HCFAC 2018 Annual Report Highlights Thousands of Provider Exclusions and $2.3 Billion in Recoveries

It is the twenty-second year of the Health Care Fraud and Abuse Control Program (HCFAC) established by the Health Insurance Portability and Accountability Act of 1996. The HCFAC’s annual report for 2018 shows continued focus on preventing and eliminating fraud, waste and abuse from the Medicare and Medicaid programs and increased cooperation between government agencies to facilitate data sharing.

HCFAC Program Overview

HCFAC is a program 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). It is designed to coordinate federal, state and local law enforcement activities with respect to health care fraud and abuse. According to the annual report, in 2018 the government won or negotiated over $2.3 billion in health care fraud judgments and settlements, in addition to other health care administrative determinations.

In 2018, the Department of Justice (DOJ) opened 1,139 new criminal health care fraud investigations, 918 new civil health care fraud investigations and had 1,203 civil health care fraud matters pending at the end of the fiscal year. Similarly, the Office of Inspector General (OIG) investigations resulted in 679 criminal actions against individuals or entities that engaged in crimes related to Medicare and Medicaid, and 795 civil actions, which included 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.

The OIG also excluded 2,712 individuals and entities from participation in Medicare, Medicaid, and other Federal health care programs.

The annual report reveals that the government’s return on investment for the HCFAC program for the years 2016-2018 is $4.00 returned for every $1.00 expended.

Medicare Strike-Force

One of the successful initiatives under HCFAC is the Medicare Strike Force which brings together investigators and prosecutors from different agencies to focus on Medicare and Medicaid fraud in regions with the highest known concentration of fraudulent activities. Since 2007, when the initiative began in South Florida, the Medicare Strike Force has expanded to 24 U.S. districts including Miami, Orlando, and Tampa, Florida; Los Angeles, California; Detroit, Michigan; Houston and Dallas, Texas; Brooklyn, New York; Baton Rouge and New Orleans, Louisiana; Chicago, Illinois; Newark, New Jersey; and Philadelphia, Pennsylvania, along with a Corporate Strike Force located in Washington, D.C.

The Medicare Strike Force made news in 2018 for its National Health Care Fraud Takedown combating healthcare fraud and the opioid epidemic. This takedown involved more than 600 charged defendants across 58 federal districts and the government’s estimated loss to federal health care programs from the alleged activities was approximately $2 billion. The 2018 takedown included 165 doctors, nurses, and other licensed medical professionals.

HCFAC Recoveries and Settlements

Recoveries and settlements from HCFAC activities spanned a broad range of healthcare activities, providers and suppliers. They included:

  • transportation companies (e.g., recoveries for transportation that did not occur; altering paperwork to justify billing)
  • a diagnostic imaging entity (e.g., performing tests without appropriate supervision)
  • dental management company (for medically unnecessary dental services performed on children insured by Medicaid)
  • DMEs (kickbacks for cold calls to patients related to talking glucose meters; waiving or reducing co-insurance, co-payments, and deductibles for beneficiaries who participated in a Medicare Advantage Plan operated through a private insurer)
  • home health agencies (e.g., paying patient recruiters/doctors in exchange for patients); identity theft (using identities of physicians to bill Medicare)
  • pharmacies (e.g., failing to collect co-payments; medically unnecessary pain and scar creams, etc.)
  • physical therapy (e.g., paying kickbacks to patients and patient recruiters for medically unnecessary PT); physicians (fraudulent billing; false claims; receipt of kickbacks for referrals);
  • psychiatrists and psychological testing (e.g,. false claims; billing for services not provided).

Similarly, the OIG was involved, among other activities, in excluding providers and suppliers, conducting audits, imposing civil monetary penalties, resolving self-disclosures, and issuing advisory opinions.

If you have questions about the HCFAC annual report, Medicare or Medicaid audits, exclusions, revocations, enrollments, revalidations or have other health care law questions, please contact our office.