Record Number of Healthcare Fraud Prosecutions in 2013

The Justice Department’s Medicare Fraud Strike Force set a record for numbers of healthcare prosecutions in 2013.

The strike force filed 137 cases, charged 345 individuals, secured 234 guilty pleas and succeeded in securing 46 jury trial convictions. The defendants charged and sentenced are facing an average of 52 months in prison.

The strike force is currently operating in nine cities: Baton Rouge, Louisiana; Brooklyn, New York; Chicago, Illinois; Dallas, Texas; Detroit, Michigan; Houston, Texas; Los Angeles, California; Miami and Tampa, Florida. Since its inception in March 2007, strike force prosecutors have charged more than 1, 700 defendants who have collectively billed the Medicare program more than $5.5 billion.

ROI

According to a recent report by the Inspector General for the U.S. Department of Health and Human Services, for every dollar the Departments of Justice and Health and Human Services have spent fighting healthcare fraud, they have returned an average of nearly eight dollars to the U.S. Treasury, the Medicare Trust Fund and others.

U.S. Attorney General Eric Holder said, “By targeting our enforcement efforts to ‘hot spots’ in nine cities, the Medicare Fraud Strike Force is allowing us to fight back more effectively than ever before.”

“Under the supervision of the Criminal Division and U.S. Attorney’s Offices, the Medicare Fraud Strike Force is formed by coordinated teams of investigators and prosecutors—including personnel from the Justice Department, the U.S. Department of Health and Human Services and the FBI—who analyze Medicare claims data to target specific geographic areas showing unusually high levels of Medicare billing.”

A January 27, 2014 statement from the Justice Department stated that “by focusing on the worst offenders engaged in current fraud schemes in the highest intensity regions, the strike force seeks to deter fraud in the target community and prevent it from spreading to other areas. “

“Nationwide Takedown”

An example of the investigations involved the May 2013 “nationwide takedown” by the strike force in eight cities that resulted in charges against 89 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings.

The defendants were charged of committing various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering. The charges were based on a variety of alleged fraud schemes involving various medical treatments and services, primarily home health care, but also mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services.

The defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. In many cases 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 then submit fraudulent billings to Medicare.  Collectively, the defendants were accused of conspiring to submit a total of approximately $223 million in fraudulent billing.

Overutilization and Physicians

As we reported recently, the government is taking a new direction in prosecuting providers not just for patently criminal conduct, but under the anti-kickback statute in the context of overutilization due to alleged physician conflicts of interests.