Federal Health Care Fraud & Abuse Recovery of $4.2 Billion In FY 2012 Shows Enforcement Risks Growing

A new report from the Department of Health & Human Services (HHS) and the U.S. Department of Justice (DOJ) joint Health Care Fraud and Abuse Control Program (HCFC) documents the growing exposures of health care providers to federal health care fraud enforcement actions. 

The charges are provide yet another powerful reminder to health care providers, leaders and organizations of the advisability of tightening compliance practices and taking other steps to guard against ever-expanding health care fraud exposures.  Already a lead federal enforcement priority for more than a decade, the Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2012 (FY2012 Report) documents that DOJ and HHS health care fraud enforcement activities scored big in 2012, and that qui tam whistleblowers played a big part and shared big in the profits.

Among other things, the FY2012 Report credits HCFC with producing $4.2 Billion in health care fraud judgments and settlements in Fiscal Year 2012  of which more than $284 million of the recovered monies were paid to relators under the qui tam provisions of the False Claims Act (FCA).

The FY2012 Report says the Medicare Trust Fund received more than $2.4 billion, including civil recoveries of $935 million, $1.4 billion in criminal fines, and $89.7 million in HHS Medicare program audit disallowances.

On the enforcement front, the FY2012 Report says DOJ opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants. Federal prosecutors had 2,032 health care fraud criminal investigations pending, involving 3,410 potential defendants, and filed criminal charges in 452 cases involving 892 defendants. A total of 826 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2012, DOJ opened 885 new civil health care fraud investigations and had 1,023 civil health care fraud matters pending at the end of the fiscal year. In FY 2012, Federal Bureau of Investigation (FBI) health care fraud investigations resulted in the operational disruption of 329 criminal fraud organizations, and the dismantlement of the criminal hierarchy of more than 83 criminal enterprises engaged in health care fraud.

Meanwhile, HHS’ Office of Inspector General (HHS/OIG) excluded 3,131 individuals and entities in FY 2012. Among these were exclusions based on criminal convictions for crimes related to Medicare and Medicaid (912) or to other health care programs (287); for patient abuse or neglect (212); and as a result of licensure revocations (1,463). In addition, HHS/OIG imposed civil monetary penalties against, among others, providers and suppliers who knowingly submitted false claims to the Federal government. HHS/OIG also issued many audits and evaluations with recommendations that, when implemented, would correct program vulnerabilities and save program funds.

Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and organizations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to position their organization to respond and defend against potential investigations or charges.  Along with a broad health care fraud enforcement and compliance programs, these efforts should include targeted efforts to prevent and manage fraud and other whistleblower claims by employees, business partners and others.

For More Information Or Assistance

If you need assistance reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 23 years experience advising health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers and other health industry clients to establish and administer compliance and risk management policies and to respond to DEA and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns including a number of programs and publications on OCR Civil Rights rules and enforcement actions. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need assistance with these or other compliance concerns, wish to ask about arranging for compliance audit or training, or need legal representation on other matters please contact Ms. Stamer at (469) 767-8872 or via e-mail here

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information about this communication click here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here. For important information concerning this communication click here. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.   ©2013 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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