2023 Health Care Fraud and Abuse Control Program Report Reveals $3.4 Billion in Fraud Recovery

Highlights

The OIG and DOJ released the annual report, detailing $3.4 million in healthcare fraud and abuse recoveries and the exclusion of 2,112 individuals and entities from federal programs

Pandemic-related fraud remains a particular focus for government enforcement authorities

The report emphasizes that federal and state authorities, as well as private insurers and fraud watchdog groups, are coordinating more than ever before, through data sharing and collaboration

The 2023 Health Care Fraud and Abuse Control (HCFAC) Program Annual Report , jointly released by the Department of Health and Human Services (HHS) and the Department of Justice (DOJ), highlights significant strides in combating fraud, waste, and abuse across federal healthcare programs this year. Total recoveries reached over $3.4 billion, nearly double the prior year's total. This increase can be attributed to several factors including a return to full enforcement activities following pandemic-related slowdowns, a record number of high-value settlements under the False Claims Act, and the aggressive use of data analytics and Strike Force operations to target complex fraud schemes.

Additionally, the DOJ and HHS-OIG leveraged enhanced coordination between federal and state enforcement agencies as well as advanced technology tools to identify billing issues and emerging fraud patterns, such as fraud related to COVID-19 relief programs and opioid distribution. These significant recoveries and enforcement efforts is robust effort highlights the importance of proactive compliance measures for healthcare stakeholders to minimize vulnerabilities within their organizations.

Exclusions and Compliance

In FY 2023, the HHS Office of Inspector General (HHS-OIG) excluded 2,112 individuals and entities from federal healthcare programs. Of these, 871 were mandatory exclusions based on criminal convictions related to healthcare programs, and 203 resulted from beneficiary abuse or neglect, both occurring by operation of law. Permissive exclusions are discretionary actions by the HHS-OIG to protect healthcare programs from risks, often based on licensure issues or administrative violations. In FY 2023, 531 cases resulting in permissive exclusion were tied to state healthcare licensure revocations.

Pandemic-Related Fraud

Pandemic-related fraud remains a focus for the government. In April 2023, 18 defendants across nine districts were charged with $490 million in COVID-19-related fraud. Since the pandemic began, more than 54 defendants have been charged in connection with $971.8 million in fraudulent activities. Healthcare providers must prioritize transparency and ensure accurate documentation for all COVID-19-related billing to mitigate risk.

Collaboration and Data Sharing

The Healthcare Fraud Prevention Partnership (the HFPP) is a voluntary public-private partnership that helps detect and prevent healthcare fraud through data and information sharing. Partners include federal government, state agencies, law enforcement, private health insurance plans, and healthcare anti-fraud associations. The partnership employs multiple strategies such as reviewing claims data, creating provider reference files, and conducting targeted studies on areas prone to fraudulent activities like COVID-19 testing, telehealth billing, and genetic testing. HFPP helps members to learn about new fraud schemes and develop proactive strategies to disrupt them through information-sharing sessions and focus groups.

Resource Allocation and Risk Management

In 2023, the HCFAC program received $338 million in mandatory funding and $893 million in discretionary funding. This reflects an increase from 2022's allocations of $322.7 million in mandatory funding and $873 million in discretionary funding. Over the three-year period from 2021 to 2023, the program achieved a return on investment of $2.80 for every dollar expended . Key risk management priorities for healthcare stakeholders are addressing improper billing practices and kickback schemes.

Key Comparisons of the 2022 and 2023 HCFAC Annual Reports

Category	FY 2022	FY 2023
Civil Healthcare Fraud Settlements & Judgments	Exceeded $1.6 billion	Exceeded $1.8 billion
Total Recoveries	$1.7 billion returned to the government or paid to private persons	$3.4 billion returned to the government or paid to private persons
Medicare Trust Funds Transfers	Over $1.2 billion	Nearly $974 million
Federal Medicaid Transfers	$126.1 million	Over $257.2 million
Criminal Investigations	809	802
Civil Investigations	774	770
Criminal Charges Filed	Over 419 cases involving 680 defendants	Over 346 cases involving 530 defendants
Convictions for Healthcare Fraud	More than 477 defendants convicted	More than 476 defendants convicted
HHS-OIG Exclusions	2,332 individuals and entities	2,112 individuals and entities
Strike Force Indictments	266 filings involving $2.2 billion in fraud	276 filings involving $3.9 billion in fraud
Share of Recoveries Paid to Whistleblowers	$170.5 million	$462.7 million
Healthcare Fraud Prevention Partnership Members	267 partners	300 partners

Key Takeaways

The HCFAC 2023 report highlights various fraudulent schemes including kickbacks tied to unnecessary testing, misuse of pandemic relief funds, fraudulent billing for durable medical equipment, genetic testing scams, and improper billing practices in home health, hospice, and hospital services. Key compliance takeaways involve enforcing strong internal controls, thoroughly documenting medical necessity, training on anti-kickback and Stark laws, conducting regular audits, and fostering collaboration among compliance, legal, and clinical teams to more effectively identify and address risks.

For more information, please contact the Barnes & Thornburg attorney with whom you work or John Kelly at 202-831-6731 or [email protected], Jackie Papish at 202-831-6732 or [email protected], Tony Burba at 312-338-5908 or [email protected] or Astrid Monroig at 404-264-4097 or [email protected].

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