As reflected in the headlines and statistics, the Federal Government has made the fight against health care fraud an enforcement priority that has reaped extraordinary rewards. During 2010 Daniel Levinson, Inspector General for the Department of Health and Human Services, and Lewis Morris, Chief Counsel for the Department of Health and Human Services testified before Congressional committees about the OIG's intent to employ sophisticated data analysis technology to detect potential fraud and abuse by analyzing nationwide claims data to identify suspect patterns. And, in 2011, Inspector General Levinson reported that the OIG is using information technologies and analytics, including data mining, trend evaluation, and modeling, to better identify fraud vulnerabilities and target oversight efforts.
And, have they ever.
Celebrating its fifteenth year of operation, the Department of Health and Human Services and the Department of Justice's Health Care Fraud and Abuse Report for Fiscal Year 2011 reports that the Federal Government won or negotiated approximately $2.4 billion in health care fraud judgments and settlements and imposed additional administrative sanctions like civil monetary penalties for 2011. These agencies also report that, during FY 2011, $4.1 billion was deposited with the Department of Treasury and the Centers for Medicare and Medicaid Services ("CMS"), transferred to other federal agencies or to private persons (whistleblower plaintiffs) as a result of these agencies' success in addressing health care fraud and abuse. Of this $4.1 billion, approximately $2.5 billion was paid to the Medicare Trust Funds and $599.9 million in Federal Medicaid money was transferred to the Treasury. Since its inception in 1997, the Health Care Fraud and Abuse Control Program has returned over $20.6 billion to the Medicare Trust funds.
The Health Care Fraud and Abuse Control Program's extraordinary monetary success.
In 1996, HIPAA, in addition to creating the first federal privacy law, also established a national Health Care Fraud and Abuse Control Program ("Program"). This program, now fifteen years old, operated under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services ("HHS"), acting through the Inspector General coordinates Federal, state, and local law enforcement activities with respect to civil and criminal health care fraud and abuse. HIPAA also established a self-funding mechanism from recoveries that allowed the Secretary and the Attorney General to allocate monies to fund investigations and prosecute health care fraud. The Affordable Care Act permanently extended increases for the funds allocated to prosecution. And, as the DOJ and HHS point out, they have been extraordinarily successful.
Pointing to the success of the Program, federal officials have calculated its return-on-investment and have reported it to be $5.10 returned for every $1 expended on investigation and prosecution since 1997. The most recent 3-year average for 2009 - 2011 reflects a return on investment of $7.20 to $1, which is $2.10 higher than the historical average. The returns on investment are calculated on three year cycles to account for variation in the number of cases that are filed and settled.
Where does all this money come from?
While the $4.1 billion transferred represents the spoils of several years of operation, the $2.4 billion is reflective of the monies collected during 2011. These monies include notably high settlements with hospitals, medical practices, home health agencies and hospices to name a few. In FY 2011, the DOJ opened 1,110 new criminal health care fraud investigations involving 2,561 potential defendants. Federal prosecutors had 1,873 health care criminal investigations pending, involving 3,118 potential defendants, and filed criminal charges in 489 cases involving 1,430 defendants in FY 2011. A total of 743 defendants were convicted of health care fraud-related crimes during the year. Also, in FY 2011, the DOJ opened 977 new civil health care fraud investigations and had 1,069 civil health care fraud matters pending at the end of the FY 2011. According to the Federal Government, the FBI health care fraud investigations resulted in the operational disruption of 238 criminal fraud organizations and the dismantlement of 67 criminal enterprises in 2011. In FY 2011, the HHS Office of Inspector General excluded 2,662 individuals and entities from participation in federal health care programs. Among these were exclusions for criminal conduct (1,015) or to other health care programs (233) for patient abuse or neglect (206) or as a result of licensure revocations (897). Not reported were the amounts assessed as civil monetary penalties against providers who filed false claims to federal health care programs. For FY 2011, the number of healthcare prosecutions was projected to increase by 85.4% over FY 2010 and 156% over five years ago.
What does this mean?
With 32 fraud-fighting provisions in the Affordable Care Act, the expansion of the HEAT program, and the on-going issuance of new regulations and items like the Stark Self Disclosure Protocol as well as a host of new contractors, the federal government has made the fight against healthcare fraud a priority. A federal inspector general's office with over 1700 employees committed to fighting health care fraud and abuse in addition to the employees of other agencies. Physicians and other providers should expect that their billing practices will be scrutinized through new tools such as data mining by a myriad of different federal officials and contractors. Buoyed by strong financial success, the federal government has every reason to step up its enforcement activities as it has said that it will.
What should providers do?
Physicians and other health care providers should implement strong compliance and education programs to assure that billings are supported by medical necessity and strong documentation. Moreover, all compliance efforts should be documented. Keeping abreast of billing guidance, the OIG's Work Plan and notable prosecutions should inform providers of areas of interest. In addition, the OIG now has a host of training materials posted on their website that can be reviewed and used for employee training.
In conclusion, the monetary success of the Health Care Fraud and Abuse Control Program assures continued investigation and monitoring of all healthcare providers along with powerful data mining tools.
 The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") 42U.S.C.Section 1395b-5.
 The Department of Health and Human Services and The Department of Justice Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2011 published February 2012.
 Transaction Records Access Clearinghouse, (TRAC) Health Care Fraud Prosecutions for 2011, Aug. 17, 2011.© 2013 by McBrayer, McGinnis, Leslie & Kirkland, PLLC. All rights reserved.