HCFAC Releases FY 2015 Health Care Fraud Enforcement Results – Community Mental Health, Electronic Health Records And Quality Of Care Highlighted

On February 26, the National Health Care Fraud and Abuse Control Program (HCFAC) released its fiscal year (FY) 2015 statistics regarding enforcement actions and recoveries for federal health care programs.  According to the report, during FY 15 the federal government won or negotiated over $1.9 billion in health care fraud judgments and settlements, and additional administrative impositions.  These actions resulted in the return of approximately $2.4 billion to the federal government or to private persons.  The Medicare Trust Funds received the lion’s share ($1.6 billion), while $135.9 million in federal Medicaid money was transferred separately to the U.S. Treasury.
 
The FY 15 report provides highlights of criminal and civil investigations across a wide range of health care matters, including many of these categories covered in the FY 14 Report:

  • Ambulance and transportation services;
  • Clinics;
  • Device companies;
  • Drug companies;
  • Durable medical equipment;
  • Health maintenance organizations;
  • Home health providers;
  • Hospice care;
  • Hospitals and health systems;
  • Identity theft;
  • Nursing homes and facilities;
  • Pharmacies;
  • Physician practice;
  • Prescription drugs;
  • Psychiatric and psychological testing services. 

Five (5) categories highlighted in this year’s report were not covered in the FY 14 report.  To the extent the inclusion of the categories in the FY 15 report may indicate a trend, they are identified as follows:

  • Community Mental Health Centers:  Each of the three cases highlighted in this category involved convictions of individuals who participated in fraudulent billing for psychiatric services as being conducted as part of a partial hospitalization program (PHP).  In each of the cases, the individuals were involved to one degree or another in the funneling of patients into programs where Medicare was billed for PHP services in instances where the patients did not need, qualify for or receive PHP treatment.
  • Electronic Health Records:  The CFO of a medical center in Texas was sentenced to 23 months in prison after pleading guilty to having provided a false attestation that the hospital’s electronic health record (EHR) platform met “meaningful use” requirements in order to qualify for incentive payments under Medicare’s EHR incentive program.  The evidence demonstrated that the hospital used the EHR system sparingly and did not meet the criteria for CMS incentive payments, which in FY 12 totaled $785,655.
  • Laboratories:  Both of the highlighted laboratory cases involved kickback schemes for referrals.  In the first case, three physicians were sentenced after pleading guilty to charges relating to a test-referral kickback scheme.  In the other featured case, two laboratories resolved civil FCA allegations that they paid physicians kickbacks in exchange for patient referrals, and billed federal health care programs for medically unnecessary testing.
  • Patient Harm:  In one highlighted case, a New York cardiologist was sentenced to three years in prison and ordered to pay $2 million in restitution after pleading guilty to a charge of health care fraud, for having offered patients narcotic prescriptions in exchange for those patients undergoing unnecessary diagnostic tests and other medical procedures.  In the second case, a Detroit area hematologist-oncologist was sentenced to 45 years’ imprisonment and ordered to forfeit $17.6 million for health care fraud, money laundering and a kickback scheme.  In that case, the government demonstrated that the physician had administered medically unnecessary infusions and injections to 553 patients, including medically unnecessary chemotherapy, cancer treatments, and other infusion and injection therapies.
  • Quality of Care: Several California nursing and health care services companies entered into separate settlement agreements worth a combined $3.8 million to resolve allegations of false claims for materially substandard or worthless services.  The companies were alleged to have overmedicated elderly and vulnerable residents of their facilities, causing, among other things, infection, malnutrition, dehydration, fractures, pressure ulcers, and for some beneficiaries, premature death.

The results discussed in the FY 15 report demonstrate a continued trend of increased enforcement action and recoveries over the past six (6) years.  Specifically, of the $29.4 billion returned by the HCFAC since the inception of the Program in 1997, over $16.2 billion was returned between 2009 and 2015.  While the overall trend of increased enforcement continues, the report demonstrates that the major enforcement indices remained relatively flat or represented a slight reduction from the numbers reported by HCFAC for FY 14:

                        ResultFY 15FY 14
Total health Care Fraud Judgments or Settlements$1.9 B$2.3 B
Amount returned to the Federal Government$2.4 B$3.3 B
New Criminal Health Care Fraud Investigations Opened by DOJ983924
New Civil Health Care Fraud Investigations Opened by DOJ808782
Cases of Criminal Charges Filed463496
Health Care Fraud-Related Convictions613734
Individuals Excluded from Program Participation by HHS-OIG4,1124,017
Number of DOJ Civil Health Care Fraud Matters Pending at end of FY1,048957


The HCFAC annual report provides a significant amount of detailed data and further examples of enforcement actions.  The link to the full report can be found here.