapture any funds acquired through fraudulent practices. And the law makes it easier for the DOJ to investigate potential fraud or wrongdoing at facilities like nursing homes.
The new law also provides enhanced tools and authorities to address abuses of multiple employer welfare arrangements and protect employers and employees from insurance scams. It also gives new powers to the Secretary and Inspector General to investigate and audit the health insurance exchanges.
Ultimately, with numerous companies having entered into corporate integrity agreements with DOJ and HHS/OIG for the next several years, the landscape of fraud and abuse will likely change as companies begin to implement compliance polices. Accordingly, the government will continue to ramp up its efforts to fight fraud and abuse by focusing on oversight of these compliance programs and implementing the new measures stated above, largely because the recoveries are helping to pay for the ACA.