/>iOn December 6, 2024, the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) released the Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2023 (the Report).[1] The Report summarizes the focus and achievements of various governmental entities including an emphasis on identifying and prosecuting health care fraud, deterring future fraud, and protecting program beneficiaries. The Report provides insight for health care providers into the departments’ priorities concerning prosecuting health care fraud.
Key takeaways:
In fiscal year 2023, the government settled or had a judgment under the False Claims Act (FCA) that exceeded $1.8 billion. Federal agencies recovered over $3.4 billion in restitution and compensatory damages, over $462 million of which was paid to relators.
In addition:
- The DOJ opened 802 criminal health care fraud investigations and filed charges in 346 cases involving 530 defendants. At the end of the fiscal year, over 476 defendants were convicted of health care fraud-related crimes.
- The DOJ opened 770 new civil health care fraud investigations. At the end of the fiscal year, 1,147 civil health fraud matters were still pending.
- The HHS’s Office of Inspector General (HHS-OIG) investigations resulted in 651 criminal actions against individuals or entities that engaged in related Medicare and Medicaid crimes and 733 civil actions, including false claims, unjust enrichment lawsuits, and civil monetary penalty settlements.
- The HHS-OIG excluded 2,122 individuals and entities from participation in Medicare, Medicaid, and other federal health care programs because of certain criminal convictions or revocations of state health care licenses.
- The Strike Force team also filed 276 indictments, criminal information, and complaints while also obtaining 387 guilty pleas and litigating 55 jury trials.
Of the civil and criminal investigations successfully pursued, the DOJ and HHS focused on specific health care areas, including but not limited to:
- General Diagnostic and Laboratory Testing;
- Genetic Testing/ RPP Testing;
- Durable Medical Equipment (DME);
- COVID-19 Related Enforcement;
- Home Health Providers;
- Hospice Care;
- Hospitals and Health Systems;
- Managed Care;
- Nursing Homes and Facilities;
- Pharmacies, Prescription Drugs, and Opioids; and
- Telemedicine Exploitation and Fraud.
They also noted a particular focus on ownership structures of health care entities, including by private equity.[2] Of these focus areas, other entities, such as the Administration for Community Living and its Senior Medicare Patrol program, focused on COVID-19 fraud schemes, genetic testing, and hospice outreach.[3]
The Report also highlighted the Health Care Fraud Self-Disclosure Protocol maintained by HHS-OIG. Under such protocol, HHS-OIG collected $71.9 million in fiscal year 2023. Such disclosures involved allegations of violating the Civil Monetary Penalties Law related to billing, including claims not provided or supervised as claimed or involving discounts, reduced deductibles, and such.
As part of the Report, HHS-OIG also uses audits and evaluations to anticipate and respond to emerging issues. In fiscal year 2023, HHS-OIG issued 42 evaluations and 127 audit reports. These audits and evaluations included (1) minimizing risk to people served, focusing on improvements for nursing homes and home health agencies, and (2) safeguarding programs from improper payments and fraud with a particular focus on managed care, laboratories, telehealth, and pharmacies.
Notably, data analytics and other artificial intelligence (AI) tools usage were a focus of the Report. The Criminal Division Fraud Section’s Health Care Fraud Unit is a “leader in using advanced data analytics and algorithmic methods to identify newly emerging health care fraud schemes and to target the most egregious fraudsters.” Specifically, AI data analytics usage was a key component for identifying aberrant billing levels and targeting suspicious billing patterns.[4] Additionally, it was noted that the program funding supports the HHS-OIG Chief Data Office to provide OIG with data and analytics. Specifically, the Chief Data Office expanded its toolkit with customized analytics with AI and machine learning (ML) to:
- Proactively monitor and target agency oversight of high-risk HHS programs and health care providers;
- Identify trends, outliers, and potential investigative and audit targets;
- Enhance decision-making;
- Optimize HHS-OIG operational processes; and
- Support mission-critical work.[5]
The Report noted that it uses “predictive and geospatial analytics, customized dashboards, AI and ML capabilities including neural networks and text mining to identify and support prosecutions of sophisticated fraud schemes.”[6] Notably, the increased reliance on AI and ML was used to inform “10 audits and [five] evaluations related to pandemic oversight” during the 2023 fiscal year and “identified more than $580 million in improper payments for services that did not comply with Medicare requirements as well as questionable billings for COVID-19 testing, other add-on tests, and improper billing for patients with health insurance by pandemic relief programs.”[7]
CMS was also active in its audits and investigations, which were carried out in part by Unified Program Integrity Contractors (UPICs) and through, but not limited to, coordinated program integrity activities. The Report notes that there “has been a marked increase in the number and quality of law enforcement referrals from CMS.”[8] In fiscal year 2023, CMS reviewed 1,106 cases and law enforcement partners made 538 requests for CMS to review cases.[9] One such notable example is the coordinated criminal charges against 18 individuals for alleged participation in exploiting the COVID-19 pandemic including shipping unsolicited COVID-19 OTC kits and CMS announcing administrative actions against 28 medical providers for their alleged involvement.[10] CMS also conducted program audits of Parts C and D plan sponsors and PACE organizations and noted several activities including oversight and educational activities.
The Report also highlighted cooperation with the Healthcare Fraud Prevention Partnership (HFPP). The HFPP has “300 partner organizations, comprised of 6 federal agencies, 80 law enforcement agencies, 15 associations, 136 private payers, and 63 state and local partners, including 50 state Medicaid Agencies.”[11] With the work of HFPP, the various partners submitted over 334 billion professional claim lines for review to conduct cross-payer analysis with a particular focus on:
- COVID-19 add-on laboratory testing;
- Excessive telehealth billing;
- Applied behavioral analysis therapy;
- Genetic testing;
- Outlier billing for members with substance use disorder; and
- Evaluation and management (E/M) improbable days.
The Office of General Counsel’s (OGC) efforts were also highlighted in the Report. OGC noted a particular focus on FCA actions, including specific issues related to Stark law violations, medical necessity, failure to report discounted prescription drug prices, misrepresentations under electronic health record incentive programs, billing for substandard services in nursing homes, kickbacks, and other problematic marketing practices.[12] The OGC also highlighted its work in denial of claims and payments, upholding exclusionary authority, and protecting funds in bankruptcy litigation.[13]
As government agencies strengthen their efforts to combat health care fraud and abuse and continue to use the FCA as one of their primary enforcement tools, it remains critical for health care providers to evaluate compliance programs and auditing functions. The prevalence and increased reliance by the government on AI is a signal to providers of an increased focus on billing requirements adherence.
ENDNOTES
1. U.S. Department of Justice and U.S. Department of Health and Human Services, Annual Report of the Departments of Health and Human Services and Justice Health Care Fraud and Abuse Control Program FY 2023, available at https://oig.hhs.gov/documents/hcfac/10087/HHS%20OIG%20FY%202023%20HCFAC.pdf
2. Id. at 103.
3. Id. at p. 91.
4. Id. at p. 12.
5. Id. at p. 67.
6. Id. at p. 67.
7. Id. at 67.
8. Id. at 70.
9. Id. at 71.
10. Id. at 71.
11. Id. at 87.
12. Id. at 93.
13. Id. at 95-96.
