OIG Recovered Over $1.5B From Healthcare Fraud Schemes, So Far

June 18, 2020 - The Office of the Inspector General (OIG) at HHS expects to return over $1.5 billion to the federal government from healthcare fraud schemes investigated during the first half of the fiscal year, according to the agency’s spring report to Congress.

Audits conducted by the HHS watchdog between October 1, 2019, and March 31, 2020, also identified over $605 million in expected recoveries, as well as $288.4 million in questioned costs (i.e., costs questioned by OIG because of an alleged violation, costs not supported by adequate documentation, or the expenditure of funds where the intended purpose is unnecessary or unreasonable).

Overall, OIG told policymakers that HHS could save up to $911.3 million if the federal department implemented all of the OIG’s audit recommendations. During the reporting period, OIG made 273 audit and evaluation recommendations, of which HHS Operating Divisions implemented 130.

HHS spent nearly $741 billion on Medicare in 2018 to provide healthcare coverage for nearly 60 million beneficiaries. OIG ensures those funds are being spent appropriately by identifying “illegal activity that can unnecessarily raise costs for the Medicare program or put beneficiaries at risk,” the watchdog stated in the report.

However, in the first half of the fiscal year, OIG uncovered a number of healthcare fraud schemes that resulted in the exclusion of over 900 providers from Medicare, Medicaid, and other federal healthcare programs.

OIG also took 443 criminal actions, as well as civil actions against 370 individuals and entities, during the period, the watchdog reported to Congress.

Several of these actions involved Medicare, notably including healthcare fraud schemes involving providers using beneficiaries’ Medicare Part D eligibility information improperly and a pharmaceutical company entering an $11.85 million False Claims Act settlement for violating the anti-kickback statute by paying copayments of Medicare patients taking its drug. OIG also identified a lack of fraud prevention tools in Medicare Part D to protect against pharmacy fraud (e.g., pharmacy enrollment, revocation, and preclusion).

Additionally, OIG targeted Medicaid program integrity in the first half of the fiscal year through a nationwide program of audits, evaluations, inspections, investigations, and enforcement actions. Some notable actions included OIG testifying about Medicaid program integrity at a congressional hearing, finding that some states could do more to prevent terminated providers from serving Medicaid beneficiaries, and identifying 23 states that allowed unenrolled providers in state Medicaid programs.

Other major actions led by OIG from the start of October 2019 through the end of March 2020 included:

• An alarm on billions of estimated Medicare Advantage payments after chart reviews raised concerns
• Identification of 60 hospitals that received $3.5 billion in excessive outlier payments
• A report that New Jersey claimed $63 million for unallowable Medicaid school-based administrative costs
• An audit that revealed Medicare improperly paid acute-care hospitals $54 million for inpatient claims.
• An audit that found that Medicare improperly paid acute-care hospitals $54 million for inpatient claims.
• A report that New York State claimed Federal reimbursement for unallowable childcare subsidies

OIG also highlighted its efforts to prevent and treat opioid misuse by detecting healthcare fraud schemes, such as a case involving a physician operating a “pill mill” in Virginia and an EHR vendor paying kickbacks for increase opioid prescriptions.

This year so far, the watchdog also reported its actions to protect beneficiaries from abuse, neglect, and unsafe conditions, particularly in the Indian Health System; safeguard the integrity of medical research; promote information sharing in the drug supply chain; and protect unaccompanied children in HHS’ care, including children who entered the US without legal status.

Moving forward, OIG anticipates more of its work in the latter half of the year to involve COVID-19 response efforts from HHS and its providers.

Already, the watchdog has deployed law enforcement personnel to support federal public safety and security assistance to local, state, tribal, territorial, and federal organizations, the report stated. OIG also drew attention to its efforts to protect quarantined patients and those being transferred, detect coronavirus-related fraud schemes, and eliminate telehealth cost-sharing requirements.

“Building on longstanding work focused on emergency preparedness and response, OIG is undertaking and planning oversight of HHS’s COVID-19-related programs to ensure that program requirements are met to protect patient health and safety, that taxpayer funds invested to provide relief to providers and care to patients are not misspent, and that critical infrastructure supporting an effective emergency response is secure,” Christi A. Grimm, Principal Deputy Inspector General, stated in the report.

“OIG is working to provide the public and policymakers in HHS and Congress with sophisticated analyses and relevant, reliable, and actionable data and information,” Grimm added.