During fiscal year (FY) 2016, HHS Office of Inspector General (OIG) investigations resulted in over 690 civil actions, which include false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties (CMP) settlements, and administrative recoveries related to provider self-disclosure matters. In a joint report highlighting accomplishments of the Health Care Fraud and Abuse Control (HCFAC) program in FY 2016, the Departments of Health and Human Services (HHS) and Justice also noted that the investigations led to over 765 criminal actions against individuals or entities engaged in crimes related to Medicare and Medicaid. Overall, $3.3 billion was returned to the federal government, with $1.7B going to the Medicare Trust Funds (Health Care Fraud and Abuse Control Program Annual Report for FY 2016, January 19, 2017).
Background. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) (P.L. 104-191) established the national HCFAC program under the joint direction of the Attorney General and HHS, acting through the Inspector General. HCFAC is designed to coordinate federal, state and local law enforcement activities with respect to health care fraud and abuse. Money is appropriated from the Medicare Hospital Insurance Trust Fund to an expenditures account to finance anti-fraud activities. The funds are "available until expended" and the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) extended permanently the yearly increases to the expenditures account based upon consumer price index changes.
CMS, under the ACA, is authorized to suspend Medicare payments to providers during an investigation of a credible allegation of fraud. CMS also has authority to suspend Medicare payment, if reliable information of an overpayment exists.
Enforcement actions. In FY 2016, the Department of Justice (DOJ) opened 975 new criminal health care fraud investigations. Federal prosecutors filed criminal charges in 480 cases involving 802 defendants. A total of 658 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2016, DOJ opened 930 new civil health care fraud investigations and had 1,422 civil health care fraud matters pending at the end of the fiscal year. In FY 2016, the FBI investigative efforts resulted in over 555 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 128 health care fraud criminal enterprises.
For instance, Regent Management Services L.P., a Galveston, Texas skilled nursing facility company, paid $2.7 million to settle civil False Claims Act (FCA) allegations that it received kickbacks from various ambulance companies in exchange for rights to Regent’s more lucrative Medicare and Medicaid transport referrals (see Medical institutions now accountable for ambulance swapping kickback deals, December 1, 2015). The alleged remuneration included patients at facilities receiving free or heavily discounted ambulance transports that Regent would otherwise have been financially responsible for at higher Medicaid rates. According to the HCFAC report, the settlement was the first in the nation to hold accountable the medical institution as opposed to the ambulance in a "swapping" arrangement. As a part of settlement, Regent also entered into a five-year corporate integrity agreement with the OIG.
In another example, Genentech, Inc. and OSI Pharmaceuticals, LLC paid $62.6 million to resolve civil FCA allegations that they caused the submission of false claims to the federal health care programs when making misleading statements to market and sell the drug Tarceva (see Drug companies pay $67M for Tarceva® misrepresentation, false claims allegations, June 7, 2016). The FDA approved Tarceva to treat certain patients with non-small cell lung cancer or pancreatic cancer. However, studies revealed that Tarceva was not generally effective for the treatment of non-small cell lung cancer for certain patients. Only those patients who had either never smoked or whose cancer contained a certain protein mutation were likely to respond. Despite these findings, the companies promoted Tarceva for use in patients in which the drug was not likely to be effective.
The report also noted other criminal and civil investigations in a wide range of areas, including clinics, device companies, physicians, health maintenance organizations, home health providers, and hospitals and health systems, among other entities.
Monetary impact. As a result of investigations and actions, the federal government won or negotiated over $2.5 billion in health care fraud judgments and settlements. In FY 2016 over $3.3 billion was returned to the federal government or paid to individuals. Of this amount, the Medicare Trust Funds received transfers of approximately $1.7 billion during this period, and an additional $235.2 million in Medicaid money was transferred separately to the Treasury. The return on investment for the HCFAC program from 2014 to 2016 was $5 returned for every $1 expended.
Sequestration. The report noted some challenges in FY 2016 were a consequence of sequestration of $20.6 million in HCFAC funding, which impacted the program’s ability to combat fraud and abuses against Medicare, Medicaid, and other health care programs.
MainStory: TopStory OIGReports CMSNews CMPNews FCANews FraudNews HIPAANews MedicaidPaymentNews PaymentNews ProgramIntegrityNews
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