Health and Human Services Issues Its FY 2014 Healthcare Fraud Report

Over the course of the next two posts, we will examine the recent report released by the Department of Health and Human Services detailing its successes in combating healthcare fraud during fiscal year 2014. With regard to False Claims Act settlements, healthcare fraud remains one of the top issues impacting American taxpayers – and total settlements are soaring in the billions of dollars.

In today’s post, we will break down the monetary results of the efforts by both HHS and the Department of Justice (DOJ), which will reveal the total amount of money recouped on behalf of taxpayers from fraudulent doctors, healthcare management companies, hospitals, those in the pharmaceutical industry, and others. We will also look at the various accomplishments by HHS over the course of the past year. In tomorrow’s post, we will review the Department of Justice’s concerted role in detecting, punishing, and deterring healthcare fraud.

Monetary results of healthcare fraud prosecution in fiscal year 2014

In 2014, HHS and DOJ reportedly recovered $3.3 billion in healthcare fraud penalties, judgments, and settlements. Out of this amount, $1.9 billion was returned to the Medicare trust fund, which is then used to provide much-needed healthcare coverage to eligible senior Americans. Another $1.01 billion was allocated as restitution and/or compensatory damages payable to federal agencies, including TRICARE, the Department of Veterans Affairs, HHS (to cover costs of audits and investigations), the Office of Personnel Management, and the Centers for Medicare and Medicaid Services. Lastly, the courageous whistleblowers responsible for exposing this dangerous and wasteful practice received a grand total of $369,178,487.

Most impressively, over the past two years, the government has reclaimed $7.07 in settlements for every $1.00 spent prosecuting the actions.

Summary of accomplishments

Judging by the amount of money recovered in just one year, the accomplishments by HHS and the DOJ are quite extensive. The report summarized its accomplishments by highlighting a series of high-dollar settlements and prosecutions. The Medicare Fraud Task Force, which is a group of investigators and law enforcement personnel tasked with uncovering fraud within the Medicare system, highlighted several key geographical areas in the U.S. with a seemingly high risk of fraudulent activity. Namely, in 2014, the task force focused primarily on Miami, FL; Los Angeles, CA; Detroit, MI; Houston, TX; Brooklyn, NY; Southern Louisiana; Tampa, FL; Chicago, IL; and Dallas, TX. As a result, the following accomplishments were noted:

• 165 criminal indictments against 385 defendants – allegedly responsible for overbilling Medicare by $830 million;
• 304 guilty pleas, 38 jury trials – with guilty verdicts rendered against 41 defendants;
• Incarceration of 248 defendants, serving an average sentence of 50 months.

The report thereafter continues by showcasing some of the more notorious fraud cases settled or concluded during the year – most of which we have covered extensively. The report lists the major categories of healthcare fraud, including fraud by medical device companies, pharmacies, doctors, hospitals, chiropractors, dentists, ambulance service providers, hospice centers, skilled nursing facilities, and counselors.

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