The Health Care Fraud and Abuse Control (HCFAC) Program stands as a critical initiative in safeguarding both consumers and taxpayers from the pervasive threat of health care fraud, waste, and abuse. Established in 1997, this program has been instrumental in combating illegal activities within the U.S. health care system. Spearheaded by collaborative efforts from 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), the HCFAC Program has evolved to proactively prevent fraud, moving beyond a reactive “pay and chase” approach. This shift has been significantly enhanced by innovative anti-fraud tools and the groundbreaking Healthcare Fraud Prevention Partnership, fostering stronger alliances between government agencies and the private sector to protect individuals across the nation.
These dedicated efforts are yielding substantial results. In Fiscal Year 2016 alone, the government successfully recovered over $3.3 billion through health care fraud judgments, settlements, and administrative actions. Remarkably, since its inception, the HCFAC Program has returned over $31 billion to the Medicare Trust Funds. Highlighting its efficiency and impact, for every dollar invested in the past fiscal year, the HCFAC program returned $5.0. This demonstrates the program’s significant return on investment and its effectiveness in protecting public funds and ensuring the integrity of the health care system.
A cornerstone of the HCFAC Program’s success is the Health Care Fraud Prevention and Enforcement Action Team (HEAT). This joint initiative brings together the expertise and resources of HHS, OIG, and DOJ to aggressively target health care fraud. HEAT’s crucial component, the Medicare Fraud Strike Force, is an interagency task force composed of analysts, investigators, and prosecutors from OIG and DOJ. This specialized team focuses on identifying and dismantling emerging and shifting fraud schemes, particularly those perpetrated by criminals who disguise themselves as legitimate health care providers or suppliers.
Since 2007, the Medicare Fraud Strike Force has brought charges against over 3,018 individuals implicated in more than $10.8 billion in fraudulent activities. Many of these charges stem from coordinated, multi-district national operations, showcasing the scale and reach of these enforcement actions. In a landmark nationwide health care fraud takedown in June 2016, the Medicare Fraud Strike Force charged 301 individuals, including 61 doctors, nurses, and other licensed medical professionals, with criminal and civil offenses. These individuals were allegedly involved in health care fraud schemes totaling approximately $900 million in false billings. Furthermore, CMS is actively utilizing its suspension authority to halt payments to numerous providers under investigation. This coordinated takedown represents the largest in history, both in the number of defendants charged and the financial losses involved, underscoring the program’s commitment to aggressively pursuing and prosecuting health care fraud.
Another powerful instrument in the fight against health care fraud is the federal False Claims Act. In 2016, the DOJ secured over $2.5 billion in settlements and judgments from civil cases related to fraud and false claims against federal health care programs, including Medicare and Medicaid. This legal tool allows the government to recover significant sums and penalize those who defraud these vital programs.
The HCFAC program leverages several advanced strategies and technologies to combat fraud effectively:
State-of-the-Art Fraud Detection Technology: HCFAC funding supports HHS OIG’s continuous advancements in data analysis capabilities designed to detect health care fraud. HHS OIG employs data analysis, predictive analytics, trend evaluation, and modeling to enhance oversight of HHS programs. Dedicated analysis teams meticulously examine Medicare claims for established fraud patterns, pinpoint emerging fraud trends, and compare service ratios against national averages. The program is continuously developing innovative analytic tools and methods to perform increasingly sophisticated data analysis. This fusion of expertise from HHS OIG agents, auditors, and evaluators, alongside HEAT partners, with data analytics and traditional investigative techniques, has cultivated a highly effective model for combating health care fraud.
Since June 2011, CMS has implemented the Fraud Prevention System (FPS) across all Medicare fee-for-service claims on a continuous, national scale. Mirroring fraud detection technology used by credit card companies, FPS applies predictive analytics to claims prior to payment, identifying unusual and suspicious billing patterns. CMS utilizes leads generated by FPS to promptly initiate actions, enabling swift intervention and prevention of fraudulent payments.
Enhanced Provider Screening and Enrollment Requirements: Recognizing that provider enrollment serves as the entry point for billing the Medicare program, CMS has implemented enhanced safeguards to rigorously screen providers seeking to enroll. Since 2011, CMS’s strengthened provider screening and enrollment initiatives within Medicare have significantly impacted the removal of ineligible providers from the program. Site visits, revalidation processes, and other proactive measures have contributed to the deactivation and revocation of over 652,000 enrollment records, ensuring a higher level of integrity within the provider network.
Health Care Fraud Prevention Partnership (HFPP): The Health Care Fraud Prevention Partnership represents a collaborative effort, uniting private insurers, states, and associations to combat health care fraud on a national scale. HFPP participants facilitate the exchange of information and best practices across both public and private sectors to detect and prevent fraudulent billing. Since 2013, HFPP has conducted eight comprehensive studies, empowering partners, including DOJ, HHS-OIG, FBI, CMS, state agencies, private plans, and associations, to implement concrete actions. These actions encompass payment system edits, revocations, and payment suspensions, effectively halting fraudulent payments and bolstering the collective defense against fraud, waste, and abuse.
- In FY 2016, the HFPP expanded its reach to 70 partner organizations, representing over 65 percent of insured individuals within the United States, marking a 30 percent increase since FY 2015. The volume of data collected to support these studies has surged by 300 percent in FY 2016, enabling the execution of new studies, replication of previous studies with updated data, and the generation of actionable leads for fraud prevention and enforcement.
CMS Fraud Prevention Efforts
CMS is dedicated to ensuring that public funds are used appropriately, accurately paying legitimate entities for valid services provided to eligible beneficiaries of federal health care programs. CMS undertakes a wide array of program integrity activities, many of which extend beyond the direct funding scope of the HCFAC Account or discretionary HCFAC funding. These include Medicare Fee-for-Service and Medicaid improper payment rate measurements, activities of the Fraud Prevention System and Recovery Audit Program, and prior authorization initiatives, all detailed in separate reports. CMS consolidates these efforts in a combined Medicare and Medicaid Integrity Program report to Congress annually. Key CMS fraud prevention efforts include:
- Throughout FY 2016, CMS continued to integrate Medicare and Medicaid program integrity efforts and provided technical guidance to states, providers, and stakeholders. CMS actively conducted Medicare and Medicaid fraud investigations, provider audits, and state program integrity reviews.
- In FY 2016, CMS maintained its utilization of Affordable Care Act authority to suspend Medicare payments to providers under credible fraud allegations. CMS also holds the authority to suspend payments based on reliable overpayment information. During FY 2016, 508 payment suspensions were active at some point (data as of October 31, 2016), with 291 new suspensions initiated during the fiscal year.
- Through the Medicaid/CHIP Financial Management project, CMS funding specialists, including accountants and financial analysts, worked to enhance financial oversight of the Medicaid Program and CHIP. In FY 2016, CMS addressed an estimated $608 million of questionable Medicaid costs (approximately $230 million recovered and $378 million resolved) out of $8.0 billion identified. Furthermore, an estimated $666 million in questionable reimbursement was prevented through funding specialists’ proactive work with states to promote sound Medicaid financing practices.
- Open Payments, a national program, fosters transparency by publishing data on financial relationships between the health care industry (manufacturers and group purchasing organizations) and health care providers (physicians and teaching hospitals). In Fiscal Year 2016, CMS disclosed $7.5 billion in payments and ownership/investment interests from manufacturers and GPOs to physicians and teaching hospitals. This encompassed 11.9 million records attributable to 618,931 physicians and 1,116 teaching hospitals.
In conclusion, the Health Care Fraud and Abuse Control Program is a vital framework for protecting the U.S. health care system, taxpayers, and consumers. Through proactive prevention strategies, robust enforcement actions, and innovative technologies, the HCFAC Program continues to effectively combat health care fraud, ensuring the integrity of essential health care services and the appropriate use of public funds.
