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Feds ID $4.4B in Misspent Money in 2017

By John Commins  
   December 29, 2017

The Department of Health and Human Services’ Office of the Inspector General serves up a year-end review of its greatest hits for 2017.

Federal auditors identified an estimated $4.4 billion in misspent Medicare, Medicaid and human services program dollars in fiscal 2017, the Department of Health and Human Services Office of Inspector General said in a semiannual report to Congress.

"We continue to cultivate a workforce with the skills and talents to excel in data-driven oversight," HHS Inspector General Daniel R. Levinson said in remarks accompanying the report.

"By leveraging advanced analytic techniques to detect potential vulnerabilities and fraud trends, we are better able to target our resources at those areas and individuals most in need of oversight, leaving others free to provide care and services without unnecessary disruption," Levinson said.  

The OIG report shows that for FY 2017, $296 million was returned based on program audit findings over six months, and about $4.1 billion in "investigative" receivables for the full fiscal year. Investigative receivables include recoveries from criminal actions, civil and administrative settlements, civil judgments, and administrative actions by OIG.

OIG brought criminal actions against 881 people in 2017, and an additional 826 civil actions, including false claims and unjust-enrichment lawsuits, civil monetary penalty settlements, and administrative recoveries related to self-disclosures.

The agency booted 3,244 people and entities from participating in federal healthcare programs.

Some highlights from 2017:

  • OIG was involved in the largest national healthcare fraud takedown in history. More than 400 defendants across the nation were charged with participating in fraud schemes involving about $1.3 billion in false billings to Medicare and Medicaid. Opioid-related charges were brought against 120 people, including 27 doctors.
  • OIG identified concerns about extreme use and questionable prescribing of opioids in Medicare Part D. In 2016, half a million beneficiaries received high amounts of opioids through Medicare Part D, and almost 90,000 of them were at serious risk of opioid misuse or overdose. Moreover, 401 prescribers had questionable prescribing patterns.
  • Mylan Inc. agreed to pay $465 million to resolve False Claims Act liability for allegedly improperly classifying EpiPen as a generic drug with the Medicaid drug rebate program, resulting in underpaid rebates to Medicaid and overcharges to entities participating in the 340B Drug Discount Program.
  • eClinicalWorks, LLC, and three of its senior executives agreed to pay $155 million for allegedly causing healthcare providers to submit false claims in connection with the Medicare and Medicaid Electronic Health Record Incentive Programs by concealing from ECW's customers that ECW's software did not comply with the requirements for "meaningful use" certification.
  • OIG's review of emergency room visits found that the injuries of 134 Medicare beneficiaries residing in skilled nursing facilities may have resulted from potential abuse or neglect. More than a quarter of these incidents may not have been reported to law enforcement at the time. OIG referred all 134 incidents to law enforcement.
  • OIG estimated that CMS paid $730 million to providers who did not meet federal requirements for meaningful use. CMS also made $2.3 million in incentive payments for the wrong payment year when providers switched between incentive programs.
  • Limitations in claims data impede CMS's ability to identify Medicare's costs for replacement of devices that were recalled or that failed. OIG estimated costs totaled $1.5 billion for Medicare and $140 million for beneficiaries over the 10-year period ending on Dec. 31, 2014, for seven recalled and failed cardiac devices.
  • OIG found that the Medicare Shared Savings Program shows potential to reduce spending and improve quality. Most Accountable Care Organizations in the MSSP reduced spending and improved quality of care during the first three years of the program. A small subset of ACOs showed substantial reductions in Medicare spending for key services.    

John Commins is a senior editor at HealthLeaders.

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