Report Highlights Record-Breaking Year of Enforcement for HHS and DOJ

by Mintz Levin - Health Law & Policy Matters

Yesterday, the Department of Health and Human Services (“HHS”) and the Department of Justice (“DOJ”) released their Annual Report for the Health Care Fraud and Abuse Control Program (the “Program”). The report highlights the Program’s “record-breaking year” in which the government recovered $4.2 billion, the highest annual total to date, and returned $7.90 for every health care fraud enforcement dollar spent over the last three years.


The statistics and dollar values summarized in the report are impressive and serve as a reminder to those involved in the health delivery system to take fraud and abuse compliance seriously.

  • Over $3.0 Billion in Federal health care fraud judgments and settlements
  • $4.2 Billion recovered by the Program
    • $2.4 Billion transferred to the Medicare Trust Funds
    • $835.7 Million in Federal Medicaid money transferred to Treasury
    • $284.5 Million in Relators’ Payments
  • 1,131 new criminal heath care fraud investigations opened by DOJ; 2,032 health care fraud criminal investigations pending
  • 885 new civil investigations opened by DOJ; 1,023 matters pending at the end of the fiscal year
  • 826 defendants convicted of health care fraud-related crimes
  • 3,131 individuals and entities excluded from federal health care programs


The report also highlights many significant Program prosecutions, including:

  • Federal indictments for the largest fraud orchestrated by a single physician in the history of HEAT and the Medicare Fraud Strike Force. Dallas Medicare Fraud Strike Force activities resulted in the February 2012 Federal grand jury indictment of a Dallas area doctor and five other individuals for their roles in a $374 million dollar fraud scheme, involving more than 11,000 individual patients over five years.
  • The longest prison sentence in the history of the Medicare Fraud Strike Force when the U.S. District Court in Miami sentenced the owner and operator of a community mental health center in Miami to 50 years in prison for his participation in a kickback and money laundering scheme.
  • The conviction of a Georgia DME company in connection with the takedown of an organized crime ring. The owner of the company was charged with identity theft of multiple Medicare recipients and fraudulent billing for those recipients. The owner received a 12 year prison sentence and was excluded from participating in federal health care programs for 20 years.    


The government’s proactive approach to fraud prevention and detection is highlighted throughout the report. The agencies continue to focus on data aggregation, sharing and analysis to identify fraud and questionable billing practices. However, the agencies also reported shortfalls in the Medicaid and Medicare Integrity Contractor programs, citing issues with data inaccuracy, omitted data, and inconsistent reporting. It is likely that in the coming year the agencies will to seek to improve their access to data and will increase collection and reporting requirements for providers, suppliers, and payors. In fact, the report highlights the increased reporting Medicare Advantage plans will be subject to under the Medicare Advantage Encounter Data Processing System.

Hope Foster, Chair of Mintz Levin’s Health Care Enforcement Defense Practice, advises health care companies to continue to take fraud and abuse risks seriously:

“Providers, suppliers and manufacturers should seriously consider implementing robust compliance programs to prevent or detect fraud and abuse – of the $4.2 Billion recovered in FY2012, more than $284 Million (6.7%) was paid to relators under whistleblower suits.”  

The report signals the federal government’s continued commitment to combatting health care fraud.  With enforcement trends likely to continue in 2013, a compliance plan and proactive strategies to prevent fraud and abuse are key for all health care providers.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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