Dive Brief:

  • The federal government won or negotiated more than $2.4 billion in healthcare fraud judgments and settlements in FY2017, according to the HHS/Department of Justice’s new Health Care Fraud and Abuse Control Program’s (HCFAC) annual report.
  • In total, $2.6 billion was returned to the federal government, including $1.4 billion given to Medicare Trust Funds and $406.7 million in federal Medicaid money in fiscal 2017.
  • The DOJ opened 967 criminal healthcare fraud investigations over the year and filed 439 cases that involved 720 defendants. The result was 639 defendants convicted in healthcare-related cases.

Dive Insight:

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established the HCFAC. The program is a collaborative effort between the attorney general and the HHS secretary, who acts through the inspector general.

​National healthcare fraud has been on the upswing over the past few years. There were more than 400 defendants charged in fiscal 2017, which was an increase over 2016 (300) and 2015 (about 250).

One of the most high-profile investigation units, the Medicare Fraud Strike Force, probed cases involving multiple areas of healthcare. That included ambulance and transportation services, clinics, device companies, diagnostic services, drug companies, durable medical equipment, EHRs, health maintenance organizations and hospitals/health systems.

The hospital/health system cases included:

  • South Miami Hospital entered into a settlement agreement and paid $12 million to resolve a case.
  • TeamHealth Holdings agreed to pay $57.5 million to settle a suit.
  • Mercy Hospital Springfield agreed to pay $34 million to resolve allegations.
  • Pacific Alliance Medical Center agreed to pay $31.9 million to settle allegations.

The report said the healthcare investigations and recoveries came despite fewer resources for the DOJ, FBI, HHS and HHS Office of Inspector General. In fact, $20.7 million was sequestered from the HCFAC during the fiscal year. The program has lost $155.5 million in the past five years because of the congressional sequestration of mandatory funding.

Other data reported in fiscal 2017 include:

  • The FBI’s work led to more than 674 “operational disruptions” of criminal fraud organizations.
  • The FBI dismantled more than 148 healthcare fraud criminal enterprises.
  • HHS OIG work led to 788 criminal actions against individuals and entities engaged in crimes connected to Medicare and Medicaid.
  • The inspector general also issued 818 civil actions, such as false claims, unjust-enrichment lawsuits filed in federal district court and civil monetary penalty settlements.
  • HHS-OIG excluded 3,244 people and entities from participating in Medicare, Medicaid and other healthcare programs. Those issues involved crimes related to a health program and patient abuse or neglect.