HEATH CARE FRAUD IS ON THE RISE

Author: Rachel Blumberg, Senior Editor

Health care fraud is an ever-evolving and complex threat that negatively impacts Americans.[i]  Health care fraud has increased by 1.4% since Fiscal Year 2018 with a reported 431 Health care fraud offenders in the year 2022.[ii]  The Federal Bureau of Investigation (“FBI”) estimates that health care fraud costs Americans $80 billion dollars a year in taxes.[iii]  Health care fraud must be stopped, and the government is taking strides in the right direction.

Health care fraud occurs in many ways, including “snake oil”[iv] marketing, health insurance fraud, drug fraud, and medical fraud.[v]  The different schemes used to defraud the health care systems include billing for services not rendered, upcoding services, upcoding items, duplicating claims by copying and pasting entries into medical records, providing excessive services or unnecessary services, and engaging in kickbacks.[vi]  As a result, the government, healthcare insurance carriers, and patients are losing billions of dollars a year.[vii]

Under 18 U.S.C. § 1347, anyone who knowingly and willfully executes a scheme to defraud any heath care benefit program is subject to fines and/or imprisonment of up to 10 years or 20 years if the violation results in serious bodily injury.[viii]   Under the False Claims Act, 31 U.S.C. § 3729, any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval is liable to the United States Government for civil penalties of up to $10,000 in fines plus three times the amount of damages which the Government sustains because of the acts of that person.[ix]

Under the False Claims Act, a person may bring a civil action for a violation of 31 U.S.C. § 3729 in the name of the government, i.e., a qui tam action, in which the government has the responsibility of prosecuting the action reported, if they so choose, and if a settlement arises from the violation, the private citizen who successfully brought the qui tam action may be awarded 15% to 25% of the settlement or judgment.[x]  The Department of Justice obtained more than $2.2 billion dollars in settlements and judgments from these civil cases in the 2022 fiscal year.[xi]

To prosecute fraudsters under 18 U.S.C. § 1347, the FBI, Department of Justice (“DOJ”), and Department of Health and Human Services joined together to implement enforcement actions to combat the fraud.[xii]  In 2007, the Obama Administration established the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”) in which investigations of doctors, nurses, home health care providers, administrative assistants, therapists, and patient recruiters, resulting in criminal charges for Medicaid fraud.[xiii]  In 2021, a six-week National Health Care Fraud Enforcement Action (categorized as a “takedown”) resulted in criminal charges against 138 defendants for over 1.4 billion dollars of lost funds.[xiv]  On April 20, 2023, the Justice Department announced the largest coordinated law enforcement action in the United States resulting in 18 defendants being charged for health care fraud schemes that exploited the COVID-19 pandemic by around $490 million dollars.[xv]  Most recently, on June 28, 2023, the Justice Department, alongside federal and state enforcement partners, announced a two-week, nationwide enforcement action resulting in 78 defendants being charged for health care fraud and opioid abuse schemes amounting to around $2.5 billion dollars.[xvi]

The United States health care system is under constant attack by fraudsters who are driven by greed.[xvii]  When bad actors exploit health care programs for illicit financial gain, they put greed before the needs and safety of patients and take valuable resources away from their intended recipients.[xviii]  The government is moving in the right direction by implementing enforcement actions against health care fraud to restore the American people of their pilfered dollars.

[i] National Enforcement Action Results in 78 Individuals Charged for $2.5B in Health Care Fraud, Med-Net (June 28, 2023), https://mednetconcepts.com/mednetconnect/national-enforcement-action-results-in-78-individuals-charged-for-2-5b-in-healthcare-fraud-2/.

[ii] Quick Facts – Health Care Fraud Offenses, U.S. Sent’g Comm.n (last visited Aug. 11, 2023), https://www.ussc.gov/sites/default/files/pdf/research-and-publications/quick-facts/Health_Care_Fraud_FY22.pdf.

[iii] Health Care Fraud, Wikipedia (last edited Feb 1, 2023), https://en.wikipedia.org/wiki/Health_care_fraud.

[iv]  Snake oil is a term used to describe someone who sells, promotes, or is a general proponent of some valueless or fraudulent cure, remedy, or solution. Snake Oil, Wikipedia (last edited July 27, 2023), https://en.wikipedia.org/wiki/Snake_oil.

[v] Health Care Fraud, Wikipedia (last edited Feb 1, 2023), https://en.wikipedia.org/wiki/Health_care_fraud.

[vi] Id.

[vii] Id.

[viii] See 18 U.S.C. § 1347.

[ix] See 31 U.S.C. § 3729.

[x] See 31 U.S.C. § 3730.

[xi] The False Claims Act, U.S. Dep’t of Just. (Apr. 4, 2023), https://www.justice.gov/civil/false-claims-act.

[xii] Health Care Fraud, The Law Offices of Barton Morris (last visited Aug. 11, 2023), https://michigancriminalattorney.com/fraud-lawyers-in-michigan/health-care-fraud-attorney/.

[xiii] Id.

[xiv] 2021 National Health Care Fraud Enforcement Action, Hous. Hum. Servs. - Off. Inspector General (last updated Sep. 17, 2021), https://oig.hhs.gov/newsroom/media-materials/2021-national-ea/?utm_source=oig-home&utm_medium=oig-hero&utm_campaign=2021-natnl-ea-hero.

[xv] Justice Department Announces Nationwide Coordinated Law Enforcement Action to Combat COVID-19 Health Care Fraud, U.S. Dep’t of Just. (Apr. 21, 2022), https://www.justice.gov/opa/pr/justice-department-announces-nationwide-coordinated-law-enforcement-action-combat-health-care.

[xvi] National Enforcement Action Results in 78 Individuals Charged for $2.5B in Health Care Fraud, Med-Net (June 28, 2023), https://mednetconcepts.com/mednetconnect/national-enforcement-action-results-in-78-individuals-charged-for-2-5b-in-healthcare-fraud-2/.

[xvii] Participation in Coordinated National Health Care Fraud Enforcement, IRS (June 28, 2023), https://www.irs.gov/compliance/criminal-investigation/participation-in-coordinated-national-health-care-fraud-enforcement-action.

[xviii]  Participation in Coordinated National Health Care Fraud Enforcement, I.R.S. (June 28, 2023), https://www.irs.gov/compliance/criminal-investigation/participation-in-coordinated-national-health-care-fraud-enforcement-action.