Federal Government Recovered $3.3 Billion From the Health Care Industry in FY 2016
According to the Health Care Fraud and Abuse Control Program (“HCFAC”) Annual Report (“Annual Report”), over $3.3 billion[1] were returned to the federal government and private individuals as a result of health care enforcement actions in Fiscal Year (“FY”) 2016.[2] The total FY 2016 return represents an increase of over $2.4 billion when compared to FY 2015. The Annual Report also states that the return on investment (“ROI”) for the HCFAC program is $5 for every dollar expended over the last three years. Moreover, the Department of Justice (“DOJ”) announced that of the billions recovered in FY 2016, $360 million came from hospitals and outpatient clinics. Given the dollars recovered and ROI of the HCFAC program, the health care industry should expect DOJ and the Department of Health and Human Services (“HHS”) to continue its health care enforcement activities.
The HCFAC program was established by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) under the authority of DOJ and HHS. HCFAC was designed to coordinate federal, state and local law enforcement activities in regards to health care fraud and abuse. The HCFAC program is credited with recovering more than $31 billion to the Medicare Trust Fund since its inception in 1997.
The Annual Report is a useful resource for health care providers, particularly Compliance Officers, as it highlights the federal government’s tools used to detect fraud and abuse in the health care program. Such tools include data mining, predictive analytics, trend evaluation and modeling approaches. The Annual Report also highlights costs and returns of federal health care fraud enforcement, amounts recovered from settlements and awards from civil and criminal investigations, and outlines funds allocated for each department function covered by the HCFAC appropriation. Lastly, the Annual Report includes summaries of high-profile criminal and civil cases that violated the False Claims Act.
The Annual Report and DOJ’s announcement reinforce the federal governments focus on fraud prevention activities and continued scrutiny on health care providers. Consequently, health care providers should be proactive in detecting and deterring fraud, waste and abuse through its compliance and auditing activities.
Provident can assist you with your compliance and auditing activities. To learn more about our compliance and auditing services, please contact Cinthia Michel at cmichel@providented.com or visit Compliance Program and Revenue Integrity Audits.
[1] During FY 2016, the federal government recovered $2.5 billion through health care fraud judgements and settlements. But the federal government also attained additional administrative impositions in health care fraud cases and proceedings, as well as those from preceding years. As a result, the total amount recovered is $3.3 billion for FY 2016.
[2] Only reflects federal losses/recoveries and does not reflect state Medicaid monies recovered as part of any global federal-state settlements.