Federal Govt Received $1.9B from FY21 Healthcare Fraud Settlements

The federal government received almost $1.9 billion in healthcare fraud settlements and judgments in fiscal year 2021, according to a report from the HHS Office of Inspector General (OIG).

The latest edition of the Health Care Fraud and Abuse Control Program (HCFAC) Annual Report detailed how much of the funds were returned to the Medicare Trust Funds and how much went to federal agencies. In addition, the report shared enforcement actions from the Department of Justice (DOJ) during 2021.

In total, the federal government won or negotiated more than $5 billion in healthcare fraud settlements and judgments.

Almost $1.9 billion was returned to the federal government or paid to private persons in FY 2021, the report found. The Department of the Treasury received $656 million from gifts and bequests, civil monetary penalties, asset forfeiture, compensation equal to criminal fines, and penalties and multiple damages.

CMS received over $68 million in Medicare disallowances recovered from HHS/OIG audits and $482 million in restitution and compensatory damages for a total of $551 million.

Overall, $1.2 billion of the funds were transferred to the Medicare Trust Funds, according to the OIG report.

Apart from the Medicare Trust Funds, federal agencies received almost $458 million. Nearly $395 million went to CMS for the federal share of Medicaid and recovered Medicaid disallowances. Meanwhile, federal agencies such as TRICARE, HHS/OIG, Office of Personnel Management, US Postal Service, and DOJ/Drug Enforcement Administration received a total of $63 million.

Private persons received $193 million in payments, stemming from relators who filed suits on behalf of the federal government under the whistleblower provision of the False Claims Act, the report noted.

DOJ opened 831 new criminal healthcare fraud investigations in FY 2021 and federal prosecutors filed criminal charges in 462 cases involving 741 defendants. Of these defendants, 312 were convicted of healthcare fraud-related crimes.

DOJ also opened 805 new civil healthcare fraud investigations and had 1,432 civil healthcare fraud matters pending at the end of the year.

Efforts from the Federal Bureau of Investigation (FBI) led to over 559 operational disruptions of criminal fraud organizations. In addition, the FBI dismantled the criminal hierarchy of more than 107 healthcare fraud criminal enterprises, according to the report.

OIG investigations resulted in 504 criminal actions against individuals or entities involved in crimes related to Medicare and Medicaid and 669 civil actions, including false claims and unjust enrichment lawsuits filed in federal district court and civil monetary penalty settlements.

Nearly 1,700 individuals and entities were excluded from participating in Medicare, Medicaid, and other federal healthcare programs due to criminal convictions for crimes related to Medicare and Medicaid (569), or other healthcare programs (267), beneficiary abuse or neglect (145), or a result of state healthcare licensure revocations (536).

The COVID-19 pandemic increased instances of healthcare fraud involving unnecessary services, unnecessary lab testing, healthcare technology schemes, and fraudulently obtaining COVID-19 healthcare relief funds.

Other common case topics included ambulance and transportation services, diagnostic testing, durable medical equipment, genetic testing, home health providers, managed care, and medical devices.

HHS and DOJ received nearly $1.2 billion in funding from Congress in FY 2021 to combat healthcare fraud and abuse, with $969 million allocated to HHS and $158 million distributed to DOJ. The agencies said the return on investment (ROI) for the HCFAC program between 2019 and 2021 is $4 returned for every $1 spent.

Due to the Medicare sequester suspension under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the HCFAC did not experience any funding sequestration. However, the report noted that $150.6 million in mandatory funds have been sequestered in the last nine years.