Dive Brief:

• The federal government won or negotiated more than $5 billion in healthcare fraud judgments and settlements in its 2021 fiscal year, the largest amount ever in the history of the HHS and Department of Justice’s fraud and abuse enforcement program.
• Due to those and other efforts from previous years, the government clawed back almost $1.9 billion, according to a new report from the departments.
• Of that $1.9 billion, about $1.2 billion went to the Medicare trust funds, which are on increasingly precarious financial footing due to growing stress on the insurance program. In addition, roughly $99 million in federal Medicaid money was transferred back to the CMS.

Dive Insight:

Around 25 years ago, the HIPAA privacy law established the Health Care Fraud and Abuse Control Program, bringing together the DOJ and the HHS to coordinate law enforcement actions related to healthcare fraud and abuse, a perennial problem in the U.S.

Bad actors see significant opportunities for profit in the $4 trillion industry. Now, that fraud has been exacerbated by the pandemic as the COVID-19 public health response caused billions in new federal dollars to flow to healthcare companies with little oversight.

Over the past decade, the government has focused more resources on cracking down enforcement, establishing groups like the Medicare Fraud Strike Force in 2007 and the Opioid Fraud and Abuse Detection Unit in 2017. More recently, in May 2021, the DOJ formed a specific pandemic-related task force.

Such efforts can be financially worthwhile for the federal government. HCFAC, for example, has had a return on investment of $4 for every $1 spent over the past three years — a calculation that doesn’t include the potential effect of preventing future fraudulent activities through the treat of oversight alone, according to the report.

In the 2021 fiscal year, the DOJ opened more than 830 new criminal healthcare fraud investigations. That’s down from the roughly 1,150 launched in 2020 and the 1,060 launched in 2019.

Prosecutors filed criminal charges in more than 460 cases, roughly in line with the average of past years. More than 310 defendants were convicted of healthcare fraud crimes.

Investigations from the HHS Office of Inspector General resulted in more than 500 criminal actions against people or organizations for Medicare and Medicaid-related crimes, and almost 670 civil actions, which include false claims lawsuits and civil monetary penalty settlements, the report said.

Fraud cases last year ranged from improper psychiatric treatment to providing false Medicare claims and illegal kickback schemes

In some high-profile cases, Ohio-based system Akron General (acquired in 2015 by Cleveland Clinic) agreed to pay $21.2 million in July 2021 to settle claims that it had a referral scheme resulting in false Medicare claims. In May 2021, the University of Miami agreed to settle allegations it was ordering medically unnecessary lab tests through off-campus facilities for $22 million.

In August 2021, California-based giant Sutter Health agreed to pay $90 million over allegations the system was making beneficiaries enrolled in its Medicare Advantage plans appear sicker in exchange for higher government reimbursement.

Software companies also faced investigation. In January 2021, electronic health record vendor Athenahealth agreed to pay more than $18.2 million to resolve allegations that it paid kickbacks to incentivize sales of its software. EHR provider CareCloud agreed to pay $3.8 million to resolve similar allegations in April 2021.