The Health Care Fraud and Abuse Control Program Protects Consumers and Taxpayers by Combating Health Care Fraud
Since inception in 1997, the Health Care Fraud and Abuse Control (HCFAC) Program has been at the forefront of the fight against health care fraud, waste, and abuse. 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 able to expand their capacity to fight fraud and abuse by 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) 2016, the government recovered over $3.3 billion as a result of health care fraud judgements, settlements and additional administrative impositions in health care fraud cases and proceedings. Since its inception, the HCFAC Program has returned more than $31 billion to the Medicare Trust Funds. In this past fiscal year, the HCFAC program has returned $5.0 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 team 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 3,018 individuals involved in more than $10.8 billion in fraud. Many of these charges have resulted from coordinated, multi-district national takedowns. In June 2016, the Medicare Fraud Strike Force conducted a nationwide health care fraud takedown, which resulted in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. In addition, CMS is suspending payment to a number of providers using its suspension authority. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and loss amount.
Another powerful tool in the effort to combat health care fraud is the federal False Claims Act. In 2016, DOJ obtained over $2.5 billion in settlements and judgments from civil cases involving fraud and false claims against federal health care programs such as Medicare and Medicaid.
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.
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. Since 2011, CMS’s enhanced provider screening and enrollment initiatives in Medicare have had a significant impact on removing ineligible providers from the program. Site visits, revalidation and other initiatives have contributed to the deactivation and revocation of more than 652,000 enrollment records.
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.
- In FY 2016, the HFPP reached a membership level of 70 partner organizations, representing over 65 percent of covered lives within the United States, and an increase of 30 percent since FY 2015. The amount of data collected in support of studies has increased by 300 percent in FY 2016, leading to the performance of new studies, the replication of prior studies with new data, and the attainment of actionable leads.
CMS Fraud Prevention Efforts
CMS is working to ensure that public funds are not diverted from their intended purpose: to make accurate payments to legitimate entities for allowable services or activities on behalf of eligible beneficiaries of federal health care programs. CMS also performs many program integrity activities that are beyond the scope of this report because they are not funded directly by the HCFAC Account or discretionary HCFAC funding. Medicare Fee-for-Service and Medicaid improper payment rate measurement and activities, the Fraud Prevention System, Recovery Audit Program activities, and prior authorization initiatives are discussed in separate reports, and CMS will submit a combined Medicare and Medicaid Integrity Program report to Congress later this year. Some of CMS’ fraud prevention efforts include:
- During FY 2016, CMS continued to integrate Medicare and Medicaid efforts, and provide technical guidance to states, providers, and other stakeholders on program integrity activities. CMS continued to conduct Medicare and Medicaid fraud investigations and provider audits, as well as state program integrity reviews.
- In FY 2016, CMS continued its use of the Affordable Care Act authority to suspend Medicare payments to providers during an investigation of a credible allegation of fraud. CMS also has authority to suspend Medicare payment if reliable information of an overpayment exists. During FY 2016, there were 508 payment suspensions that were active at some point during the fiscal year (data reflected as of October 31, 2016). Of the 508 payment suspensions, 291 new payment suspensions were imposed during FY 2016.
- Under the Medicaid/CHIP Financial Management project, funding specialists, including accountants and financial analysts, worked to improve CMS’ financial oversight of the Medicaid Program and CHIP. In FY 2016, CMS removed an estimated $608 million (with approximately $230 million recovered and $378 million resolved) of approximately $8.0 billion identified in questionable Medicaid costs. Furthermore, an estimated $666 million in questionable reimbursement was actually averted due to the funding specialists’ preventive work with states to promote proper state Medicaid financing.
- Open Payments is a national program that promotes transparency by publishing data on the financial relationships between the health care industry (applicable manufacturers and group purchasing organizations, or GPOs) and health care providers (physicians and teaching hospitals). In Fiscal Year 2016, CMS published $7.5 billion in payments and ownership and investment interests that were made from applicable manufactures and GPOs to physicians and teaching hospitals. This amount is comprised of 11.9 million total records attributable to 618,931 physicians and 1,116 teaching hospitals.