Medicare Fraud Settlements Up 56% in FY 2010

Investments in Medicare fraud detection and enforcement are paying for themselves many times over with record-high recoveries of ill-gotten tax dollars, the Obama administration says.

Federal officials say that fraud prosecutions in fiscal year 2010 resulted in more than $4 billion returned to the Medicare Health Insurance Trust Fund, an increase of $1.4 billion – or 56% -- over FY2009. The $4 billion recovered in FY 2010 includes a record $2.5 billion in settlements and judgments obtained by the Department of Justice for False Claims Act violations connected to healthcare fraud -- a 53% increase over $1.63 billion collected in FY 2009, DOJ and the Department of Health and Human Services said in a joint announcement.

Speaking at healthcare fraud prevention summit in Detroit on Tuesday, HHS Secretary Kathleen Sebelius said the administration is making progress in its crackdown on healthcare fraud and waste. "Thanks to provisions in the Affordable Care Act, the prospects for a criminal thinking about targeting our healthcare system have gotten a lot gloomier," Sebelius said in a joint statement with U.S. Attorney Eric Holder. "Here in Detroit, we are honoring our commitment to America's seniors, meeting our obligation to taxpayers, and standing up to criminals who, in the past, have gotten away with far too much."  

Detroit has been targeted by the federal government as a hotspot for Medicare fraud. Holder said the joint efforts of DOJ/HHS in the Motor City have been noteworthy. Since May 2009, charges have been brought against 120 people in 18 separate criminal cases for fraud schemes totaling $120 million.

So far, eight people have been convicted at trial and 63 have pleaded guilty.

"Here in Detroit and communities across this region, many of you have witnessed the devastating effects of healthcare fraud," Holder said. "Through a collaborative DOJ-HHS effort, we are working in partnership with government, law enforcement and industry leaders to protect taxpayer dollars, control healthcare costs and ensure the strength and integrity of our most essential healthcare programs. The results are clear: thanks to our efforts, healthcare fraud schemes throughout this region and across the country are being aggressively and permanently shut down."

DOJ/HHS-led Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles into nine healthcare fraud hot spots including Houston; Detroit; Brooklyn; Baton Rouge, LA; Tampa, FL; Chicago and Dallas. Since their inception in 2007, Strike Force operations have charged more than 1,000 defendants for Medicare fraud involving more than $2.3 billion in claims, DOJ/HHS said.

The Affordable Care Act earmarks $350 million to combat healthcare fraud over the next 10 years through the Health Care Fraud and Abuse Control Account. The law toughens sentencing, enhances screenings and enrollment requirements, encourages increased data sharing across government, expands overpayment recovery efforts, and provides greater oversight of private insurance abuses, DOJ/HHS said.