Medicare Fraud Essay Assignment.

Methods of Fraud
Medicare Part D, which provides prescription drug benefits, has been specifically targeted for fraudulent
activity. This activity has resulted from actions of patients as well as physicians and in the form of kickbacks from pharmaceutical companies (Maruca, 2006). Regrettably, the Centers for Medicare and Medicaid Services (CMS) have
not created a dependable system for expense authentication (Toothman, Moore and Lee, 2011). In the event a patient has exhausted coverage limits for prescription medications, healthcare providers have been known to write prescriptions for the patient’s spouse or family member who has not met coverage maximums or altered medical diagnoses in order to ensure prescription coverage under insurance plans (Maruca, 2006).
Kickbacks are another type of fraud that has prompted legislatures to enact numerous laws, such as the AntiKickback Statute and the Physicians Self-Referral Law or “Stark Law” (OIG, 2016). Medicare Fraud Essay Assignment.Although kickbacks have been an acceptable practice by other industries, it is illegal to receive or provide rewards of any type for referrals in federal healthcare programs (OIG, 2016). Physicians, other healthcare providers, medical suppliers, pharmaceutical companies, and even patients have been involved in these types of scams (Phillips and Cohen LLP, 2016). Medicare Fraud Essay Assignment.Specific examples of kickbacks have included physicians receiving payments for referring patients to specific dialysis centers,
medical companies providing grants or free medical equipment to physicians that utilize their products, and
pharmaceutical companies providing incentives or hosting seminars at luxurious resorts for physicians that agree to prescribe their drugs (Phillips & Cohen LLP, 2016).
A third type of fraud is up coding, or provider billing for a more complex service or procedure than was
actually rendered, and/or diagnosing the patient with a costlier condition than was present (CMS, 2015b). An analysis of data collected between 2001 and 2010 by the Department of Health and Human Services (DHHS) and the Office of Inspector General (OIG) revealed, due to up coding for evaluation and management visits, Medicare payments increased by 48% or approximately $10.8 billion (Levinson, 2012). A 2013 report released by CMS concluded $965
million was improperly dispersed for established patient visits in 2012 as a result of inaccurate billing practices (CMS, 2013). Since the requirement for electronic health records (EHR) and electronic medical billing practice, the incidence
of up coding has become more prevalent (FORE, 2005). Reasons for this trend have been attributed to the overall structure of the EHR which has allowed physicians to simply point and click boxes that satisfy coding-complexity requirements (Pitts, 2012). A specific feature of EHR that has been potentially linked to the increase in up coding has included the ability to select templates created to ensure billing is at the highest possible level (Pitts, 2012). Medicare Fraud Essay Assignment.

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Healthcare fraud may also be classified as organized crime (Morris, 2009). This type of fraud often involved
either the stealing of patient lists from health care providers’ offices or healthcare identity theft. Healthcare identity
fraud has been defined as the theft of an insured individual’s identity by an uninsured person, with the intent to use the personal information to receive medical services at little to no cost (Thornton et al., 2015). In contrast, when patient
records have been stolen from a healthcare facility, the information has been typically sold to others for profit. The purchasers of this information have then proceeded to submit false claims to insurance companies in order to receive
payment (Morris, 2009).Methods of Fraud
Medicare Part D, which provides prescription drug benefits, has been specifically targeted for fraudulent
activity. This activity has resulted from actions of patients as well as physicians and in the form of kickbacks from
pharmaceutical companies (Maruca, 2006). Regrettably, the Centers for Medicare and Medicaid Services (CMS) have
not created a dependable system for expense authentication (Toothman, Moore and Lee, 2011). In the event a patient
has exhausted coverage limits for prescription medications, healthcare providers have been known to write
prescriptions for the patient’s spouse or family member who has not met coverage maximums or altered medical
diagnoses in order to ensure prescription coverage under insurance plans (Maruca, 2006).
Kickbacks are another type of fraud that has prompted legislatures to enact numerous laws, such as the AntiKickback Statute and the Physicians Self-Referral Law or “Stark Law” (OIG, 2016). Although kickbacks have been
an acceptable practice by other industries, it is illegal to receive or provide rewards of any type for referrals in federal
healthcare programs (OIG, 2016). Physicians, other healthcare providers, medical suppliers, pharmaceutical
companies, and even patients have been involved in these types of scams (Phillips and Cohen LLP, 2016). Specific
examples of kickbacks have included physicians receiving payments for referring patients to specific dialysis centers,
medical companies providing grants or free medical equipment to physicians that utilize their products, and
pharmaceutical companies providing incentives or hosting seminars at luxurious resorts for physicians that agree to
prescribe their drugs (Phillips & Cohen LLP, 2016). Medicare Fraud Essay Assignment.
A third type of fraud is up coding, or provider billing for a more complex service or procedure than was
actually rendered, and/or diagnosing the patient with a costlier condition than was present (CMS, 2015b). An analysis
of data collected between 2001 and 2010 by the Department of Health and Human Services (DHHS) and the Office
of Inspector General (OIG) revealed, due to up coding for evaluation and management visits, Medicare payments
Business and Health Administration Association Annual Conference 2017 Page 19
increased by 48% or approximately $10.8 billion (Levinson, 2012). A 2013 report released by CMS concluded $965
million was improperly dispersed for established patient visits in 2012 as a result of inaccurate billing practices (CMS,
2013). Since the requirement for electronic health records (EHR) and electronic medical billing practice, the incidence
of up coding has become more prevalent (FORE, 2005). Reasons for this trend have been attributed to the overall
structure of the EHR which has allowed physicians to simply point and click boxes that satisfy coding-complexity
requirements (Pitts, 2012). A specific feature of EHR that has been potentially linked to the increase in up coding has
included the ability to select templates created to ensure billing is at the highest possible level (Pitts, 2012).
Healthcare fraud may also be classified as organized crime (Morris, 2009). This type of fraud often involved
either the stealing of patient lists from health care providers’ offices or healthcare identity theft. Healthcare identity
fraud has been defined as the theft of an insured individual’s identity by an uninsured person, with the intent to use
the personal information to receive medical services at little to no cost (Thornton et al., 2015). In contrast, when patient
records have been stolen from a healthcare facility, the information has been typically sold to others for profit. The
purchasers of this information have then proceeded to submit false claims to insurance companies in order to receive
payment (Morris, 2009).
The purpose of this study was to identify methods of Medicare fraud, examine the various programs created
by the U.S. government to combat fraud and abuse, and determine the effectiveness of these programs.
METHODOLOGY
The primary hypothesis of this study was: The U.S. government and citizens are not efficiently and
effectively utilizing available resources to prevent and combat Medicare fraud, waste, and abuse.
The methodology for this study was a literature review. Electronic databases Ebscohost, Health Source:
Nursing/Academic Edition, LexisNexis, ProQuest, and PubMed provided by Marshall University’s online library were
employed as well as Google Scholar. Google search engine was employed when articles could not be located through
the previously mention databases. Other respectable websites used were The U.S. Department of Health and Human
Services (DHHS), Centers for Medicare and Medicaid Services (CMS), U.S. Government Accountability Office
(GAO), Office of Inspector General (OIG) and U.S. Department of Justice (DOJ). Key words utilized for literature
retrieval included “Medicare fraud” or “abuse” and “Integrated Data Repository” or “up coding” or “predictive
modeling” or “whistleblower” or “fraud task force” or “organized crime” or “physician kickbacks” or “Affordable
Care Act”. Research discovery was limited to works published between 2003 and 2016. A total of 43 articles and
websites were reviewed in the English language. Primary and secondary data was integrated from scholarly articles
and reputable government publications. The search was completed by JM, LS, CT, and KV with validation by AC
who also acted as a second reader and verified literature met inclusion criteria. Medicare Fraud Essay Assignment.
RESULTS
Legislation Against Medicare Fraud
The Affordable Care Act (ACA) has implemented additional funds to help eliminate fraud associated with
Medicare and Medicaid fraud (Chang, 2013). The focus has been moved from a “pay-and-chase” model to prevention
(Ruggio, Hurd and McIntee, 2013). Changes that have been initiated by the ACA include creating rigorous screening
processes for Medicare and Medicaid providers, authorizing payment termination in cases of suspected fraud,
increasing allocation of funds for the prevention and fighting of fraud, stricter penalties for health care fraud offenders,
and incorporating new data sharing technologies (CMS, 2011a). In an effort to achieve these changes, a total of $350
million has been allotted between 2011 and 2020 to aid in the fight against Medicare fraud and criminal sentencing
guidelines for healthcare fraud related crimes have been increased by 20%-50% for crimes that have involved
monetary losses greater than $1 million (DHHS, 2016a).
The ability to identify all Medicare claims containing up coding or fraudulent billing has been difficult
considering Medicare processes over 1 billion fee-for-service claims annually, only about 2% of which have been
audited each year (CMS, 2014b). Considering the vast quantity of claims, whistleblowers have become an important tool in fraud detection by informing the government of witnessed Medicare fraud (Barger, 2016). Medicare Fraud Essay Assignment.The False Claims
Business and Health Administration Association Annual Conference 2017 Page 20
Act (FCA) contained a provision known as qui tam which allowed whistleblowers to act on the government’s behalf
in relation to fraudulent claims, and collect a financial reward if the case proves successful (Stumphauzer, 2013). One
of the largest profiting whistleblower cases in U.S. history involved Hospital Corporation of America (HCA) which
faced a whistleblower lawsuit under the FCA (DOJ, 2003). HCA was forced to pay a total of $1.7 billion between
2000 and 2003 for fraudulent claims filed against Medicare. The whistleblowers received more than $151 million of
the settlement (DOJ, 2003). In the 2015 Fiscal Year, the Department of Justice recovered $1.9 billion came from
companies and individuals in the health care industry for allegedly providing unnecessary or inadequate care, paying
kickbacks to health care providers to induce the use of certain goods and services, or overcharging for goods and
services paid for by Medicare, Medicaid, and other federal health care programs; since 2009, the department has
recovered nearly $16.5 billion in health care fraud (DOJ, 2005).
Governmental Task Forces Utilization
An important method that has been used to combat healthcare fraud has involved employment of an effective
strategy that encompasses fraud prevention and detection as well as identification of waste and abuse (Byrd, Powell
and Smith, 2013). The U.S. has formed federal committees and organizations in an effort to decrease and ultimately
eliminate Medicare fraud (Byrd et al, 2013).
One federal program formed to combat Medicare fraud was the National Health Care Anti-Fraud Association
(NHCAA). The purpose of the organization was to provide essential computer analysis programs designed to detect
fraud and abuse in the healthcare system (Byrd, Powell and Smith, 2013). Lou Saccoccio, executive director of the
NHCAA, recommended that government programs should be motivated to protect themselves by ensuring thorough
background checks on new providers, engaging in anti-fraud information sharing, and holding provider payments in
the event that fraud was suspected (Jones and Jing, 2011).
In 2009, a task force titled Health Care Fraud Prevention and Enforcement Action Team (HEAT) was
established. HEAT is a joint effort by the Department of Health and Human Resources (HHS) and Department of
Justice (DOJ) with the goals of decreasing healthcare costs by identifying and preventing Medicare fraud, emphasizing
the practices of providers so as to eliminate waste, and strengthening relationships with other state and federal fraud
prevention agencies; it charged more than 1,400 defendants who have falsely billed Medicare more than $4.1 billion
in 2011 (DHHS, 2014a). Medicare Fraud Essay Assignment.
Information Technology and Data Sharing used Against Medicare Fraud
Fraudulent insurance claims have been problematic in both the public and private health arenas (DOJ, 2012).
In September 2006, CMS launched the Integrated Data Repository (IDR) in an effort to heighten detection of waste,
fraud, and abuse (GAO, 2011). The report indicated, at the time of launch, the project was anticipated to provide $21
billion in financial benefits by utilizing information technology to compile and examine data related to improper
claims reimbursement. Officials planned to have all necessary and required data assimilated into the system by Fiscal
Year (FY) 2010 (GAO, 2011). However, as of 2012, critical pieces of data had not been uploaded into the IDR
(Budetti, 2012). In conjunction with the IDR, CMS developed One Program Integrity (One PI), a system application
that provided contractors, data analysts, and law enforcement with access to the repository for further investigation of
information (CMS, 2011b). The relationship between these components is depicted in Figure 1. Implementation of
these programs has allowed for visualization of real-time claim submissions, access to records, and tracking of
payment history (GAO, 2011).

Health Plans Beneficiaries Medicare Providers Drug Codes
Integrated Data Repository
One PI Portal
CMS Analysts Contractors Law Enforcement
Source: Government Accountability Office, 2011
In 2012, to combat all categories of insurance fraud, the Obama administration created the Healthcare Fraud
Prevention Partnership (HFPP). This partnership was composed of several federal government offices, state
government organizations, private insurance companies, and professional organizations (DOJ, 2012). HFPP has allowed data to be shared between both private and public insurance sectors that have been used to identify unknown
fraudulent schemes and possible prevention strategies (CMS, 2016a).
Predictive modeling is a relatively new technology, however it has been successfully implemented in various
financial fields for fraud prevention and by insurance carriers to determine reimbursements and future premiums
(White, 2011). Due to the success of the technology, Medicare has incorporated this technological advancement into
claims processing as a tool for fraud prevention (Parente et al., 2012). Predictive modeling has used advanced methods
to evaluate claims by assigning a score based on sets of characteristics frequently associated with inappropriate claims
and fraud, and high scoring claims are then manually evaluated for validity (Lewin Group, 2009).
Since the July 20, 2016 release of CMS’s Annual Report to Congress on the Medicare and Medicaid Integrity
Programs, it has become apparent that great strides have been made to improve information technology and data
sharing related to fraud prevention, detection, and abuse. The report estimated that program integrity strategies and
activities had saved Medicare $21.1 billion in FY 2013 and $18.1 billion in FY 2014. These figures had also indicated
a 2-year return on investment of $12.4 to 1 (CMS, 2016b). The information has been further categorized by type of
savings, as displayed in Table 1.
Table 1: Medicare Saving by Program Integrity
Type of Medicare Savings FY 2013
Savings in
millions
FY 2014
Savings in
millions
Prevention Savings (Estimated)
Prepayment Review $ 12,913.5 $ 11,859.7
Provider Enrollment $ 701.3 $ 700.7
Suspensions $ 43.2 $ 52.2
Systematic Edits $ 738.9 $ 744.7
Total Estimated Prevention Savings $ 14,396.9 $ 13,357.3
Post Payment Recovery Savings (Estimated)
Law Enforcement Referrals $ 129.3 $ 102.7
Recovery Auditors $ 3,654.9 $ 2,455.2
Reviews and Audits $ 2,881.9 $ 2,207.1
Total Estimated Post Payment Recovery Savings $ 6,666.1 $ 4,765.0
Total Estimated Medicare Savings $ 21,063.0 $ 18,122.3
Source: Centers for Medicare and Medicaid Services, 2016

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DISCUSSION
Legislation Against Medicare Fraud
The ACA had strengthened federal efforts to eliminate healthcare waste, abuse, and fraud by granting greater
authority to regulatory organizations in regards to their fraud combatting endeavors (Iglehart, 2010). In 2011, a total
of 1,430 individuals were charged with healthcare fraud, a 75% increase from 2008 (Hill et al., 2014). During Fiscal
Year (FY) 2011, the DOJ, CMS, and OIG’s combined efforts led to 977 new investigations of civil health care fraud,
743 criminal convictions and the largest monetary recovery in a single year totaling $4.1 billion. In addition, future
fraudulent acts against Medicare have been eliminated by revoking the billing privileges of 4,850 Medicare suppliers
and providers (Goldman, 2012). This has produced a promising outlook on the ACA’s influence on Medicare fraud
prevention, however still is a long term project as in 2014 it was estimated by the GAO $60 billion in fraudulent
Medicare payments from just of this fiscal year alone (GAO, 2015b). Medicare Fraud Essay Assignment.
Changes the government has made to the FCA to protect whistleblowers has encouraged more individuals to
report fraud. This has been evidenced by the increase in whistleblower cases from 300-400 cases between 2000 and
2009 to more than 700 cases during 2014 (DOJ, 2014). Nearly 86% of the $3.5 billion recovered by the DOJ in FY
2015 was attributed to cases filed under the qui tam provision of the FCA (DOJ, 2015). The total amount paid by the
government to whistleblowers who had risked their careers in these lawsuits, totaled $597 million in FY 2015 (DOJ,
2015). Although whistleblowers may fear retaliation in the form of loss of job and/or professional reputation
Business and Health Administration Association Annual Conference 2017 Page 23
(Lachman, 2008), these potentially large financial incentives should help to provide encouragement for others to report
witnessed fraud.
Information Technology and Data Sharing used Against Medicare Fraud
The specific task forces mentioned were just a few of many different committees and organizations that have
been developed to help identify fraud and recover monetary losses. In order to determine the effectiveness of these
task forces, tools and strategies have been evaluated to reveal strengths and weaknesses, as well as areas in need of
improvement. According to the DOJ (2016), HEAT has recovered a total of more than $8.9 billion in false claims,
and has charged more than 2,900 individuals. On June 22, 2016, it was announced that the Medicare Fraud Strike
Force, a subsection of HEAT, had discovered the largest Medicare fraud operation in history (DOJ, 2016). This
encounter led to a total of 301 individuals arrested and charged for approximately $900 million in fraudulent billing.
These results, compared to the $1.9 billion that was recovered between 2009 and 2011, demonstrate that HEAT ha s
been improving its performance and effectiveness. Medicare Fraud Essay Assignment.
An important aspect to consider when searching for solutions to increase productivity of current Medicare
fraud task forces has been to exam the amount of federal funding allocated to accomplish this mission. In 2008, the
government invested $1.13 billion in an effort to combat fraud (Iglehart, 2009). After dividing this budget between
agencies including Medicare, Medicaid, and other private health insurance providers, it has been estimated that
Medicare was able to dedicate less than 0.2% of its total budget to fraud prevention and detection. In 2015, the
Congress appropriated about $864 millions in the Medicare Integrity Program for Medicare and Medicare Fraud
detection. This has been quite a good investment it has been “won or negotiated” in FY 2015 about $1.9 billion in
anti-fraud efforts. (DHHS/DOJ, 2016). In addition to increasing financial support, these programs could have also
increased data sharing efforts. By collaborating with other anti-fraud organizations, the limited funding could have
been better managed to increase productivity.
As of February 2016, eight studies have been conducted by the HFPP that have included data provided from
all involved partners. After CMS analyzed the article titled “Misused Codes and Fraud Schemes” incorporated the
findings of this literature to improve fraudulent payment detection methods, $187.7 million in savings had been
reported to the Medicare Trust Fund “This partnership has continued to add partners from both private and public
healthcare sectors and has planned to continue this trend (DHHS/DOJ, 2016) (HFPP Board, 2013). Although savings
reports from the other studies have not been published, based on the reported savings from the first HFPP study, it c an
be concluded that this program has been successful. Since its creation in 2012, this partnership has captured nearly
half of the $350 million originally allotted by the ACA for fraud prevention (DHHS/DOJ, 2016b). By continuing to
add partners to this program, it can be assumed additional amounts of data will be provided that could be utilized in
combatting fraud and recovering losses.
A 2011 study by the U.S Government Accountability Office reported the lack of ongoing assessment in
relation to goal progression of the IDR and One PI was disheartening. Continual evaluation of objective progress
should be paramount with a project of such magnitude. It was not until one year after the IDR and One PI
implementation deadline of 2010 that the government acknowledged the program’s failure to meet initially established
goals (GAO, 2011). The inattention to continuing program appraisal was abysmal considering the initial investment
of $832 million for fraud detection efforts (GAO, 2006). Fortunately, as a result of this report and findings of several
other federal hearings, significant changes to the program were proposed in an effort to correct inefficiencies.
CONCLUSION
Within the past seven years, the U.S. government and citizens have been working more effi ciently to combat
Medicare waste, fraud, and abuse. Although the breadth of fraudulent activity remains unknown, the success of current
strategies has undoubtedly provided the crucial first steps necessary to further fraud prevention, detection, and
monetary recovery. Further increase in national healthcare spending is foreseeable if Medicare fraud is not effectively
controlled. Medicare Fraud Essay Assignment.
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Phillips & Cohen LLP (2016), “Healthcare Anti-Kickback Laws and Whistleblowers.” Retrieved July 27, 2016 from
http://www.phillipsandcohen.com/Health-Care-Fraud/ Kickbacks.shtml.
Pitts, S. R. (2012), “Higher-complexity ED Billing Codes—Sicker Patients, More Intensive Practice, or Improper
Payments?” New England Journal of Medicine, 367 (26), 2465-2467.
Ruggio, M., Hurd, P. J., & McIntee, S. R. (2013), “Summary of Anti-Fraud Provisions in the Affordable Care Act,”
LeClairRyan, retrieved August 10, 2016 from https://www.leclairryan.com/files/Uploads/ Documents/ACA%20AntiFraud%20Provisions%20slide%20deck%2008%2021%2013%20final.pdf.
Stumphauzer, R. K. (2013), “Healthcare Fraud Enforcement Trends and the Impact on Electrodiagnostic Medicine,”
EDX And NM Medicine: Looking to the Future As We Address Today’s Challenges, 19-22. Retreived July 25, 2016
from https://webportal.aanem.org/ Resources/Files/Downloads/products/13PL.pdf#page=19.
Thornton, D., Brinkhuis, M., Amrit, C., Aly, R. (2015), “Categorizing and Describing the Types of Fraud in
Healthcare,” Procedia Computer Science, 64 (2015), 713-720.
Toothman, M, Moore, K, & Lee, D (2011). “Unraveling Medicare and Medicaid Prescription Drug Fraud and Abuse,”
Compensation & Benefits Review, 43 (6), 339-345.
White, S.E. (2011), “Predictive Modeling 101: How CMS’s Newest Fraud Prevention Tool Works and What It Means
for Providers,” Journal of AHIMA, 82 (9), 46-47.
The purpose of this study was to identify methods of Medicare fraud, examine the various programs created
by the U.S. government to combat fraud and abuse, and determine the effectiveness of these programs. Medicare Fraud Essay Assignment.
METHODOLOGY
The primary hypothesis of this study was: The U.S. government and citizens are not efficiently and
effectively utilizing available resources to prevent and combat Medicare fraud, waste, and abuse.
The methodology for this study was a literature review. Electronic databases Ebscohost, Health Source:
Nursing/Academic Edition, LexisNexis, ProQuest, and PubMed provided by Marshall University’s online library were
employed as well as Google Scholar. Google search engine was employed when articles could not be located through
the previously mention databases. Other respectable websites used were The U.S. Department of Health and Human
Services (DHHS), Centers for Medicare and Medicaid Services (CMS), U.S. Government Accountability Office
(GAO), Office of Inspector General (OIG) and U.S. Department of Justice (DOJ). Key words utilized for literature
retrieval included “Medicare fraud” or “abuse” and “Integrated Data Repository” or “up coding” or “predictive
modeling” or “whistleblower” or “fraud task force” or “organized crime” or “physician kickbacks” or “Affordable
Care Act”. Research discovery was limited to works published between 2003 and 2016. A total of 43 articles and
websites were reviewed in the English language. Primary and secondary data was integrated from scholarly articles
and reputable government publications. The search was completed by JM, LS, CT, and KV with validation by AC
who also acted as a second reader and verified literature met inclusion criteria.
RESULTS
Legislation Against Medicare Fraud
The Affordable Care Act (ACA) has implemented additional funds to help eliminate fraud associated with
Medicare and Medicaid fraud (Chang, 2013). The focus has been moved from a “pay-and-chase” model to prevention
(Ruggio, Hurd and McIntee, 2013). Changes that have been initiated by the ACA include creating rigorous screening
processes for Medicare and Medicaid providers, authorizing payment termination in cases of suspected fraud,
increasing allocation of funds for the prevention and fighting of fraud, stricter penalties for health care fraud offenders,
and incorporating new data sharing technologies (CMS, 2011a). In an effort to achieve these changes, a total of $350
million has been allotted between 2011 and 2020 to aid in the fight against Medicare fraud and criminal sentencing
guidelines for healthcare fraud related crimes have been increased by 20%-50% for crimes that have involved
monetary losses greater than $1 million (DHHS, 2016a).
The ability to identify all Medicare claims containing up coding or fraudulent billing has been difficult
considering Medicare processes over 1 billion fee-for-service claims annually, only about 2% of which have been
audited each year (CMS, 2014b). Considering the vast quantity of claims, whistleblowers have become an important
tool in fraud detection by informing the government of witnessed Medicare fraud (Barger, 2016). The False Claims
Business and Health Administration Association Annual Conference 2017 Page 20
Act (FCA) contained a provision known as qui tam which allowed whistleblowers to act on the government’s behalf
in relation to fraudulent claims, and collect a financial reward if the case proves successful (Stumphauzer, 2013). Medicare Fraud Essay Assignment.One
of the largest profiting whistleblower cases in U.S. history involved Hospital Corporation of America (HCA) which
faced a whistleblower lawsuit under the FCA (DOJ, 2003). HCA was forced to pay a total of $1.7 billion between
2000 and 2003 for fraudulent claims filed against Medicare. The whistleblowers received more than $151 million of
the settlement (DOJ, 2003). In the 2015 Fiscal Year, the Department of Justice recovered $1.9 billion came from
companies and individuals in the health care industry for allegedly providing unnecessary or inadequate care, paying
kickbacks to health care providers to induce the use of certain goods and services, or overcharging for goods and
services paid for by Medicare, Medicaid, and other federal health care programs; since 2009, the department has
recovered nearly $16.5 billion in health care fraud (DOJ, 2005).
Governmental Task Forces Utilization
An important method that has been used to combat healthcare fraud has involved employment of an effective
strategy that encompasses fraud prevention and detection as well as identification of waste and abuse (Byrd, Powell
and Smith, 2013). The U.S. has formed federal committees and organizations in an effort to decrease and ultimately
eliminate Medicare fraud (Byrd et al, 2013).
One federal program formed to combat Medicare fraud was the National Health Care Anti-Fraud Association
(NHCAA). The purpose of the organization was to provide essential computer analysis programs designed to detect
fraud and abuse in the healthcare system (Byrd, Powell and Smith, 2013). Lou Saccoccio, executive director of the
NHCAA, recommended that government programs should be motivated to protect themselves by ensuring thorough
background checks on new providers, engaging in anti-fraud information sharing, and holding provider payments in
the event that fraud was suspected (Jones and Jing, 2011).
In 2009, a task force titled Health Care Fraud Prevention and Enforcement Action Team (HEAT) was
established. HEAT is a joint effort by the Department of Health and Human Resources (HHS) and Department of
Justice (DOJ) with the goals of decreasing healthcare costs by identifying and preventing Medicare fraud, emphasizing
the practices of providers so as to eliminate waste, and strengthening relationships with other state and federal fraud
prevention agencies; it charged more than 1,400 defendants who have falsely billed Medicare more than $4.1 billion
in 2011 (DHHS, 2014a).
Information Technology and Data Sharing used Against Medicare Fraud
Fraudulent insurance claims have been problematic in both the public and private health arenas (DOJ, 2012).
In September 2006, CMS launched the Integrated Data Repository (IDR) in an effort to heighten detection of waste,
fraud, and abuse (GAO, 2011). The report indicated, at the time of launch, the project was anticipated to provide $21
billion in financial benefits by utilizing information technology to compile and examine data related to improper
claims reimbursement. Officials planned to have all necessary and required data assimilated into the system by Fiscal
Year (FY) 2010 (GAO, 2011). However, as of 2012, critical pieces of data had not been uploaded into the IDR
(Budetti, 2012). In conjunction with the IDR, CMS developed One Program Integrity (One PI), a system application
that provided contractors, data analysts, and law enforcement with access to the repository for further investigation of
information (CMS, 2011b). The relationship between these components is depicted in Figure 1. Implementation of
these programs has allowed for visualization of real-time claim submissions, access to records, and tracking of
payment history (GAO, 2011).
Business and Health Administration Association Annual Conference 2017 Page 21
Figure 1: Interaction within the IDR and One PI Environment
Health Plans Beneficiaries Medicare Providers Drug Codes
Integrated Data Repository
One PI Portal
CMS Analysts Contractors Law Enforcement
Source: Government Accountability Office, 2011
In 2012, to combat all categories of insurance fraud, the Obama administration created the Healthcare Fraud
Prevention Partnership (HFPP). This partnership was composed of several federal government offices, state
government organizations, private insurance companies, and professional organizations (DOJ, 2012). HFPP has
allowed data to be shared between both private and public insurance sectors that have been used to identify unknown
fraudulent schemes and possible prevention strategies (CMS, 2016a).
Predictive modeling is a relatively new technology, however it has been successfully implemented in various
financial fields for fraud prevention and by insurance carriers to determine reimbursements and future premiums
(White, 2011). Due to the success of the technology, Medicare has incorporated this technological advancement into
claims processing as a tool for fraud prevention (Parente et al., 2012). Predictive modeling has used advanced methods
to evaluate claims by assigning a score based on sets of characteristics frequently associated with inappropriate claims
and fraud, and high scoring claims are then manually evaluated for validity (Lewin Group, 2009).
Since the July 20, 2016 release of CMS’s Annual Report to Congress on the Medicare and Medicaid Integrity
Programs, it has become apparent that great strides have been made to improve information technology and data
sharing related to fraud prevention, detection, and abuse. The report estimated that program integrity strategies and
Business and Health Administration Association Annual Conference 2017 Page 22
activities had saved Medicare $21.1 billion in FY 2013 and $18.1 billion in FY 2014. Medicare Fraud Essay Assignment.These figures had also indicated a 2-year return on investment of $12.4 to 1 (CMS, 2016b). The information has been further categorized by type of
savings, as displayed in Table 1.
Table 1: Medicare Saving by Program Integrity
Type of Medicare Savings FY 2013
Savings in
millions
FY 2014
Savings in
millions
Prevention Savings (Estimated)
Prepayment Review $ 12,913.5 $ 11,859.7
Provider Enrollment $ 701.3 $ 700.7
Suspensions $ 43.2 $ 52.2
Systematic Edits $ 738.9 $ 744.7
Total Estimated Prevention Savings $ 14,396.9 $ 13,357.3
Post Payment Recovery Savings (Estimated)
Law Enforcement Referrals $ 129.3 $ 102.7
Recovery Auditors $ 3,654.9 $ 2,455.2
Reviews and Audits $ 2,881.9 $ 2,207.1
Total Estimated Post Payment Recovery Savings $ 6,666.1 $ 4,765.0
Total Estimated Medicare Savings $ 21,063.0 $ 18,122.3
Source: Centers for Medicare and Medicaid Services, 2016
DISCUSSION
Legislation Against Medicare Fraud
The ACA had strengthened federal efforts to eliminate healthcare waste, abuse, and fraud by granting greater
authority to regulatory organizations in regards to their fraud combatting endeavors (Iglehart, 2010). In 2011, a total
of 1,430 individuals were charged with healthcare fraud, a 75% increase from 2008 (Hill et al., 2014). During Fiscal
Year (FY) 2011, the DOJ, CMS, and OIG’s combined efforts led to 977 new investigations of civil health care fraud,
743 criminal convictions and the largest monetary recovery in a single year totaling $4.1 billion. In addition, futurE
fraudulent acts against Medicare have been eliminated by revoking the billing privileges of 4,850 Medicare suppliers
and providers (Goldman, 2012). Medicare Fraud Essay Assignment.This has produced a promising outlook on the ACA’s influence on Medicare fraud
prevention, however still is a long term project as in 2014 it was estimated by the GAO $60 billion in fraudulent
Medicare payments from just of this fiscal year alone (GAO, 2015b).
Changes the government has made to the FCA to protect whistleblowers has encouraged more individuals to
report fraud. This has been evidenced by the increase in whistleblower cases from 300-400 cases between 2000 and
2009 to more than 700 cases during 2014 (DOJ, 2014). Nearly 86% of the $3.5 billion recovered by the DOJ in FY
2015 was attributed to cases filed under the qui tam provision of the FCA (DOJ, 2015). The total amount paid by the
government to whistleblowers who had risked their careers in these lawsuits, totaled $597 million in FY 2015 (DOJ,
2015). Although whistleblowers may fear retaliation in the form of loss of job and/or professional reputation
Business and Health Administration Association Annual Conference 2017 Page 23
(Lachman, 2008), these potentially large financial incentives should help to provide encouragement for others to report
witnessed fraud.
Information Technology and Data Sharing used Against Medicare Fraud
The specific task forces mentioned were just a few of many different committees and organizations that have
been developed to help identify fraud and recover monetary losses. In order to determine the effectiveness of these
task forces, tools and strategies have been evaluated to reveal strengths and weaknesses, as well as areas in need of
improvement. According to the DOJ (2016), HEAT has recovered a total of more than $8.9 billion in false claims,
and has charged more than 2,900 individuals. On June 22, 2016, it was announced that the Medicare Fraud Strike
Force, a subsection of HEAT, had discovered the largest Medicare fraud operation in history (DOJ, 2016). This
encounter led to a total of 301 individuals arrested and charged for approximately $900 million in fraudulent billing.
These results, compared to the $1.9 billion that was recovered between 2009 and 2011, demonstrate that HEAT ha s
been improving its performance and effectiveness.
An important aspect to consider when searching for solutions to increase productivity of current Medicare
fraud task forces has been to exam the amount of federal funding allocated to accomplish this mission. In 2008, the
government invested $1.13 billion in an effort to combat fraud (Iglehart, 2009). After dividing this budget between
agencies including Medicare, Medicaid, and other private health insurance providers, it has been estimated that
Medicare was able to dedicate less than 0.2% of its total budget to fraud prevention and detection. In 2015, the
Congress appropriated about $864 millions in the Medicare Integrity Program for Medicare and Medicare Fraud
detection. This has been quite a good investment it has been “won or negotiated” in FY 2015 about $1.9 billion in
anti-fraud efforts. (DHHS/DOJ, 2016). In addition to increasing financial support, these programs could have also
increased data sharing efforts. By collaborating with other anti-fraud organizations, the limited funding could have
been better managed to increase productivity. Medicare Fraud Essay Assignment.
As of February 2016, eight studies have been conducted by the HFPP that have included data provided from
all involved partners. After CMS analyzed the article titled “Misused Codes and Fraud Schemes” incorporated the
findings of this literature to improve fraudulent payment detection methods, $187.7 million in savings had been
reported to the Medicare Trust Fund “This partnership has continued to add partners from both private and public
healthcare sectors and has planned to continue this trend (DHHS/DOJ, 2016) (HFPP Board, 2013). Although savings
reports from the other studies have not been published, based on the reported savings from the first HFPP study, it c an
be concluded that this program has been successful. Since its creation in 2012, this partnership has captured nearly
half of the $350 million originally allotted by the ACA for fraud prevention (DHHS/DOJ, 2016b). By continuing to
add partners to this program, it can be assumed additional amounts of data will be provided that could be utilized in
combatting fraud and recovering losses.
A 2011 study by the U.S Government Accountability Office reported the lack of ongoing assessment in
relation to goal progression of the IDR and One PI was disheartening. Continual evaluation of objective progress
should be paramount with a project of such magnitude. It was not until one year after the IDR and One PI
implementation deadline of 2010 that the government acknowledged the program’s failure to meet initially established
goals (GAO, 2011). The inattention to continuing program appraisal was abysmal considering the initial investment
of $832 million for fraud detection efforts (GAO, 2006). Fortunately, as a result of this report and findings of several
other federal hearings, significant changes to the program were proposed in an effort to correct inefficiencies.
CONCLUSION
Within the past seven years, the U.S. government and citizens have been working more effi ciently to combat
Medicare waste, fraud, and abuse. Although the breadth of fraudulent activity remains unknown, the success of current
strategies has undoubtedly provided the crucial first steps necessary to further fraud prevention, detection, and
monetary recovery. Further increase in national healthcare spending is foreseeable if Medicare fraud is not effectively
controlled.
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Methods of Fraud
Medicare Part D, which provides prescription drug benefits, has been specifically targeted for fraudulent
activity. This activity has resulted from actions of patients as well as physicians and in the form of kickbacks from
pharmaceutical companies (Maruca, 2006). Regrettably, the Centers for Medicare and Medicaid Services (CMS) have
not created a dependable system for expense authentication (Toothman, Moore and Lee, 2011). In the event a patient
has exhausted coverage limits for prescription medications, healthcare providers have been known to write
prescriptions for the patient’s spouse or family member who has not met coverage maximums or altered medical
diagnoses in order to ensure prescription coverage under insurance plans (Maruca, 2006).
Kickbacks are another type of fraud that has prompted legislatures to enact numerous laws, such as the AntiKickback Statute and the Physicians Self-Referral Law or “Stark Law” (OIG, 2016). Although kickbacks have been
an acceptable practice by other industries, it is illegal to receive or provide rewards of any type for referrals in federal
healthcare programs (OIG, 2016). Physicians, other healthcare providers, medical suppliers, pharmaceutical
companies, and even patients have been involved in these types of scams (Phillips and Cohen LLP, 2016). Specific
examples of kickbacks have included physicians receiving payments for referring patients to specific dialysis centers,
medical companies providing grants or free medical equipment to physicians that utilize their products, and
pharmaceutical companies providing incentives or hosting seminars at luxurious resorts for physicians that agree to
prescribe their drugs (Phillips & Cohen LLP, 2016).
A third type of fraud is up coding, or provider billing for a more complex service or procedure than was
actually rendered, and/or diagnosing the patient with a costlier condition than was present (CMS, 2015b). An analysis
of data collected between 2001 and 2010 by the Department of Health and Human Services (DHHS) and the Office
of Inspector General (OIG) revealed, due to up coding for evaluation and management visits, Medicare payments
Business and Health Administration Association Annual Conference 2017 Page 19
increased by 48% or approximately $10.8 billion (Levinson, 2012). A 2013 report released by CMS concluded $965
million was improperly dispersed for established patient visits in 2012 as a result of inaccurate billing practices (CMS,
2013). Since the requirement for electronic health records (EHR) and electronic medical billing practice, the incidence
of up coding has become more prevalent (FORE, 2005). Reasons for this trend have been attributed to the overall
structure of the EHR which has allowed physicians to simply point and click boxes that satisfy coding-complexity
requirements (Pitts, 2012). A specific feature of EHR that has been potentially linked to the increase in up coding has
included the ability to select templates created to ensure billing is at the highest possible level (Pitts, 2012).
Healthcare fraud may also be classified as organized crime (Morris, 2009). This type of fraud often involved
either the stealing of patient lists from health care providers’ offices or healthcare identity theft. Healthcare identity
fraud has been defined as the theft of an insured individual’s identity by an uninsured person, with the intent to use
the personal information to receive medical services at little to no cost (Thornton et al., 2015). In contrast, when patient
records have been stolen from a healthcare facility, the information has been typically sold to others for profit. The
purchasers of this information have then proceeded to submit false claims to insurance companies in order to receive
payment (Morris, 2009).
The purpose of this study was to identify methods of Medicare fraud, examine the various programs created
by the U.S. government to combat fraud and abuse, and determine the effectiveness of these programs.
METHODOLOGY
The primary hypothesis of this study was: The U.S. government and citizens are not efficiently and
effectively utilizing available resources to prevent and combat Medicare fraud, waste, and abuse.
The methodology for this study was a literature review. Electronic databases Ebscohost, Health Source:
Nursing/Academic Edition, LexisNexis, ProQuest, and PubMed provided by Marshall University’s online library were
employed as well as Google Scholar. Google search engine was employed when articles could not be located through
the previously mention databases. Other respectable websites used were The U.S. Department of Health and Human
Services (DHHS), Centers for Medicare and Medicaid Services (CMS), U.S. Government Accountability Office
(GAO), Office of Inspector General (OIG) and U.S. Department of Justice (DOJ). Key words utilized for literature
retrieval included “Medicare fraud” or “abuse” and “Integrated Data Repository” or “up coding” or “predictive
modeling” or “whistleblower” or “fraud task force” or “organized crime” or “physician kickbacks” or “Affordable
Care Act”. Research discovery was limited to works published between 2003 and 2016. A total of 43 articles and
websites were reviewed in the English language. Primary and secondary data was integrated from scholarly articles
and reputable government publications. The search was completed by JM, LS, CT, and KV with validation by AC
who also acted as a second reader and verified literature met inclusion criteria.
RESULTS
Legislation Against Medicare Fraud
The Affordable Care Act (ACA) has implemented additional funds to help eliminate fraud associated with
Medicare and Medicaid fraud (Chang, 2013). The focus has been moved from a “pay-and-chase” model to prevention
(Ruggio, Hurd and McIntee, 2013). Changes that have been initiated by the ACA include creating rigorous screening
processes for Medicare and Medicaid providers, authorizing payment termination in cases of suspected fraud,
increasing allocation of funds for the prevention and fighting of fraud, stricter penalties for health care fraud offenders,
and incorporating new data sharing technologies (CMS, 2011a). In an effort to achieve these changes, a total of $350
million has been allotted between 2011 and 2020 to aid in the fight against Medicare fraud and criminal sentencing
guidelines for healthcare fraud related crimes have been increased by 20%-50% for crimes that have involved
monetary losses greater than $1 million (DHHS, 2016a).
The ability to identify all Medicare claims containing up coding or fraudulent billing has been difficult
considering Medicare processes over 1 billion fee-for-service claims annually, only about 2% of which have been
audited each year (CMS, 2014b). Considering the vast quantity of claims, whistleblowers have become an important
tool in fraud detection by informing the government of witnessed Medicare fraud (Barger, 2016). The False Claims
Business and Health Administration Association Annual Conference 2017 Page 20
Act (FCA) contained a provision known as qui tam which allowed whistleblowers to act on the government’s behalf
in relation to fraudulent claims, and collect a financial reward if the case proves successful (Stumphauzer, 2013). One
of the largest profiting whistleblower cases in U.S. history involved Hospital Corporation of America (HCA) which
faced a whistleblower lawsuit under the FCA (DOJ, 2003). HCA was forced to pay a total of $1.7 billion between
2000 and 2003 for fraudulent claims filed against Medicare. The whistleblowers received more than $151 million of
the settlement (DOJ, 2003). In the 2015 Fiscal Year, the Department of Justice recovered $1.9 billion came from
companies and individuals in the health care industry for allegedly providing unnecessary or inadequate care, paying
kickbacks to health care providers to induce the use of certain goods and services, or overcharging for goods and
services paid for by Medicare, Medicaid, and other federal health care programs; since 2009, the department has
recovered nearly $16.5 billion in health care fraud (DOJ, 2005).
Governmental Task Forces Utilization
An important method that has been used to combat healthcare fraud has involved employment of an effective
strategy that encompasses fraud prevention and detection as well as identification of waste and abuse (Byrd, Powell
and Smith, 2013). The U.S. has formed federal committees and organizations in an effort to decrease and ultimately
eliminate Medicare fraud (Byrd et al, 2013).
One federal program formed to combat Medicare fraud was the National Health Care Anti-Fraud Association
(NHCAA). The purpose of the organization was to provide essential computer analysis programs designed to detect
fraud and abuse in the healthcare system (Byrd, Powell and Smith, 2013). Lou Saccoccio, executive director of the
NHCAA, recommended that government programs should be motivated to protect themselves by ensuring thorough
background checks on new providers, engaging in anti-fraud information sharing, and holding provider payments in
the event that fraud was suspected (Jones and Jing, 2011).
In 2009, a task force titled Health Care Fraud Prevention and Enforcement Action Team (HEAT) was
established. HEAT is a joint effort by the Department of Health and Human Resources (HHS) and Department of
Justice (DOJ) with the goals of decreasing healthcare costs by identifying and preventing Medicare fraud, emphasizing
the practices of providers so as to eliminate waste, and strengthening relationships with other state and federal fraud
prevention agencies; it charged more than 1,400 defendants who have falsely billed Medicare more than $4.1 billion
in 2011 (DHHS, 2014a).
Information Technology and Data Sharing used Against Medicare Fraud
Fraudulent insurance claims have been problematic in both the public and private health arenas (DOJ, 2012).
In September 2006, CMS launched the Integrated Data Repository (IDR) in an effort to heighten detection of waste,
fraud, and abuse (GAO, 2011). The report indicated, at the time of launch, the project was anticipated to provide $21
billion in financial benefits by utilizing information technology to compile and examine data related to improper
claims reimbursement. Officials planned to have all necessary and required data assimilated into the system by Fiscal
Year (FY) 2010 (GAO, 2011). However, as of 2012, critical pieces of data had not been uploaded into the IDR
(Budetti, 2012). In conjunction with the IDR, CMS developed One Program Integrity (One PI), a system application
that provided contractors, data analysts, and law enforcement with access to the repository for further investigation of
information (CMS, 2011b). The relationship between these components is depicted in Figure 1. Implementation of
these programs has allowed for visualization of real-time claim submissions, access to records, and tracking of
payment history (GAO, 2011).
Business and Health Administration Association Annual Conference 2017 Page 21
Figure 1: Interaction within the IDR and One PI Environment
Health Plans Beneficiaries Medicare Providers Drug Codes
Integrated Data Repository
One PI Portal
CMS Analysts Contractors Law Enforcement
Source: Government Accountability Office, 2011
In 2012, to combat all categories of insurance fraud, the Obama administration created the Healthcare Fraud
Prevention Partnership (HFPP). This partnership was composed of several federal government offices, state
government organizations, private insurance companies, and professional organizations (DOJ, 2012). HFPP has
allowed data to be shared between both private and public insurance sectors that have been used to identify unknown
fraudulent schemes and possible prevention strategies (CMS, 2016a).
Predictive modeling is a relatively new technology, however it has been successfully implemented in various
financial fields for fraud prevention and by insurance carriers to determine reimbursements and future premiums
(White, 2011). Due to the success of the technology, Medicare has incorporated this technological advancement into
claims processing as a tool for fraud prevention (Parente et al., 2012). Predictive modeling has used advanced methods
to evaluate claims by assigning a score based on sets of characteristics frequently associated with inappropriate claims
and fraud, and high scoring claims are then manually evaluated for validity (Lewin Group, 2009). Medicare Fraud Essay Assignment.
Since the July 20, 2016 release of CMS’s Annual Report to Congress on the Medicare and Medicaid Integrity
Programs, it has become apparent that great strides have been made to improve information technology and data
sharing related to fraud prevention, detection, and abuse. The report estimated that program integrity strategies and
Business and Health Administration Association Annual Conference 2017 Page 22
activities had saved Medicare $21.1 billion in FY 2013 and $18.1 billion in FY 2014. These figures had also indicated
a 2-year return on investment of $12.4 to 1 (CMS, 2016b). The information has been further categorized by type of
savings, as displayed in Table 1.
Table 1: Medicare Saving by Program Integrity
Type of Medicare Savings FY 2013
Savings in
millions
FY 2014
Savings in
millions
Prevention Savings (Estimated)
Prepayment Review $ 12,913.5 $ 11,859.7
Provider Enrollment $ 701.3 $ 700.7
Suspensions $ 43.2 $ 52.2
Systematic Edits $ 738.9 $ 744.7
Total Estimated Prevention Savings $ 14,396.9 $ 13,357.3
Post Payment Recovery Savings (Estimated)
Law Enforcement Referrals $ 129.3 $ 102.7
Recovery Auditors $ 3,654.9 $ 2,455.2
Reviews and Audits $ 2,881.9 $ 2,207.1
Total Estimated Post Payment Recovery Savings $ 6,666.1 $ 4,765.0
Total Estimated Medicare Savings $ 21,063.0 $ 18,122.3
Source: Centers for Medicare and Medicaid Services, 2016
DISCUSSION
Legislation Against Medicare Fraud
The ACA had strengthened federal efforts to eliminate healthcare waste, abuse, and fraud by granting greater
authority to regulatory organizations in regards to their fraud combatting endeavors (Iglehart, 2010). In 2011, a total
of 1,430 individuals were charged with healthcare fraud, a 75% increase from 2008 (Hill et al., 2014). During Fiscal
Year (FY) 2011, the DOJ, CMS, and OIG’s combined efforts led to 977 new investigations of civil health care fraud,
743 criminal convictions and the largest monetary recovery in a single year totaling $4.1 billion. In addition, futur e
fraudulent acts against Medicare have been eliminated by revoking the billing privileges of 4,850 Medicare suppliers
and providers (Goldman, 2012). This has produced a promising outlook on the ACA’s influence on Medicare fraud
prevention, however still is a long term project as in 2014 it was estimated by the GAO $60 billion in fraudulent
Medicare payments from just of this fiscal year alone (GAO, 2015b).
Changes the government has made to the FCA to protect whistleblowers has encouraged more individuals to
report fraud. This has been evidenced by the increase in whistleblower cases from 300-400 cases between 2000 and
2009 to more than 700 cases during 2014 (DOJ, 2014). Nearly 86% of the $3.5 billion recovered by the DOJ in FY
2015 was attributed to cases filed under the qui tam provision of the FCA (DOJ, 2015). The total amount paid by the
government to whistleblowers who had risked their careers in these lawsuits, totaled $597 million in FY 2015 (DOJ,
2015). Although whistleblowers may fear retaliation in the form of loss of job and/or professional reputation
Business and Health Administration Association Annual Conference 2017 Page 23
(Lachman, 2008), these potentially large financial incentives should help to provide encouragement for others to report
witnessed fraud.

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Information Technology and Data Sharing used Against Medicare Fraud
The specific task forces mentioned were just a few of many different committees and organizations that have
been developed to help identify fraud and recover monetary losses. In order to determine the effectiveness of these
task forces, tools and strategies have been evaluated to reveal strengths and weaknesses, as well as areas in need of
improvement. According to the DOJ (2016), HEAT has recovered a total of more than $8.9 billion in false claims,
and has charged more than 2,900 individuals. On June 22, 2016, it was announced that the Medicare Fraud Strike
Force, a subsection of HEAT, had discovered the largest Medicare fraud operation in history (DOJ, 2016). This
encounter led to a total of 301 individuals arrested and charged for approximately $900 million in fraudulent billing.
These results, compared to the $1.9 billion that was recovered between 2009 and 2011, demonstrate that HEAT ha s
been improving its performance and effectiveness.
An important aspect to consider when searching for solutions to increase productivity of current Medicare
fraud task forces has been to exam the amount of federal funding allocated to accomplish this mission. In 2008, the
government invested $1.13 billion in an effort to combat fraud (Iglehart, 2009). After dividing this budget between
agencies including Medicare, Medicaid, and other private health insurance providers, it has been estimated that
Medicare was able to dedicate less than 0.2% of its total budget to fraud prevention and detection. In 2015, the
Congress appropriated about $864 millions in the Medicare Integrity Program for Medicare and Medicare Fraud
detection. This has been quite a good investment it has been “won or negotiated” in FY 2015 about $1.9 billion in
anti-fraud efforts. (DHHS/DOJ, 2016). In addition to increasing financial support, these programs could have also
increased data sharing efforts. By collaborating with other anti-fraud organizations, the limited funding could have
been better managed to increase productivity. Medicare Fraud Essay Assignment.
As of February 2016, eight studies have been conducted by the HFPP that have included data provided from
all involved partners. After CMS analyzed the article titled “Misused Codes and Fraud Schemes” incorporated the
findings of this literature to improve fraudulent payment detection methods, $187.7 million in savings had been
reported to the Medicare Trust Fund “This partnership has continued to add partners from both private and public
healthcare sectors and has planned to continue this trend (DHHS/DOJ, 2016) (HFPP Board, 2013). Although savings
reports from the other studies have not been published, based on the reported savings from the first HFPP study, it c an
be concluded that this program has been successful. Since its creation in 2012, this partnership has captured nearly
half of the $350 million originally allotted by the ACA for fraud prevention (DHHS/DOJ, 2016b). By continuing to
add partners to this program, it can be assumed additional amounts of data will be provided that could be utilized in
combatting fraud and recovering losses.
A 2011 study by the U.S Government Accountability Office reported the lack of ongoing assessment in
relation to goal progression of the IDR and One PI was disheartening. Continual evaluation of objective progress
should be paramount with a project of such magnitude. It was not until one year after the IDR and One PI
implementation deadline of 2010 that the government acknowledged the program’s failure to meet initially established
goals (GAO, 2011). The inattention to continuing program appraisal was abysmal considering the initial investment
of $832 million for fraud detection efforts (GAO, 2006). Fortunately, as a result of this report and findings of several
other federal hearings, significant changes to the program were proposed in an effort to correct inefficiencies.
CONCLUSION
Within the past seven years, the U.S. government and citizens have been working more effi ciently to combat
Medicare waste, fraud, and abuse. Although the breadth of fraudulent activity remains unknown, the success of current
strategies has undoubtedly provided the crucial first steps necessary to further fraud prevention, detection, and
monetary recovery. Further increase in national healthcare spending is foreseeable if Medicare fraud is not effectively
controlled.
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