The fight against health care fraud, waste, and abuse in the United States is a long-standing effort, significantly bolstered by the establishment of the Health Care Fraud and Abuse Control (HCFAC) Program in 1997. This program marked a pivotal moment in the approach to safeguarding Medicare and Medicaid funds and protecting both consumers and taxpayers from the detrimental effects of fraudulent activities within the healthcare system. Since its inception, the HCFAC Program has been instrumental in recovering billions of dollars and shifting the focus towards proactive fraud prevention strategies.
The HCFAC Program is not attributed to a single individual but rather emerged as a collaborative initiative spearheaded by key federal agencies. The U.S. Department of Health & Human Services (HHS), through its Office of Inspector General (OIG), the Centers for Medicare & Medicaid Services (CMS), and the U.S. Department of Justice (DOJ) are the primary entities that collectively conceived and developed the HCFAC Program. These agencies recognized the growing need for a coordinated and robust approach to combat health care fraud, moving beyond merely reacting to fraud after it occurred to actively preventing it.
This collaborative creation reflects the complex nature of health care fraud, which requires a multi-faceted approach involving investigation, prosecution, and prevention. By bringing together the expertise and resources of HHS OIG, CMS, and DOJ, the HCFAC Program was designed to be a comprehensive framework for tackling this issue. The program’s strength lies in its interagency cooperation, enabling a more effective and far-reaching impact on fraud reduction.
Since 2010, the HCFAC Program has significantly evolved, empowered by new anti-fraud tools and a proactive stance. This shift moved away from the traditional “pay and chase” model, where fraudulent payments were identified and pursued after disbursement. Instead, the focus turned towards preventing fraudulent claims from being paid in the first place. A crucial element in this evolution was the establishment of the Healthcare Fraud Prevention Partnership (HFPP), which fostered collaboration between government agencies and private sector entities. This partnership recognized that combating health care fraud is a shared responsibility, requiring collective effort to protect all consumers.
The effectiveness of the HCFAC Program is clearly demonstrated by its financial recoveries. In Fiscal Year (FY) 2016 alone, government recoveries exceeded $3.3 billion from health care fraud judgments, settlements, and administrative actions. Looking at the bigger picture, since its inception, the HCFAC Program has returned over $31 billion to the Medicare Trust Funds. Furthermore, in FY 2016, the program demonstrated a remarkable return on investment, recovering $5.0 for every dollar invested in its operations.
Within the HCFAC Program, the Health Care Fraud Prevention and Enforcement Action Team (HEAT) stands out as a vital component. HEAT is a joint initiative of HHS, OIG, and DOJ, specifically created to enhance the fight against health care fraud. A key operational arm of HEAT is the Medicare Fraud Strike Force. This interagency task force brings together analysts, investigators, and prosecutors from OIG and DOJ to target emerging and shifting fraud schemes. They are particularly focused on identifying and prosecuting criminals who disguise themselves as legitimate health care providers or suppliers to defraud the system.
The Medicare Fraud Strike Force has achieved significant results since its establishment in 2007, charging over 3,018 individuals involved in more than $10.8 billion in fraudulent activities. Their operations often involve coordinated national takedowns targeting large-scale fraud schemes. For example, in June 2016, a nationwide health care fraud takedown led to criminal and civil charges against 301 individuals, including 61 medical professionals, for alleged involvement in schemes billing approximately $900 million in false claims. In conjunction with these charges, CMS also utilized its suspension authority to halt payments to numerous providers suspected of fraudulent activities. This particular takedown was notable as the largest in history, both in terms of the number of individuals charged and the total financial loss involved.
Another powerful tool complementing the HCFAC Program is the federal False Claims Act. This legislation allows the DOJ to pursue civil cases against individuals and entities that defraud federal health care programs. In 2016, the DOJ successfully recovered over $2.5 billion through settlements and judgments from civil cases related to fraud and false claims against programs like Medicare and Medicaid, further demonstrating the financial impact of these enforcement efforts.
Beyond enforcement actions, the HCFAC Program also invests in proactive fraud prevention measures:
Advanced Fraud Detection Technology: HCFAC funding supports HHS OIG’s continuous development of sophisticated data analysis tools to detect health care fraud. HHS OIG utilizes data analysis, predictive analytics, trend evaluation, and modeling to improve oversight of HHS programs. By analyzing Medicare claims data for known fraud patterns and suspicious trends, and comparing service ratios against national averages, they can identify potential fraud more effectively. The integration of data analytics with the expertise of HHS OIG agents, auditors, evaluators, and HEAT partners creates a highly effective model for combating health care fraud.
CMS has also implemented the Fraud Prevention System (FPS) since June 2011. FPS operates on all Medicare fee-for-service claims in real-time, employing predictive analytics similar to those used by credit card companies. This system identifies unusual and suspicious billing patterns before payments are made, allowing CMS to swiftly act on leads generated by FPS.
Enhanced Provider Screening and Enrollment: CMS has strengthened provider screening and enrollment requirements as a critical gatekeeping measure for the Medicare program. Since 2011, these enhanced initiatives have significantly contributed to removing ineligible providers from the program. Site visits, revalidation processes, and other measures have resulted in the deactivation and revocation of over 652,000 enrollment records.
Health Care Fraud Prevention Partnership (HFPP): The HFPP, initiated during the Obama Administration, unites private insurers, states, and associations to combat health care fraud nationwide. Participants share information and best practices to detect and prevent fraudulent billings. Since 2013, the HFPP has conducted multiple studies, enabling partners like DOJ, HHS-OIG, FBI, CMS, states, private plans, and associations to implement payment system edits, revocations, and payment suspensions to stop fraudulent payments and enhance collective anti-fraud efforts.
The HFPP has grown significantly, reaching 70 partner organizations in FY 2016, representing over 65 percent of insured individuals in the United States. The volume of data collected for studies increased dramatically in FY 2016, leading to new studies, replication of previous findings with updated data, and actionable leads for fraud prevention.
CMS’s Broader Fraud Prevention Activities:
CMS undertakes a wide range of program integrity activities, many of which extend beyond direct HCFAC funding. These efforts are crucial in ensuring that public funds are used appropriately for legitimate health care services. CMS’s fraud prevention efforts include integrating Medicare and Medicaid program integrity activities, providing guidance to states and providers, conducting fraud investigations and provider audits, and performing state program integrity reviews.
CMS also utilizes the authority granted by the Affordable Care Act to suspend Medicare payments during credible fraud investigations and when reliable information of overpayment exists. In FY 2016, there were 508 payment suspensions active at some point, with 291 new suspensions initiated during that year.
Furthermore, the Medicaid/CHIP Financial Management project focuses on improving CMS’s financial oversight of these programs. In FY 2016, this project led to the removal of an estimated $608 million in questionable Medicaid costs and prevented an estimated $666 million in questionable reimbursements through proactive work with states.
The Open Payments program enhances transparency by publishing data on financial relationships between the health care industry and health care providers. In FY 2016, CMS published data on $7.5 billion in payments and ownership interests, encompassing 11.9 million records related to over 600,000 physicians and 1,116 teaching hospitals.
In conclusion, the Health Care Fraud and Abuse Control Program is a testament to the ongoing commitment of the U.S. government to protect consumers and taxpayers from health care fraud. Created through the collaborative efforts of HHS OIG, CMS, and DOJ, the program has evolved into a sophisticated and effective framework for preventing and combating fraud, waste, and abuse within the health care system. Its continued success is vital for ensuring the integrity of Medicare and Medicaid and safeguarding public resources.
