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Litigation: Federal Health Care Fraud Initiative

Under the Obama administration, the United States Department of Justice (DOJ) has sought and received increased funding to fight healthcare fraud, with a particular emphasis on Medicare fraud. In its 2012 budget request, the DOJ requested $283.4 million to fight healthcare fraud, amounting to a 22 percent increase from the funding Congress approved for 2011.

DOJ's focus on health care fraud has been apparent from the early days of the Obama administration. During 2009, the DOJ teamed up with the Health and Human Services Agency (HHS) to launch the Health Care Fraud Prevention and Enforcement Action Teams (HEAT) initiative. As part of this initiative, the existing Medicare Fraud Strike Force (Strike Force), operating in two cities up until 2009, was increased to nine cities. The Strike Force is a multi-agency team of federal, state and local investigators who work together to combat Medicare fraud through the use of advanced data analysis techniques to identify high-billing levels in healthcare fraud hot spots. This helps the interagency teams to identify potential healthcare providers or suppliers for investigation. The Strike Forces are now operating out of Miami, Tampa Bay, Fla., Detroit, Brooklyn, N.Y., Chicago, Baton Rouge, La., Houston, Dallas and Los Angeles.

This increase in resources and funding has produced significant results in terms of arrests, convictions and lengthy sentences. During 2010, federal prosecutors filed criminal charges throughout the country in 488 healthcare fraud cases involving 931 defendants, 284 of whom billed the Medicare program more than $590 million. A total of 726 defendants were convicted for healthcare fraud-related crimes during 2010. During 2010, 146 defendants, charged with health care fraud violations were sentenced with an average sentence of 46 months.

The initiative has been a profitable one. The investigations resulted in a record recovery of $4 billion. A total of approximately $2.86 billion was deposited to the Medicare Trust Fund - an increase of more than $350 million over the prior year's total. This $4 billion includes DOJ recoveries of $2.5 billion in health care fraud judgments and settlements in False Claims Act matters involving health care, an unprecedented recovery for a single year and an increase of more than 50 percent from 2009 when $1.63 billion was recovered in False Claims Act and healthcare matters.

The initiative is clearly continuing. During 2010, federal prosecutors opened more than 2,000 criminal and civil health care fraud investigations-1,100 new criminal healthcare fraud investigations and 950 new civil health care fraud investigations. All three are the highest numbers ever for healthcare fraud investigations initiated in a single year. During one sweep conducted during February 2011, the Medicare Fraud Strike Force charged 111 defendants in nine cities, and executed 16 search warrants.

In an effort to highlight the successes of the first two years of this effort, and in a continuing effort to enlist the support of local authorities in this initiative, DOJ Attorney General Eric Holder and U.S. Department of Health and Human Services Secretary Kathleen Sebelius scheduled a series of regional health care fraud prevention summits beginning in July 2010. Thus far, these summits have been held in Miami, Los Angeles, Brooklyn, N.Y., Boston, and Detroit. Additional conferences will be held in Las Vegas and Philadelphia. These summits bring together a wide-array of federal, state and local law enforcement agencies, along with beneficiaries, providers and other interested parties to discuss new methods of combating health care fraud, and to publicize law enforcement successes in these cities.

Given the number of arrests, convictions, significant sentences and multi-billion dollar recoveries that have occurred over the past two years, it is likely that Congress will authorize additional funding for this initiative, and the DOJ/HHS effort will continue to yield increasing numbers of criminal matters and monetary recoveries.

Read Patricia Pileggi's previous column. Read Patricia Pileggi's next column.

Patricia Pileggi

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