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Fraud efforts recover $4.2 billion in FY2012, according to federal government


The government’s healthcare fraud prevention and enforcement efforts led to charges or convictions of providers and others and also removed almost 150,000 providers from Medicare's billing system, according to a new report from the federal government.

The government’s healthcare fraud prevention and enforcement efforts recovered a record $4.2 billion in taxpayer dollars in fiscal year (FY) 2012, up from nearly $4.1 billion in FY 2011, from individuals and companies who attempted to defraud federal health programs serving seniors and taxpayers or who sought payments to which they were not entitled, according to a new report from the U.S. Department of Justice and the U.S. Department of Health and Human Services.

Over the past 4 years, the administration’s enforcement efforts have recovered $14.9 billion, up from $6.7 billion over the prior 4-year period. Since 1997, the HCFAC Program has returned more than $23 billion to the Medicare trust funds, according to the agencies.

The DOJ and HHS credited their success to the Health Care Fraud Prevention and Enforcement Action Team (HEAT), created in 2009 to prevent fraud, waste, and abuse in the Medicare and Medicaid programs and to crack down on individuals and entities that are abusing the system and costing American taxpayers billions of dollars.

Since 2009, the DOJ and HHS have increased the number of Medicare Fraud Strike Force teams to nine. The strike force teams use advanced data analysis techniques to identify high-billing levels in healthcare fraud hot spots so that interagency teams can target emerging or migrating schemes as well as with chronic fraud by criminals masquerading as healthcare providers or suppliers.

Strike force operations in the nine cities where teams are based resulted in 117 indictments, informations, and complaints involving charges against 278 defendants who allegedly billed Medicare more than $1.5 billion in fraudulent schemes. In FY 2012, 251 guilty pleas and 13 jury trials were litigated, with guilty verdicts against 29 defendants, in strike force cases. The average prison sentence in these cases was more than 48 months.

The strike force coordinated a takedown in May that involved the highest number of false Medicare billings in the history of the strike force program. The effort involved 107 individuals, including doctors and nurses, in seven cities, who were charged for their alleged participation in Medicare fraud schemes, involving about $452 million in false billings. As a part of the takedown, HHS also suspended or took other administrative action against 52 providers using authority under the healthcare law to suspend payments until an investigation is complete.

This past summer, Attorney General Holder and Secretary Sebelius announced the launch of a partnership among the federal government, state officials, several private health insurance organizations, and other healthcare anti-fraud groups to share information and best practices to improve detection of and prevent payments to scams that cut across public and private payers.

In FY 2012, the DOJ opened 1,131 new criminal healthcare fraud investigations involving 2,148 potential defendants, and a total of 826 defendants were convicted of healthcare fraud-related crimes during the year. The department also opened 885 new civil investigations.

The administration is fighting fraud using tools authorized by the Affordable Care Act (ACA), including enhanced screenings and enrollment requirements, increased data sharing across the government, expanded recovery efforts for overpayments, and greater oversight of private insurance abuses. The new authorities under the ACA granted to HHS and the Centers for Medicare and Medicaid Services (CMS) were instrumental in clamping down on fraudulent activity in healthcarem, according to the DOJ and HHS.

From May 2011 through the end of 2012, more than 400,000 providers were subject to the new screening requirements and nearly 150,000 lost the ability to bill the Medicare program due to ACA requirements and other proactive initiatives.

In FY 2012, CMS began the process of screening all 1.5 million Medicare-enrolled providers through the new automated provider screening system that quickly identifies ineligible and potentially fraudulent providers and suppliers before enrollment or revalidation to verify the data. As a result, nearly 150,000 ineligible providers already have been eliminated from Medicare’s billing system.

CMS also established a command center to improve healthcare-related fraud detection and investigation, drive innovation, and help reduce fraud and improper payments in Medicare and Medicaid. 

The HCFAC annual report is available at

For more information on the joint DOJ-HHS strike force activities, visit For more information on the fraud prevention accomplishments under the ACA, visit

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