In a report released on February 26, 2016, the federal government announced that it recovered $2.4 billion through its Health Care Fraud and Abuse Control Program (HCFAC) during FY 2015. The $2.4 billion is almost $1 billion lower than the recovery of $3.3 billion in FY 2014. Over the last three years, the return on investment (ROI) for the HCFAC program is $6.10 returned for every $1.00 expended. Qui tam litigation accounted for $452 million of the recovery by the federal government.
The report states that the recovery amount was lower due to the sequestration of mandatory funding in 2015, which led to fewer resources for the government to combat fraud and abuse. The government has recovered a decreasing amount in fraud judgments and settlements since FY 2014, when the recovery amount was $1 billion less than the amount in FY 2013.
The HCFAC is operated under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS). The Department of Justice (DOJ) and HHS issues an Annual Report that details the amounts recovered every fiscal year.
FY 2015 Recovery Overview
In FY 2015, the government recovered over $1.9 billion through healthcare fraud judgments and settlements. In addition to the judgments and settlements, the government recovered funds from administrative actions, leading to a total of $2.4 billion returned to the government or relators. Of the $2.4. billion, $1.6 billion was allocated to the Medicare Trust Funds and $135.9 million in federal Medicaid money was transferred to the Treasury.
Approximately $29.4 billion has been returned through HCFAC to the Medicare Trust Funds since the start of the program in 1997, and over $16.2 billion has been returned between 2009 and 2015.
In FY 2015, a total of 613 defendants were convicted of healthcare fraud through DOJ charges. Similarly, the HHS Office of Inspector General (HHS-OIG) investigations led to 800 criminal actions and 667 civil actions in healthcare fraud cases.
The HHS-OIG also excluded 4,112 individuals and entities from participation in Medicare, Medicaid, and other federal healthcare programs. Of the total exclusions: 1,329 of these exclusions were due to criminal convictions for crimes related to Medicare and Medicaid; 424 of the exclusions related to criminal convictions involving other healthcare programs; 302 exclusions were for patient abuse or neglect; and 1,743 exclusions were due to licensure revocations. The number of total exclusions per fiscal year has slightly increased from the 4,017 exclusions in FY 2014.
FCA and Qui Tam Actions
In light of the limited government resources, the HHS Office of the General Counsel (OGC) worked closely with the DOJ in order to recover funds for the federal government. The report details that the OGC supported the DOJ in assessing qui tam actions by interpreting complex Medicare and Medicaid rules and assisted in helping the DOJ discern which allegations were program violations and should be pursued. The OGC helped the DOJ focus limited government tools on those matters that were very likely to result in a recovery for the federal government. OGC also provided litigation support to the DOJ by interviewing and preparing witnesses and responding to requests for documents. The OGC’s involvement in FCA cases and related matters led to over $452 million in recovery for the federal government in FY 2015. The DOJ and OGC typically collaborated on cases including: drug pricing manipulation, illegal marketing activity by pharmaceutical manufacturers that resulted in Medicare and Medicaid paying for drugs for indications not covered, physician self-referral violations, and provider upcoding cases.