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Inspector General Saved Billions in Healthcare This Year

Cheryl Clark, for HealthLeaders Media, December 4, 2009

The Office of Inspector General announced Thursday that it saved $20.97 billion for fiscal year 2009 and highlighted six of the cases that led to those recoveries or savings.

"We continue to make significant progress in our fight against fraud, waste, and abuse in [Health and Human Services] programs, particularly Medicaid and Medicare," said Inspector General Daniel R. Levinson. "We're doing this by leveraging our audit, legal, evaluation, and investigative tools, as well as employing the latest in data analysis technology."

The $20.97 billion includes $16.48 billion in implemented recommendations for how to put funds to better use, $4 billion in "investigative receivables," and $492 million in audit receivables. Successful cases concluded during the latest six-month period ending Sept. 30 are outlined in a 101-page semi-annual report.

Among the successful cases are:

1. Medicare Fraud Strike Force. Operations by this team lead to sentencing of seven Miami-area residents in a Medicare infusion fraud scheme. They were ordered to pay $19.8 million in restitution and were sentenced to prison terms between 37 and 97 months.

The individuals admitted in their guilty pleas to "manipulating patients' blood samples to generate false medical records, ordering and administering medications to treat conditions that were falsely documented with fraudulent test results, and billing Medicare for services that were medically unnecessary or never provided," according to OIG.

The strike force's investigations, the OIG said, resulted in the filing of charges against 138 individuals or entities, which led to 44 convictions and $40.7 million in investigative receivables.

2. State and local pandemic influenza preparedness. This case involved two reviews.

In the first, the OIG found that although the majority of localities had started planning to distribute and dispense vaccines and antiviral drugs, more needed to be done. "In their preparedness plans, selected localities had not addressed most of the vaccine and antiviral drug distribution and dispensing preparedness items," the OIG found.

"Further, although all of the selected localities conducted exercises related to vaccine and antiviral distribution and dispensing, most did not create after-action reports and improvement plans."

In the second, although states and localities are preparing for an influenza surge, they needed to do more. Fewer than half of the selected localities had started to recruit medical volunteers required, and none of the states had implemented electronic systems to manage volunteers. Only three of the five states that OIG reviewed had electronic systems to track beds and equipment. And most localities had not identified triage, admission, and patient care guidelines for a pandemic.

3. Pfizer settlement. Pfizer entered a $1 billion settlement under the False Claims Act in connection with its anti-inflammatory drug, Bextra's marketing and promotion practices, according to OIG.

"Pfizer and Pharmacia & Upjohn agreed to pay a total of $2.3 billion, the case the largest healthcare fraud settlement in history, to resolve both the civil and criminal liability arising from the illegal promotion of certain pharmaceutical products."

4. Medicaid personal care claims in New York. The OIG estimated New York improperly claimed $275.3 million in federal Medicaid reimbursement for personal care claims by providers during calendar years 2004 through 2006. The state did not adequately monitor the city's personal care services program.

5. Barriers to the U.S. Food and Drug Administration to food emergency response.

The OIG conducted two reviews. In the first, it found that in a food emergency, the FDA would likely have difficulty tracing food products through the food supply chain. "We were able to trace only five of the 40 products reviewed through each stage of the food supply chain.

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