Deeper Than the Headlines: DOJ OIG Annual Report

What You Need to Know About the DOJ OIG Annual Report

On April 6, 2018, the OIG and DOJ posted the annual report for fiscal year 2017 for the Health Care Fraud and Abuse Control Program. To refresh your memory, the Health Care Fraud and Abuse Control Program (HCFAC) was authorized under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The intent was to establish a program to coordinate federal, state and local law enforcement activities with respect to healthcare fraud and abuse.

And according to the report, HCFAC is in its twenty-first year of operation and “the Program’s continued success confirms the soundness of a collaborative approach to identify and prosecute the most egregious instances of healthcare fraud, to prevent future fraud and abuse, and to protect program beneficiaries.”

During fiscal year 2017, the Federal Government won or negotiated over $2.4 billion in health care fraud judgments and settlements. Because of these efforts, as well as those of preceding years, in FY 2017 $2.6 billion was returned to the Federal Government or paid to private persons. Of this $2.6 billion, the Medicare Trust Funds received transfers of approximately $1.4 billion during this period, and $406.7 million in Federal Medicaid money was similarly transferred separately to the Treasury because of these efforts.

DOJ

During the year, DOJ opened 967 new criminal health care fraud investigations. Federal prosecutors filed criminal charges in 439 cases involving 720 defendants. A total of 639 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2017, DOJ opened 948 new civil health care fraud investigations and had 1,086 civil health care fraud matters pending at the end of the fiscal year. In FY 2017, the FBI investigative efforts resulted in over 674 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 148 health care fraud criminal enterprises.

OIG

In FY 2017, investigations conducted by the OIG resulted in 788 criminal actions against individuals or entities that engaged in crimes related to Medicare and Medicaid, and 818 civil actions, which include false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties (CMP) settlements, and administrative recoveries related to provider self-disclosure matters.

OIG also excluded 3,244 individuals and entities from participation in Medicare, Medicaid, and other federal health care programs. Among these were exclusions based on criminal convictions for crimes related to Medicare and Medicaid (1,281) or to other health care programs (309), for patient abuse or neglect (266), and because of licensure revocations (973).

Healthcare Fraud Prevention Partnership (HFPP)

One of the many interesting areas mentioned in the report is the Healthcare Fraud Prevention Partnership (HFPP). It’s CMS’s groundbreaking voluntary public/private partnership between the Federal Government, State agencies, law enforcement, private health insurance plans, employer organizations, and health care anti-fraud associations. The purpose of the partnership is to exchange data and information between the partners to help improve capabilities to fight fraud, waste and abuse in the healthcare industry. Since its inception in 2012, the number of participants has increased to 85 public, private and state partner organizations by the end of FY 2017. During FY 2017, the HFPP completed several studies using multiple partner data to address fraud, waste and abuse. In FY 2017, the Partnership also hosted its Annual Executive Board meeting. The meeting focused on strategies to streamline, strengthen, and grow the Partnership, including a call to action to broaden the HFPP’s impact.

Enforcement Examples:

One area of the report that usually draws attention is the summary section highlighting examples of enforcement. Here are just a few:

1. In June 2017, the owner and medical director of 4 Orlando-area clinics were sentenced to 7 years and 6 months and 5 years and 4 months in prison, respectively, and ordered to pay $9.8 million in restitution after pleading guilty to conspiracy to commit health care fraud. The owner admitted to billing Medicare more than $13 million for services that were never provided. Among other fraudulent billings, the owner billed Medicare over $7 million in claims for Sandostatin, an expensive medication used to treat side effects of intestinal tumors, and over $4.5 million in claims for Intravenous Immune Globulin, a solution made from human plasma that contains antibodies and is used to help individuals with immune deficiencies combat infection. The clinics never administered either drug. The medical director admitted to accepting money in exchange for signing medical records authorizing administration of the drugs even though they were not medically necessary and were never provided. He further admitted to signing medical records authorizing patients to receive physical therapy at the clinics, even though the clinics had no trained physical therapists on staff. The government obtained through forfeiture real property that was purchased with the fraud proceeds and valued at more than $1 million.
2. In November 2016, New York-based Zwanger & Pesiri Radiology Group, LLP, Zwanger Radiology, P.C., and one provider entered into a settlement agreement to resolve allegations that between July 2009 and February 2014 they billed Medicare and Medicaid for radiology testing performed or supervised by physicians who were not properly credentialed with Medicare and Medicaid programs, or which were performed at an unauthorized practice location. The defendants agreed to pay $8.1 million to resolve their federal and state civil FCA liability. Zwanger-Pesiri pleaded guilty to two counts of health care fraud for illegally performing and billing for procedures that had not been ordered by treating physicians and agreed to forfeit an additional $2.4 million. As part of the settlement agreement, defendants agreed to enter a 5-year CIA with the OIG.
3. In February 2017, TeamHealth Holdings, a successor in interest to IPC Healthcare Inc., f/k/a IPC The Hospitalist Inc. (IPC) agreed to pay $57.5 million to settle federal civil FCA allegations that IPC billed federal health care programs for higher and more expensive levels of medical service than were performed. The government alleged that IPC encouraged its hospitalists to bill for a higher level of service than provided. IPC’s scheme to improperly maximize billings allegedly included corporate pressure on hospitalists with lower billing levels to “catch up” to their peers. In addition to the federal recovery, TeamHealth agreed to pay approximately $3.5 million to resolve state Medicaid liability. As part of the settlement agreement, IPC agreed to enter a 5-year CIA with the OIG.

Annual reports such as this one and the Medicaid Fraud Control Units we blogged about last week (see last week’s blog here) are great reports to summarize and share with executive management and/or your governing boards. Highlighting an example or two that could pertain to areas you’re trying to strengthen in your compliance program can also be useful in raising awareness and support for compliance initiatives.