In the first eight months of fiscal year 2011, the U.S. Department of Justice (DOJ) has prosecuted 903 cases of healthcare fraud, according to a recent report by the Transactional Records Access Clearinghouse. Assuming the government prosecutions continue at such pace, the report projects a total of 1,400 healthcare prosecutions for fiscal year 2011, an 85 percent increase over fiscal year 2010. Such a dramatic increase in prosecutions can be at least partially attributed to the work of the joint DOJ-Health and Human Services Medicare Fraud Strike Force (Strike Force). The Strike Force is a team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have been accused of falsely billing the Medicare program for more than $2.9 billion.

A recent nationwide coordinated takedown by Strike Force operations in eight cities resulted in charges against 91 defendants, including doctors, nurses and other medical professionals for their alleged participation in Medicare fraud schemes involving approximately $295 million in false billing. Additionally, Strike Force agents executed 18 search warrants in connection with ongoing Strike Force investigations. The DOJ advises this coordinated takedown involves the highest amount of false Medicare billings in a single takedown in Strike Force history. The charges alleged are based on a variety of purported fraud schemes involving various medical treatments and services such as home healthcare, physical and occupational therapy, mental health services, psychotherapy and durable medical equipment (DME). The DOJ warns that, in many cases, the indictments and complaints allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent bills to Medicare for services that were medically unnecessary or never provided. A Houston area defendant is alleged to have sold beneficiary information to 100 different Houston area home healthcare agencies in exchange for illegal payments. This defendant and one other Houston area individual are alleged to have perpetrated fraudulent schemes involving $62 million in false billings for home healthcare and DME.

Attorney General Eric Holder cautions such increased enforcement efforts will be continuing, "Our highly coordinated, nationwide Strike Force operations are working aggressively to combat Medicare fraud and our anti-healthcare fraud efforts have never been more innovative, collaborative, aggressive -- or effective." In the face of such "innovative and aggressive" enforcement activities, providers should review their existing compliance plans and ensure such plans adhere to current guidelines. We have helped numerous clients evaluate and implement compliance plans and activities. Such compliance efforts can prove to be an important step in mitigating compliance risk, as well as protecting the company from potential liability.