Feds net $5 billion in health care fraud judgments, settlements last year

Federal investigators won or negotiated more than $5 billion in health care fraud judgments and settlements – a record amount – in the 12 months ending Sept. 30, 2021.

The figure was in the Annual Report of the Departments of Health and Human Services (HHS) and Justice (DOJ), which detailed fiscal year 2021 actions in the federal Health Care Fraud and Abuse Control Program (HCFAC). The agencies joined forces with authority through the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

“In its 25th year of operation, the program’s continued success confirms the soundness of a collaborative approach to identifying and prosecuting the most egregious instances of health care fraud, preventing future fraud and abuse, and protecting program beneficiaries,” said the report published this month.

In its 25-year history, HCFAC has netted more than $48.596 billion in health care fraud judgments and settlements, according to figures from the annual reports.

By the numbers

The fiscal year 2021 report included a tally of dollars and court cases generated by the HHS and DOJ investigations.

• $1.9 billion – Amount returned to the federal government or private payers. That amount included:
• $1.2 billion – Amount returned to the Medicare Trust Funds
• $98.7 million – Medicaid money transferred to the federal Centers for Medicare & Medicaid Services.

Among the highlights for DOJ:

• 831 – New criminal health care fraud investigations opened
• 462 – Cases with criminal charges filed
• 741 – Defendants in criminal cases
• 312 – Defendants convicted of health care fraud-related crimes
• 805 – New civil health care fraud investigations
• 1,432 – Civil health care fraud matters pending at the end of the fiscal year
• 559 – Operational disruptions of criminal fraud organizations by the FBI
• 107 – Health care fraud criminal enterprises dismantled

For the HHS Office of the Inspector General:

• 504 – Criminal actions against individuals or entities that engaged in crimes related to Medicare and Medicaid
• 669 – Civil actions including false claims, unjust enrichment lawsuits and civil monetary penalty settlements
• 1,689 – Number of people and entities excluded from participating in Medicare, Medicaid and other federal health care programs due to criminal convictions related to programs, beneficiary abuse or neglect, and health care licensure revocations

Pandemic problems

Related to COVID-19, HHS and DOJ targeted additional, unnecessary services; unnecessary laboratory testing; health care technology schemes; and wrongly obtaining health care relief funds.

The agencies acknowledged HHS in fiscal year 2021 “had some of the highest expenditures among all federal agencies at $2.8 trillion, including increased supplemental funding for the pandemic response.” The figure came from USAspending.gov, an official online government financial database.

HHS and DOJ are part of the federal National Rapid Response Strike Force in Washington, D.C., which led efforts to combat health care fraud arising from the pandemic. The report has examples of pandemic fraud investigations including the 2021 COVID-19 Health Care Fraud Enforcement Action that resulted in charges against 14 defendants in seven federal districts across the United States. Exploiting the pandemic, the schemes resulted in more than $143 million in false billings, the report said

Program cost

HCFAC is not cheap – the program’s budget totaled more than $1.12 billion in fiscal year 2021. But the agencies said the return on investment (ROI) was $4 returned for every $1 spent in the last three years. HHS and DOJ use a three-year rolling average to calculate ROI because the annual amount varies year to year.

The departments said the return on investment does not capture the full effect of HCFAC.

“Civil and criminal enforcement that stops ongoing fraud saves the program from future losses,” the report said. “Even actions that do not result in recoveries, for example, a search warrant, an indictment, or an arrest, may prevent the defendant from continuing to defraud federal health care programs. Therefore, this ROI calculation relies on actual recoveries and collections, and does not represent the effect of preventing future fraudulent payments. Further, the threat of oversight alone can have a sentinel impact that deters future bad actors from defrauding Medicaid, Medicare, and other federal health care benefit programs.”