Government enhances crackdown on healthcare fraud

November 1, 2010

The U.S. government is strengthening its crackdown on practitioners who scam federal healthcare programs, with new muscle provided by the 2010 healthcare reform law and a determination to shut down fraudulent or erroneous claims, which exceeded $24 billion in 2009.

Key Points

While the government's antifraud initiatives have grown in intensity in recent years, according to Daniel R. Levinson, inspector general at the Department of Health and Human Services (HHS), the new Affordable Care Act (ACA) provides additional resources and authority designed to crush healthcare fraud schemes that contribute to the skyrocketing cost of healthcare in the United States.

Testifying before the House Energy & Commerce health subcommittee on Sept. 22, Levinson outlined the steps that HHS is taking to implement the antifraud provisions of the ACA, which will build upon efforts already under way.

"Healthcare fraud schemes commonly include billing for services that were not provided or were not medically necessary, purposely billing for a higher level of service than what was provided, misreporting costs or other data to increase payments, paying kickbacks and/or stealing providers' or beneficiaries' identities," Levinson said. "The perpetrators of these schemes range from street criminals, who believe it is safer and more profitable to steal from Medicare than trafficking in illegal drugs, to Fortune 500 companies that pay kickbacks to physicians in return for referrals."

Levinson told the committee that OIG "has a strong record" of investigating these corporate and institutional frauds, which often involve complex billing frauds, kickbacks, accounting schemes, illegal marketing and physician self-referral arrangements. He said OIG is seeing an increase in quality of care cases involving allegations of substandard care.

Expanded capabilities

The ACA provides expanded law enforcement authorities, opportunities for greater coordination among federal agencies and enhanced funding for the Health Care Fraud and Abuse Control (HCFAC) program, Levinson said. There are also new authorities for HHS and new requirements for healthcare providers, suppliers and other entities to promote the integrity of Medicare, Medicaid and other federal healthcare programs.

He gave these examples:

Data Team

Meanwhile, HHS has created a new Data Team to support the work of its antifraud task force. The Data Team uses high-tech tools and criminal intelligence to identify locations where billing for certain services is more than 10 times the national average. Currently, Medicare Fraud Strike Forces have been established in seven fraud hot spots - Miami; Los Angeles; Detroit; Houston; Brooklyn, N.Y.; Tampa, Fla.; and Baton Rouge, La.

Levinson testified that from 1997 through 2009, the HCFAC program has returned more than $15.6 billion to the government through audit and investigative recoveries, with a return on investment of more than $4 for every $1 invested. Now, under the new law, the program will receive $10 million per year for 10 years under ACA and an additional $250 million for fiscal years 2011-2016 under the Health Care and Education Reconciliation Act of 2010.

"With our share of this new funding, OIG will expand our Medicare and Medicaid investigations, audits, evaluations, enforcement and compliance activities to support our efforts toward improving healthcare program integrity," Levinson said.

Bob Gatty, former congressional aide, covers Washington for businesses specializing in healthcare and related issues. Contact him at bob@gattyedits.com