Anti-fraud work yields $4B in savings for CMS

The government's healthcare fraud prevention and enforcement efforts recovered more than $4 billion in taxpayer dollars for the Medicare, Medicaid and Children's Health Insurance Program in 2010, the largest sum ever recovered in a single year, according to findings published in the government's Health Care Fraud and Abuse Control Program (HCFAC) report.

Health and Human Services Secretary Kathleen Sebelius and U.S. Associate Attorney General Thomas J. Perrelli made the announcement Monday. They also announced new rules authorized by the Affordable Care Act that will bolster the government's efforts to fight fraud, waste and abuse in those programs.

Sebelius and Perrelli attributed the success of the joint Department of Justice and HHS effort to the Health Care Fraud Prevention & Enforcement Action Team (HEAT), created in 2009.

"President Obama has made it very clear that fraud and abuse of taxpayers' dollars are unacceptable," said Sebelius. "And for too long, our fraud prevention efforts have focused on chasing after taxpayer dollars after they have already been paid out. Thanks to the President's leadership and the new tools provided by the Affordable Care Act, we can focus on stopping fraud before it happens."

[One GOP Senator disagrees. See GOP puts heat on Obama's 'costly' Medicare fraud-fighting technology.]

"Our aggressive pursuit of healthcare fraud has resulted in the largest recovery of taxpayer dollars in the history of the Justice Department," said Perrelli. "These actions are in large part because of the great work being led by the Health Care Fraud Prevention and Enforcement Action Team. Through this initiative, we are working in partnership with government, law enforcement and industry leaders and the public to protect taxpayer dollars, control healthcare costs and ensure the strength and integrity of our most essential healthcare programs."

The HHS and DOJ have coordinated their efforts through HEAT and Medicare Fraud Strike Force teams since 2009. In 2010, the number of cities with strike force prosecution teams was increased to seven. The  teams use data analysis techniques to identify high-billing levels in healthcare fraud hotspots so that interagency teams can target emerging or migrating schemes along with chronic fraud by criminals masquerading as healthcare providers or suppliers.

During 2010 the strike force operations resulted in:

• 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 healthcare fraud investigations as of the end of 2010 and filed criminal charges in 488 cases involving 931 defendants. A total of 726 defendants were convicted for healthcare fraud-related crimes during the year.

[One of the largest Medicare fraud sting occcurred in October 2010. See: IT aid to largest Medicare fraud sting in history.]

In addition to the criminal enforcement successes, 2010 was a record year for recoveries obtained in civil healthcare matters brought under the False Claims Act – more than $2.5 billion, which is the largest in the history of the DOJ.

New tools in the Affordable Care Act
The Affordable Care Act provides tools and resources to help fight fraud, including an additional $350 million for HCFAC activities. The administration is already using those tools, including enhanced screenings and enrollment requirements, increased data sharing, expanded overpayment recovery efforts and greater oversight of private insurance abuses.

"Thanks to the new law, CMS now has additional resources to help detect fraud and stop criminals from getting into the system in the first place," said CMS Administrator Donald Berwick, MD. "The Affordable Care Act's new authorities allow us to develop sophisticated new systems of monitoring and oversight to not only help us crack down on fraudulent activity scamming these programs, but also help us to prevent the loss of taxpayer dollars across the board for millions of American healthcare consumers."

According to the HHS, 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 a new enrollment process for Medicaid and CHIP providers. Under the ACA, states will have to screen providers who order and refer to Medicaid beneficiaries to determine if they have a history of defrauding the 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 healthcare fraud – including using 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 it won't 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 under way.