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Are Healthcare Fraud and Abuse Rates on the Decline?

Although healthcare fraud continues to be the number one type of fraud, it could be 23.2 percent lower by the end of the year compared to 2015.

By Catherine Sampson

- If trends persist, 2016 is looking set to have the lowest level of federal prosecutions for healthcare fraud since 1998, according to Transactional Records Access Clearinghouse (TRAC).

Healthcare fraud may be reducing by 23.2 percent this year if trends persist.

TRAC, which is a research organization at Syracuse University, recently published a report regarding healthcare fraud trends using data from the Justice Department for its findings.

For the first six months of this year, the government reported 239 new healthcare fraud prosecutions. In 2015, there were a total of 622 prosecutions, according to TRAC data. If this trend continues, there will be a total of 478 prosecutions by the end of 2016. This would mean that 2016 would have 23.2 percent less healthcare prosecutions than 2015.

Additionally, prosecutions over the past year are lower than they were a decade ago. Healthcare fraud prosecutions are currently down by 9.5 percent from 2006 levels.

Data from TRAC also reviewed that there was a massive spike in prosecutions in 2011, when 1,235 healthcare fraud cases took place. The following year, the number dipped back down to nearly 700 cases.

According to The Crime Report, the Justice Department officials said the increase in 2011 was parallel with what they were seeing when looking at healthcare fraud broadly. That year, the Justice Department reported some large busts, as well as several cases involving fraud in the private sector. For example, in February 2011, the Justice Department prosecuted 111 individuals.

Doctors, nurses and executives were all accused of falsely billing Medicare more than $225 million. It was the Medicare Fraud Task Force’s largest take-down at that time.

The Fiscal Times reported that the huge increase was caused largely by a spike in cases in Puerto Rico, where prosecutors charged 548 defendants with health care fraud.

For 2016 so far, HHS has been responsible for investigating 49.4 percent of healthcare fraud prosecutions, while the FBI has investigated 31.8 percent. The Defense Department handled 3.3 prosecutions, while the Drug Enforcement Agency handled 2.5.

According to TRAC, healthcare fraud currently ranks as the number one leading type of fraud charge. Mail fraud and conspiracy is currently in second place, while False claims relating to health care matters has taken the third-place spot. To put things in perspective, aggravated identity theft is currently the ninth leading type of charge.

In 2015, false claims relating to healthcare matters was the sixth leading type of fraud charge. So although prosecutions for healthcare fraud appears to be reducing, the false claims related to healthcare matters is still on the rise.

For 2015, the government obtained two healthcare fraud prosecutions for every one million people in the US, according to the Justice Department. If the healthcare fraud prosecution for 2016 continues, there would be 1.5 cases per million people by the end of the year. Additionally, Florida, which has a huge Medicare-dependent population, was the epicenter of fraudulent claims in 2011.

TRAC also included a ranking of regions that have the most prosecutions. The Southern District of Florida (Miami) currently has the most prosecutions. It also came in first place last year. The Eastern District of Missouri (St. Louis) is currently ranked second, while the Eastern District of Kentucky (Lexington) ranks third.

The IRS also reports on healthcare fraud prosecutions.  Last month, a doctor in Newark was sentenced for taking bribes in a test-referrals scheme with a New Jersey clinical lab. The total amount of bribes exceeded $353,000, the IRS reported.

In March, a Michigan physician was sentenced to 45 months in prison for taking part in a $5.7 Million Medicare fraud scheme. The physician was also ordered to pay $2,789,409 in restitution.

While fraud in healthcare will most likely never go away altogether, at least it appears to be reducing this year.

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