Health-care fraud crackdown nets $4.1b. Is that a lot?

Officials say nearly $4.1b was recovered last year in the health-care fraud crackdown, an Obama priority, but it's unclear if that reflects the success of law enforcement or the magnitude of the problem. 

Manuel Balce Ceneta/AP
Health and Human Services (HHS) Secretary, Kathleen Sebelius, accompanied by Attorney General Eric Holder, speaks during a news conference to announce the new Health Care Fraud and Abuse Control Program Report, Tuesday, at HHS in Washington.

The federal government recovered nearly $4.1 billion last year in an escalating, nationwide crackdown against health-care fraud, Obama administration officials announced Tuesday.

Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder made the announcement in Washington as they released an annual report on health-care fraud enforcement.

The report shows a sharp increase in the amount of fines and restitution recovered from health-care scams during the Obama administration.

During President Bush’s eight years in office, nearly $1.6 billion was recovered on average each year by federal agents and prosecutors. In contrast, the Obama administration has recovered an average $3.6 billion per year during each of the past three years.

“These accomplishments reflect this administration’s ongoing and intensive efforts to protect the American people and to safeguard precious taxpayer dollars,” Attorney General Holder said.

“It is just one of many ways this administration is working to help the American people at a time when budgets are tight,” he said.

The announcement comes as the president’s health-care reform law – the Affordable Care Act – is under siege among Republicans in Congress and at the US Supreme Court, where lawyers for 26 states will argue next month that it is unconstitutional.

Fighting health-care fraud is essential in an administration that is seeking to dramatically increase the level of federal control over the nation’s health insurance system.

But it is unclear from the report to what extent the increased recoveries are a function of more efficient law enforcement or simply the rampant nature of fraud against the government. Estimates are that health-care fraud diverts more than $60 billion a year from public health care to criminal enrichment.

Administration officials insist they are bringing fraud, waste, and abuse under control.

“We are regaining the upper hand in our fight against health-care fraud,” Secretary Sebelius said. “It has never been harder to rip off Medicare and Medicaid, as it is today,” she said.

The administration has set up health-care fraud task forces in nine cities considered to be “hot spots” of fraud and abuse. The cities are Miami, Los Angeles, Detroit, Houston, Brooklyn, Baton Rouge, Tampa, Chicago, and Dallas. More cities are expected to be added to the effort.

Attorney General Holder said that during the past year the Justice Department had opened more than 1,100 new criminal health-care fraud cases and that more than 1,800 were already pending.

In addition, more than 1,400 individuals were charged in 500 cases, he said. Prosecutors secured 700 convictions. Along the way, the Federal Bureau of Investigation dismantled 70 criminal enterprises engaged in health-care fraud.

Holder said the department’s civil division filed 1,000 new civil cases in addition to 1,000 pending actions. The work resulted in $2.4 billion in recoveries under the federal False Claims Act, he said.

“These are stunning numbers,” Holder said.

He noted that within the past year agents took down two of the largest health-care fraud organizations ever uncovered.

One involved 115 individuals allegedly operating a false billing scam in nine cities that netted more than $240 million. Another group involved 91 individuals allegedly operating a false billing scheme in eight cities that brought in $290 million.

Holder and Sebelius said new measures in the Affordable Care Act will help expand the fight against fraud. One proposed rule would establish, for the first time, a deadline for anyone receiving an excessive payment from the government to pay the excessive amount back.

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