Federal investigators catch perpetrators of alleged $375 million health care fraud

By Danny Werfel, Controller
Federal Office of Management and Budget, and from
other Federal sources

On Tuesday, thanks to the Affordable Care Act, the United States Department of Health and Human Services (HHS) has suspended payments worth an estimated $2.3 million per month to 78 Texas home health agencies suspected to be involved in an alleged fraud ring. That’s more than $27 million in hard-earned taxpayer dollars that could be saved over the next year.

The suspension of payments was part of the announcement that:

“A physician and the office manager of his medical practice, along with five owners of home health agencies, were arrested today on charges related to their alleged participation in a nearly $375 million health care fraud scheme involving fraudulent claims for home health services.

“[Tuesday’s] enforcement actions are the result of the Medicare Fraud Strike Force operations, which are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT).   HEAT is a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.”

This suspension of payments is part of efforts that recovered $4.1 billion in taxpayer dollars last year, the second year recoveries hit this record breaking level. Total recoveries over the last three years were $10.7 billion. Prosecutions are way up, too: the number of individuals charged with fraud increased from 821 in fiscal year 2008 to 1,430 in fiscal year 2011 – nearly a 75 percent increase.

In addition to cracking down on fraud, we are also taking aggressive steps to cut payment errors in Medicare and Medicaid. We dramatically reduced the government-wide rate of improper payments in fiscal year 2011, including significant reductions in every Medicare and Medicaid program. All told, we have avoided over $20 billion in improper payments over the past two years, as part of our efforts to reduce waste and error across government through the Obama Administration’s Campaign to Cut Waste. (For more information on that executive order, visit www.whitehouse.gov/goodgovernment/actions/campaign-cut-waste.)

The Affordable Care Act takes historic steps toward combating health care fraud, waste and abuse by providing critical new tools to crack down on entities and individuals attempting to defraud Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and private insurance plans.

The Centers for Medicare & Medicaid Services (CMS) is using state-of-the-art technology review claims before they are paid to track fraud trends and flag suspect activity. New power to fight fraud, granted in the health reform law, will also help achieve the 2012 goal of cutting the rate of improper payment claims in the traditional Medicare program by half.
For more information on the  battle against fraud, go to www.healthcare.gov/news/factsheets/2012/02/medicare-fraud02142012a.html.