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GAO flags biggest 'cheaters' in health care

Hospitals were the most frequent targets of civil fraud cases in 2010

Topics: Payer and Regulatory Policy, Market Trends, Strategy, RAC and Other Post-Payment Audits, Revenue Cycle, Finance, Payer and Regulatory Policy

October 10, 2012

Medical centers, clinics, and practices account for a considerable share of health care fraud, according to a new Government Accountability Office (GAO) report outlines the costs and outcomes of 2010 state and federal anti-fraud investigations.

The report—which analyzed data from HHS Office of the Inspector General, the Department of Justice, and 93 U.S. Attorney's Offices, as well as data from 10 state anti-fraud units and public court records—found that 10,187 subjects were investigated for health care fraud in 2010.

Of those cases, 7,848 were criminal fraud cases and 2,339 were civil fraud cases.

Criminal investigations for health care fraud

GAO found that the top five targets of criminal health fraud cases in 2010 were:

  • Medical centers, clinics, or practices (which were involved in 24% of cases);
  • Durable medical equipment suppliers (which were involved in 16% of cases); and
  • Home health agencies (which were involved in 8% of cases);
  • Other kinds of center, clinics, or facilities (which were involved in 8% of cases); and
  • Hospitals (which were involved in 4.5% of cases).

According to the report, only 14% of subjects in these criminal  investigations were charged. Over 85% of those subjects were found guilty, pled guilty, or pled no contest to some or all of the charges, 60% of which were sentenced to incarceration.

Of the 321 hospitals under criminal investigation for health care fraud in 2010, only two were charged and found guilty (or pled guilty or no contest).

Civil investigations for health care fraud

Meanwhile, GAO found that the top five targets of civil health fraud cases in 2010 were:

  • Hospitals (which were involved in 19.5% of cases);
  • Medical centers, clinics, or practices (which were involved in 18% of cases);
  • Other centers, clinics, and facilities (which were involved in 6% of cases);
  • Home health agencies (which were involved in 5% of cases); and
  • Pharmaceutical manufacturers or suppliers (which were involved in 5% of cases).

According to the report, 46.5% of the subjects in these civil investigations were pursued, and 602 cases results in settlements or judgments for the government or for the relator. Only 11 cases ended with judgments for the opposition.

Of the 455 hospitals under civil investigation for health care fraud in 2010, 165 were pursued in cases that resulted in settlements or judgments.

Results of judgments and settlements

The report also found that state Medicaid anti-fraud efforts in 2010 resulted in nearly $829 million in judgments and settlements, with pharmaceutical companies paying more than 60% of the total.

Meanwhile, the report found that OIG in 2010 conducted about 8,900 investigations—nearly 2,800 more than in 2005—resulting in nearly $960 million in fines or restitution. OIG also excluded nearly 2,200 individuals from future participation in Medicare, 60% of whom were nurses.

Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-Iowa) said the report underscores the "excellent work" of investigators targeting health care fraud and highlights the need for continued investments in anti-fraud efforts. "These investments provide a significant return, protecting taxpayer dollars, weeding out bad actors and improving quality of care for beneficiaries," he added (Daly, Modern Healthcare, 10/9 [subscription required]; GAO report, 10/9).

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