The Health Care Fraud and Abuse Control Program Protects Consumers and Taxpayers by Combating Health Care Fraud
The Affordable Care Act has helped the Government Fight Fraud, Strengthen Health Insurance Programs, Protect Consumers, and Save Taxpayer Dollars
The Obama Administration is committed to reducing fraud, waste, and abuse across the government. Since 2010, the U.S. Department of Health & Human Services, Office of Inspector General (HHS OIG), the Centers for Medicare & Medicaid Services (CMS), and the U.S. Department of Justice (DOJ) have been using powerful, new anti-fraud tools to protect Medicare and Medicaid by shifting from a “pay and chase” approach toward fraud prevention. Through the groundbreaking Healthcare Fraud Prevention Partnership, stronger relationships have been built between the government and the private sector to help protect all consumers.
These focused efforts are successful. In Fiscal Year (FY) 2015, the government recovered $2.4 billion as a result of health care fraud judgments, settlements and additional administrative impositions in health care fraud cases and proceedings. Since its inception in 1997, the Health Care Fraud and Abuse Control (HCFAC) Program has returned more than $29.4 billion to the Medicare Trust Funds. In this past fiscal year, the HCFAC program has returned $6.10 for each dollar invested.
The Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative between HHS, OIG, and DOJ, has played a critical role in the fight against health care fraud.
A key component of HEAT is the Medicare Fraud Strike Force – an interagency task force teams comprised of OIG and DOJ analysts, investigators, and prosecutors who target emerging or migrating fraud schemes, including fraud by criminals masquerading as health care providers or suppliers.
Since 2007, the Medicare Fraud Strike Force has charged over 2,536 individuals involved in more than $8 billion in fraud. Many of these charges have resulted from coordinated, multi-district national takedowns. In June 2015, the Medicare Fraud Strike Force conducted its largest ever nationwide health care fraud takedown, which, for the first time, involved non-Strike Force participants and resulted in charges against a record 243 individuals for approximately $712 million in false Medicare and Medicaid billing. Since its inception, the Medicare Fraud Strike Force has maintained a conviction rate of approximately 95 percent and an average term of incarceration of more than four years.
Another powerful tool in the effort to combat health care fraud is the federal False Claims Act. In 2015, DOJ obtained over $1.9 billion in settlements and judgments from civil cases involving fraud and false claims against federal health care programs such as Medicare and Medicaid. Since January 2009, DOJ has recovered more than $17.1 billion for the federal government in cases involving health care fraud. In many of these cases, the department was instrumental in recovering additional billions of dollars for state health care programs.
Other steps the administration has taken to fight fraud include:
State-of-the-Art Fraud Detection Technology: HCFAC funding also supported HHS OIG’s continued enhancement of data analysis capabilities for detecting health care fraud. HHS OIG continues to use data analysis, predictive analytics, trend evaluation, and modeling approaches to better analyze and target oversight of HHS programs. Analysis teams use data to examine Medicare claims for known fraud patterns, identify suspected fraud trends, and calculate ratios of allowed services as compared to national averages; new analytic tools and methods are being developed to perform more innovative and complex data analytics. Combining the expertise of HHS OIG agents, auditors, and evaluators, as well as our HEAT partners, with data analytics and traditional investigative skills has fostered a highly effective model for fighting health care fraud.
Since June 2011, CMS uses the Fraud Prevention System (FPS) on all Medicare fee-for-service claims on a streaming, national basis. Similar to the fraud detection technology used by credit card companies, FPS applies predictive analytics to claims before making payments in order to identify aberrant and suspicious billing patterns. CMS uses leads generated by FPS to trigger actions that can be implemented swiftly. Early results from FPS show significant promise. Since 2011 the FPS identified savings (certified by HHS OIG) associated with these prevention and detection actions were $820 million. This resulted in more than a 10-to-1 return on investment for the first three years of implementation.
Enhanced Provider Screening and Enrollment Requirements: Provider enrollment is the gateway to billing the Medicare program, and CMS implemented new critical safeguards in efforts to better screen providers enrolling in the Medicare program. The Affordable Care Act required CMS to revalidate all existing 1.6 million Medicare suppliers and providers under new risk-based screening requirements. As a result of revalidation and other proactive initiatives, CMS deactivated more than 500,000 enrollments meaning, billing privileges were stopped for these providers but may be restored upon the submission and approval of an updated enrollment application. CMS also revoked more than 34,000 enrollments meaning, these providers were barred from re-entering the Medicare program for one to three years. These enhanced screening and enrollment requirements have led to more than $2.4 billion in estimated Medicare savings since 2010.
In May 2014, CMS issued a final rule that requires prescribers of Part D drugs to enroll in Medicare and undergo screening. In December 2014, CMS issued a final rule that provides additional authority to remove bad actors from the Medicare program, including providers affiliated with outstanding Medicare debts and providers that have a pattern or practice of abusive billing.
Health Care Fraud Prevention Partnership (HFPP): The Obama Administration has joined with private insurers, states, and associations in the HFPP to prevent health care fraud on a national scale. To detect and prevent payment of fraudulent billings, HFPP participants exchange information and best practices across the public and private sectors. Since 2013, the HFPP has conducted eight studies that enabled partners, including DOJ, HHS-OIG, FBI, and CMS, states, private plans, and associations to take substantive actions, such as payment system edits, revocations, and payment suspensions to stop fraudulent payments and improve the government’s collective forces against fraud, waste, and abuse.
Senior Medicare Patrols: The Obama Administration has expanded funding for Senior Medicare Patrols (SMP) – groups of volunteers who educate and empower their peers to identify, prevent, and report health care fraud. In 2014, the SMP projects had a total of 5,249 active volunteers. These volunteers conducted 202,862 one-on-one counseling sessions and 14,692 group education sessions. In total, 452,714 beneficiaries attended these group education sessions. The projects also reported conducting 110,615 media airings (e.g., print, radio, television, or electronic) to provide education about fraud and the services of the project. Additionally, the projects reported conducting 12,417 community outreach education events. Local SMP offices provide assistance when issues are identified, ensuring that mistakes are corrected and suspected fraud is referred to the appropriate authorities. Since the program’s inception 18 years ago, $122 million in total estimated savings to Medicare and Medicaid is attributable to SMP projects.
Posted on: March 15, 2011
Last updated: February 26, 2016
 Note that a portion of the total FPS savings is comprised of payments prevented due to provider revocations. This amount is a subset of the $2.4 billion total prevented payments from revocations reported in section 'Enhanced Provider Screening and Enrollment Requirements' of this report. Therefore, comparison of these two metrics may result in double-counting.