Fact Sheets

The Health Care Fraud and Abuse Control Program Protects Consumersand Taxpayers by Combating Health Care Fraud

The Health Care Fraud and Abuse Control Program Protects Consumers

and Taxpayers by Combating Health Care Fraud

The Affordable Care Act has helped the Government Fight Fraud, Strengthen Health

Insurance Programs, Protect Consumers, and Save Taxpayer Dollars

The Obama Administration is committed to reducing fraud, waste, and abuse across the government.  Since 2010, the U.S. Department of Health & Human Services, Office of Inspector General (HHS OIG), the Centers for Medicare & Medicaid Services (CMS), and the U.S. Department of Justice (DOJ) have been using powerful, new anti-fraud tools to protect Medicare and Medicaid by shifting beyond a “pay and chase” approach toward fraud prevention. Through the groundbreaking Healthcare Fraud Prevention Partnership, stronger relationships have been built between the government and private sector to help protect all consumers.

These focused efforts are successful.  In Fiscal Year (FY) 2014, the government recovered $3.3 billion as a result of health care fraud judgments, settlements and additional administrative impositions in health care fraud cases and proceedings.  Since its inception in 1997, the Health Care Fraud and Abuse Control (HCFAC) Program has returned more than $27.8 billion to the Medicare Trust Funds.  The HCFAC program has returned $7.70 for each dollar invested. 

The Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative between HHS, OIG, and DOJ, has played a critical role in the fight against  health care fraud.  A key component of HEAT is the Medicare Fraud Strike Force – interagency task force teams comprised of OIG and DOJ analysts, investigators, and prosecutors who target emerging or migrating fraud schemes, including fraud by criminals masquerading as health care providers or suppliers.

Since 2007, the Medicare Fraud Strike Force has charged over 2,100 individuals involved in more than $6.5 billion in fraud.  Many of these charges have resulted from coordinated, multi-district national takedowns. Since 2010, the Medicare Fraud Strike Force has conducted seven national takedowns, resulting in charging nearly 700 people with a total of more than $2.2 billion in fraud, including a 90-person, $260 million takedown in six cities in May 2014.  The Medicare Fraud Strike Force has a current conviction rate of approximately 95 percent. The average term of incarceration for individuals charged by the Medicare Fraud Strike Force  exceeds 4 years.

Another powerful tool in the effort to combat health care fraud is the federal False Claims Act.  In 2014, the Justice Department obtained $2.3 billion in settlements and judgments from civil cases involving fraud and false claims against federal health care programs such as Medicare and Medicaid.  Since January 2009, the Justice Department has recovered more than $15.2 billion in cases involving health care fraud.  These amounts reflect federal losses only.  In many of these cases, the department was instrumental in recovering additional billions of dollars for state health care programs.

Other steps the administration has taken to fight fraud include:

Health Care Fraud Prevention Partnership:  The Obama Administration has joined with private insurers, states, and associations in the Health Care Fraud Prevention Partnership (HFPP) to prevent health care fraud on a national scale.  To detect and prevent payment of fraudulent billings, HFPP will exchange information and best practices across the public and private sectors.  From 2013 through 2014, HFPP completed early “proof-of-concept” studies that enabled partners, including DOJ, HHS-OIG, FBI, and CMS, states, private plans, and associations to take substantive actions, such as payment system edits, revocations, and payment suspensions to stop fraudulent payments and improve the government’s collective forces against waste, abuse, and fraud.

State-of-the-Art Fraud Detection Technology:  HCFAC funding also supported HHS OIG’s continued enhancement of data analysis capabilities for detecting health care fraud, including tools that allow for complex data analysis.  HHS OIG continues to use data analysis, predictive analytics, trend evaluation, and modeling approaches to better analyze and target oversight of HHS programs.  Analysis teams use data to examine Medicare claims for known fraud patterns, identify suspected fraud trends, and calculate ratios of allowed services as compared to national averages.  Combining the expertise of HHS OIG agents, auditors, and evaluators, as well as our HEAT partners, with data analytics and traditional investigative skills has fostered a highly effective model for fighting health care fraud.

Since June 2011, CMS uses the Fraud Prevention System (FPS) on all Medicare fee-for-service claims on a streaming, national basis.  Similar to the fraud detection technology used by credit card companies, FPS applies predictive analytics to claims before making payments in order to identify aberrant and suspicious billing patterns.  CMS uses leads generated by FPS to trigger actions that can be implemented swiftly.  Early results from FPS show significant promise.  In the second year, the identified savings (certified by HHS OIG) associated with these prevention and detection actions were $210.7 million – almost double the amount identified during the first year of the program.  This resulted in more than a 5-to-1 return on investment, an increase from the first year’s 3-to-1 return.

Senior Medicare Patrols:  The Obama Administration has significantly expanded funding for Senior Medicare Patrols (SMP) – groups of senior citizen volunteers who educate and empower their peers to identify, prevent, and report health care fraud.  In 2013, the 54 SMP projects had a total of 5,406 active volunteers.  These volunteers conducted 148,235 one-on-one counseling sessions and 14,924 group education sessions.  In total, 501,405 beneficiaries attended these group education sessions.  The projects also reported conducting 181,143 media airings, which could be any distribution of media (e.g., print, radio, television, or electronic), to provide education about fraud and the services of the project.  Additionally, the projects reported conducting 10,545 community outreach education events.  Local SMP offices provide assistance when issues are identified, ensuring that mistakes are corrected and suspected fraud is referred to the appropriate authorities.  Since the program’s inception 17 years ago, $114.5 million in total expected savings to Medicare and Medicaid could be attributable to SMP projects.

Enhanced Provider Screening and Enrollment Requirements:  Provider enrollment is the gateway to billing the Medicare program, and CMS implemented new critical safeguards in efforts to better screen providers enrolling in the Medicare program.  The Affordable Care Act required CMS to revalidate all existing 1.5 million Medicare suppliers and providers under new risk-based screening requirements.  CMS will have requested revalidations by March 2015.  As a result of revalidation and other proactive initiatives, CMS deactivated more than 470,000 enrollments and revoked nearly 28,000 enrollments to prevent certain providers from re-enrolling and billing the Medicare program.  Both of these actions immediately stop billing. A provider with deactivated billing privileges can reactivate at any time, and a revoked provider is barred from re-entry into Medicare for a period ranging from 1 to 3 years.

In May 2014, CMS issued a final rule that requires prescribers of Part D drugs to enroll in Medicare and undergo screening.  In December 2014, CMS issued a final rule that provides additional authority to remove bad actors from the Medicare program, including providers affiliated with outstanding Medicare debts and providers that have a pattern or practice of abusive billing.

Greater Oversight of Private Insurance Abuses:  The new law also provides enhanced tools and authorities to address abuses of multiple employer welfare arrangements and protect employers and employees from insurance scams.  This new law, along with new rules to increase accountability in the insurance industry, is designed to protect consumers and increase the affordability of health care.

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