New state health care fraud recovery statistics reinforce that both the federal and state governments remain committed to health care fraud enforcement and demonstrate that their efforts are paying dividends.  Earlier this week, the Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) reported that the 50 state Medicaid fraud control units (“MFCU”) collectively recovered $2.9 billion from civil and criminal cases during fiscal year 2012 (“FY 2012”).  This represents a return on investment of $13.48 for every dollar spent by federal and state governments for MFCU operations.

The OIG’s report comes on the heels of the annual report for the Health Care Fraud and Abuse Control Program (the “Program”) released by HHS and the Department of Justice (“DOJ”) in mid-February.  As described in an earlier post, that report highlighted the Program’s “record-breaking year” in which the government recovered $4.2 billion and returned $7.90 for every health care fraud enforcement dollar spent.  However, many of the MFCU cases were joint federal and state efforts, meaning that a significant part of the reported $2.9 billion in MFCU recoveries may have already been included in the reported $4.2 billion in federal recoveries.

Fiscal Year 2012 by the Numbers

In addition to sizable financial recoveries, FY 2012 MFCU statistics reveal considerable state health care fraud enforcement activity.  The MFCUs collectively reported:

• 15,531 investigations
  • 11,660 investigations were related to Medicaid fraud
  • 3,871 investigations were related to patient abuse and neglect
• 1,359 individuals were indicted or criminally charged (995 for fraud and 364 for patient abuse and neglect)
• 1,337 convictions (982 were related to Medicaid fraud and 355 were related to patient abuse and neglect)
• 823 civil judgments and settlements

According to Mintz Levin’s Ellyn Sternfield, who is the former director of Oregon’s MFCU and former co-chair of the National Association of Medicaid Fraud Control Units’ Global Case Committee:

both the MFCU report and the recent DOJ report highlight the government emphasis on statistical results.  Some in the government do talk about trying to prevent fraud before it occurs.  But as both federal and state governments increase the resources devoted to pursuing Medicare and Medicaid fraud, there is resulting pressure to show results based solely on the numbers. 

Consequently, Sternfield explains, “matters that a few years ago may have been handled as administrative overpayments, may now be the basis for government civil or criminal health care prosecutions.”

These results highlight an unmistakable surge in health care fraud enforcement activity.