The Departments of Justice and Health and Human Services released a report last week showing that the government has achieved the highest return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program.  According to the report, for every dollar spent on healthcare-related fraud and abuse investigations in the last three years, the government recovered $7.90.

The government recovered $4.2 billion from healthcare fraud enforcement efforts in FY 2012, up from $4.1 billion in FY 2011.  The government continues to focus on reducing fraud and waste in the healthcare system.

“This was a record-breaking year for the Departments of Justice and Health and Human Services in our collaborative effort to crack down on health care fraud and protect valuable taxpayer dollars,” said Attorney General Holder. “In the past fiscal year, our relentless pursuit of health care fraud resulted in the disruption of an array of sophisticated fraud schemes and the recovery of more taxpayer dollars than ever before. This report demonstrates our serious commitment to prosecuting health care fraud and safeguarding our world-class health care programs from abuse.”

The government also touted the use of fraud-fighting tools authorized by the Affordable Care Act including enhanced screenings and enrollment requirements, increased data sharing across the government, expanded recovery efforts for overpayments and greater oversight of private insurance abuses.  Screening of all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system began in FY 2012.  The report states that nearly 150,000 ineligible providers have already been eliminated from Medicare’s billing system. 

In May 2012, the strike force conducted an operation that involved the highest number of false Medicare billings in the history of the strike force program.  The operation involved $452 million in false billings and 107 individuals across seven cities who were charged with participation in Medicare fraud schemes.  Some of the 107 individuals were doctors and nurses.

Our Insight.  Your Advantage.  This report shows that the government’s efforts are paying off.  Healthcare providers should consider adding resources to compliance efforts just as the government continues to add resources to enforcement efforts.  Fraud investigations are costly and providers should view each dollar spent on compliance as an investment in saving money that might otherwise be spent on an investigation, settlement, or corporate integrity agreement.

Keep in mind that the $4.2 billion does not even tell the entire story.  That figure does not include recoveries that resulted from audits conducted by the government, which totaled $923.8 million.  Audits can also lead to investigations.  If an auditor believes that an overpayment resulted from “fraud” as it is broadly defined in the relevant laws, the auditor must report it to the appropriate law enforcement entities.

As we have reported previously, the government’s civil and criminal enforcement efforts are not subsiding and its audit activities are also on the rise.  Providers must not lose sight of this fact, but instead make strategic investments of their resources to prevent their own dollars from being included in future reports of government recoveries.

To read the government’s press release, click here.

To read the full report, click here.