Tony West: Waging War on Medicare, Medicaid Fraud

“We have been able to bring back in the last year-and-a-half over $4 billion lost to healthcare fraud.”

In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. All of them are playing a crucial role in making the healthcare industry better. This is Tony West's story.

The settlement this year with Nashville-based FORBA Holdings LLC was far from the biggest fraud case that the Department of Justice has prosecuted.

But for Tony West, assistant attorney general for DOJ's civil division, the satisfaction he got with that dental management company case represents a big reason he left a thriving private law practice to return to the Department of Justice as a political appointee when President Obama took office in 2009.

"We found through our investigation not only were they cheating Medicaid, the way they were cheating Medicaid was by performing unnecessary procedures and surgeries on kids," West said. "They were pulling healthy teeth. They were giving kids unnecessary root canals; some really horrific things. We went after that company. Not only did we settle for a large amount of money, $24 million, but we also obtained the company's cooperation in our ongoing investigation of individual dentists."

It's hard to put a finger on the cost of Medicare and Medicaid fraud. Daniel R. Levinson, Inspector General at the Department of Health & Human Services, estimated for Congress this year that 7.8% of Medicare fee for service claims paid in 2009—roughly $24.1 billion—did not meet program requirements, although he stressed that the improper payments did not necessarily involve fraud.

A program as big as Medicare is ripe for fraud, which can take many forms. It could be a bogus durable medical equipment shop that's actually a post office box in Miami or Detroit. It could be a hospital using indigents to bill Medicare for unneeded services. It could be a multinational pharmaceutical company illegally marketing its medications for off-label uses not recognized by the Food and Drug Administration.

Regardless of the exact dollar amount, West concedes that fraud is a huge problem for Medicare and Medicaid, both in terms of lost money, and the corrosive effect on public confidence. 

"It's been very damaging. Some people view Medicare fraud as a victimless crime because you don’t see it in the same way you would see street crime. But it really does damage the integrity of our public healthcare programs, which so many Americans depend upon for their care," West says.

"We lose so much of our hard-earned taxpayer dollars because of fraud. We have been able to bring back in the last year-and-a-half over $4 billion lost to healthcare fraud. While there is more than that that is being lost to fraud, it does represent an increase because we have been so aggressive cracking down on it."

In May 2009, HHS and DOJ joined forces to create HEAT, the Healthcare Fraud Prevention and Enforcement Action Team, and West says it's working.

"Every year, we have seen an increase in our ability to bring back taxpayer dollars lost to fraud," he said. "The cases do have a deterrent effect. If you look at the criminal side, you've seen an increase in our healthcare strike forces that we have set up around the country. We have seen an increase in the number of criminal defendants that have been arrested and are going to trial and are being held accountable."

West acknowledges that the crackdown on Medicare and Medicaid fraud is also highly symbolic now, as the Obama Administration begins implementing the complex healthcare reforms.

"When you look at the Medicare/Medicaid system, you are talking about trillions of dollars. It is just immense. The millions of Americans that rely on those two programs and the lives they touch is very far reaching and wide ranging," he says. "The fact that we can not only do the job of administering those two programs that help so many Americans, but at the same time crack down on waste fraud and abuse where we see it, and really step up the number of individuals and companies that we hold accountable for healthcare fraud is a testament to the work we have been doing over the past two years."