Last Year, Federal Authorities Recovered $3.1 Billion Lost To Healthcare Fraud And Abuse

July 19, 2021

By a Biometrica staffer

Earlier this month, officials released the 2020 edition of the annual audit of the Health Care Fraud and Abuse Control Program (HCFAC) that is jointly run by the Departments of Health and Human Services (HHS) and Justice (DOJ). According to the report, a total of $3.1 billion in false and fraudulent claims was recovered and returned to the federal government or individual persons in the 2020 fiscal year.

Of that total, around $1.8 billion was from judgments and settlements last year, while the rest was the result of investigations from previous years. In terms of where the money then went — $2.1 billion went to the Medicare Trust Fund, and $128.2 million in Medicaid funds was directed to the Treasury Department. 

The HCFAC was established under the the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and is administered by the HHS’ Office of the Inspector General (HHS-OIG). It aims to connect law enforcement at the federal, state, and local levels to tackle healthcare fraud and abuse.

Additionally, the Federal Bureau of Investigation (FBI) took down over 100 criminal syndicates involved in healthcare fraud, and interrupted the criminal activity of more than 400 operations.

The DOJ convicted 440 people of healthcare-related crimes. Criminal charges were filed in 412 cases, against a total of 679 defendants. The DOJ opened around just under 1,100 new civil healthcare fraud investigations, with a further 1,498 incidents still pending action by the end of the financial year.

Almost 600 criminal actions were undertaken as a result of investigations conducted by the HHS-OIG last year, mainly in fraud related to Medicare and Medicaid. Further, these investigations also resulted in nearly 800 actions taken against civilians for assorted crimes such as filing false claims. In addition, 2,148 people and entities were disqualified from participating in Medicare, Medicaid, and other federal healthcare programs, for multiple reasons, including being convicted for crimes related to Medicare and Medicaid fraud, abusing or neglecting patients, and having a state license revoked.

In 2020, the departments faced the additional challenge of fraud related specifically to Covid-19 and criminal elements seeking to take advantage of people’s fear and uncertainty, as well as the overburdened insurance and healthcare systems. Under the COVID-19 Anti-Fraud Initiative, the FBI was able to track and identify medical entities over billing customers, engaging in price gouging, practicing fraudulent billing, etc.

In addition, many criminals engaged in counterfeiting and the black market trade of medical equipment, personal protective equipment, masks, etc.

The report says that due to the sequestration of mandatory funding last year, all departments engaged in fighting medical and healthcare fraud had fewer resources at their disposal to tackle the rise noted in such types of predatory activities.