Since 2007, the Health Care Fraud Unit has employed the Medicare Fraud Strike Forces model – the first of which began 30 miles south of here in Miami. Health Care Fraud Unit attorneys work in Washington, D.C., and in a total of nine Medicare Fraud Strike Forces across the country. These “hot spot” cities, or ones with high levels of billing fraud, include: Miami, Tampa, Baton Rouge, New Orleans, Chicago, Detroit, Houston, Brooklyn and Los Angeles. As such, they are formed with a cross-agency collaborative approach made up of investigators and prosecutors that focus on the worst offenders engaged in fraud in the highest intensity regions. This model brings together the prosecutorial, investigative and analytical resources of many Department of Justice components including the Criminal Division, the U.S. Attorney’s Offices, the FBI, as well as other agencies such as the Health and Human Services Office of the Inspector General (HHS-OIG), CMS and state and local law enforcement partners.
The list of cities keeps growing, and it will continue to grow, particularly given that we will begin focusing even more attention to other current issues plaguing our country, such as the opioid abuse epidemic. We are always looking for new and effective ways to hold health care professionals and institutions accountable when they willfully provide opioids to addicts who do not actually require such medication, or drug dealers and traffickers who illegally sell the drugs.
Since its inception in March 2007, the Medicare Fraud Strike Force has charged nearly 3,200 defendants who have collectively billed the Medicare program for more than $11 billion. To give you a sense of how this looks during a shorter timeframe: between the beginning of 2016 and February of this year, the Medicare Strike Force program, the Health Care Fraud Unit, and partner U.S. Attorney’s Offices, charged 482 individuals with a total loss amount of nearly $2.8 billion. During this period, 180 defendants were convicted, and the Medicare Fraud Strike Force reached resolutions totaling $512 million paid to U.S. and state authorities. These resolutions vary in amounts from thousands of dollars to one corporate resolution resulting in a U.S. penalty of $144 million.
I cannot overemphasize the importance of the cooperative partnerships between the Strike Forces, U.S. Attorney’s Offices, and several investigative agencies. Let me give you an example of the kind of results we have achieved by working hand-in-hand. Last year, the Criminal Division organized the largest national health care fraud takedown in history, both in terms of individuals charged and the loss amount. This nationwide sweep was led by the Medicare Fraud Strike Force with the collaboration of 36 U.S. Attorney’s Offices and the largest number ever of participating Medicaid Fraud Control Units (MFCUs). This effort resulted in charges against 301 individuals, including 60 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare and Medicaid fraud schemes involving approximately $900 million in false billings. This example drives home our commitment, capabilities, our nimbleness and our level of coordination.
To achieve these impressive results, the Strike Forces use a wide array of investigative and prosecutorial tools. In addition to many traditional methods for developing information and evidence, the Strike Forces are using highly advanced data analysis to identify aberrant billing levels in order to target suspicious billing patterns and emerging schemes. More specifically, the Medicare Fraud Strike Force is obtaining billing data from CMS in close to real time.
We now have an in-house data analytics team headed by some of the best and brightest. Analyzing billing data from CMS has become a key part of our investigations because it permits us to focus on the most aggravated cases and to identify quickly emerging schemes and new types of Medicare fraud. Access to CMS billing data in close to real time permits us to remain a step ahead. We have the opportunity to halt schemes as they develop. This cutting-edge method has truly revolutionized how we investigate and prosecute health care fraud.
What’s more is that we are pushing out the data we develop to U.S. Attorney’s Offices and investigative agencies across the country, not just our Strike Force cities. Doing so empowers other prosecutors whether or not they are in a city with a Strike Force by providing key data to fuel their investigations and prosecutions.
This approach is proving to be very successful. Not only are violators being punished, often with steep fines and long prison sentences, but we are deterring further conduct. Specifically, our prosecutions have significantly reduced Medicare fraud and lowered payments for certain Medicare-reimbursed goods and services. For example, prior to the creation of the Medicare Fraud Strike Force, Medicare payments for home health care increased each year from 2006 until 2010. In 2009, following federal law enforcement actions initiated by the Medicare Fraud Strike Force in Miami and the resulting report from the HHS-OIG regarding home health outlier payments, CMS changed Medicare’s Home Health Agency (HHA) outlier coverage policy to curb fraudulent HHA payments. Since 2010, payments for HHAs in Miami decreased by $100 million per quarter since its peak in 2009, and continued to decline, totaling an aggregate savings of over $1 billion. In the Detroit Medicare Fraud Strike Force location, HHA payments are down by over $25 million per quarter, respectively, since 2010.
This data indicates that the Medicare Fraud Strike Force home health fraud initiatives and convictions not only eliminated some of the bad actors but also deterred other fraudsters from exploiting the outlier coverage policy. Similar patterns of decreased Medicare payments exist for durable medical equipment and community mental health services following concentrated law enforcement initiatives and administrative fraud prevention efforts.
I would like to share with you a number of significant and impactful matters on which the Health Care Fraud Unit has been working.
I will begin with the Esformes matter. In July 2016, three individuals were charged in what was a massive Miami-area health care fraud and money laundering scheme involving approximately $1 billion in false and fraudulent claims to Medicare and Medicaid that started in 2002. The indictment charges three individuals for their roles in the scheme: (1) the owner of a dozen skilled nursing facilities and assisted living centers; (2) a hospital administrator who allegedly facilitated kickbacks and bribes; and (3) a physician’s assistant who allegedly received kickbacks and bribes in exchange for making medically unnecessary referrals.
In early 2017, a superseding indictment was returned, which alleges that the owner and his co-conspirators facilitated the scheme by bribing state regulators in order to obtain advance notice of inspections at certain facilities. As I mentioned earlier, fraud on this scale is a blow to the patients who allegedly received unnecessary care and to the American taxpayers who were defrauded and Americans in general because of the increase cost of health care.
The list of cities keeps growing, and it will continue to grow, particularly given that we will begin focusing even more attention to other current issues plaguing our country, such as the opioid abuse epidemic. We are always looking for new and effective ways to hold health care professionals and institutions accountable when they willfully provide opioids to addicts who do not actually require such medication, or drug dealers and traffickers who illegally sell the drugs.
Since its inception in March 2007, the Medicare Fraud Strike Force has charged nearly 3,200 defendants who have collectively billed the Medicare program for more than $11 billion. To give you a sense of how this looks during a shorter timeframe: between the beginning of 2016 and February of this year, the Medicare Strike Force program, the Health Care Fraud Unit, and partner U.S. Attorney’s Offices, charged 482 individuals with a total loss amount of nearly $2.8 billion. During this period, 180 defendants were convicted, and the Medicare Fraud Strike Force reached resolutions totaling $512 million paid to U.S. and state authorities. These resolutions vary in amounts from thousands of dollars to one corporate resolution resulting in a U.S. penalty of $144 million.
I cannot overemphasize the importance of the cooperative partnerships between the Strike Forces, U.S. Attorney’s Offices, and several investigative agencies. Let me give you an example of the kind of results we have achieved by working hand-in-hand. Last year, the Criminal Division organized the largest national health care fraud takedown in history, both in terms of individuals charged and the loss amount. This nationwide sweep was led by the Medicare Fraud Strike Force with the collaboration of 36 U.S. Attorney’s Offices and the largest number ever of participating Medicaid Fraud Control Units (MFCUs). This effort resulted in charges against 301 individuals, including 60 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare and Medicaid fraud schemes involving approximately $900 million in false billings. This example drives home our commitment, capabilities, our nimbleness and our level of coordination.
To achieve these impressive results, the Strike Forces use a wide array of investigative and prosecutorial tools. In addition to many traditional methods for developing information and evidence, the Strike Forces are using highly advanced data analysis to identify aberrant billing levels in order to target suspicious billing patterns and emerging schemes. More specifically, the Medicare Fraud Strike Force is obtaining billing data from CMS in close to real time.
We now have an in-house data analytics team headed by some of the best and brightest. Analyzing billing data from CMS has become a key part of our investigations because it permits us to focus on the most aggravated cases and to identify quickly emerging schemes and new types of Medicare fraud. Access to CMS billing data in close to real time permits us to remain a step ahead. We have the opportunity to halt schemes as they develop. This cutting-edge method has truly revolutionized how we investigate and prosecute health care fraud.
What’s more is that we are pushing out the data we develop to U.S. Attorney’s Offices and investigative agencies across the country, not just our Strike Force cities. Doing so empowers other prosecutors whether or not they are in a city with a Strike Force by providing key data to fuel their investigations and prosecutions.
This approach is proving to be very successful. Not only are violators being punished, often with steep fines and long prison sentences, but we are deterring further conduct. Specifically, our prosecutions have significantly reduced Medicare fraud and lowered payments for certain Medicare-reimbursed goods and services. For example, prior to the creation of the Medicare Fraud Strike Force, Medicare payments for home health care increased each year from 2006 until 2010. In 2009, following federal law enforcement actions initiated by the Medicare Fraud Strike Force in Miami and the resulting report from the HHS-OIG regarding home health outlier payments, CMS changed Medicare’s Home Health Agency (HHA) outlier coverage policy to curb fraudulent HHA payments. Since 2010, payments for HHAs in Miami decreased by $100 million per quarter since its peak in 2009, and continued to decline, totaling an aggregate savings of over $1 billion. In the Detroit Medicare Fraud Strike Force location, HHA payments are down by over $25 million per quarter, respectively, since 2010.
This data indicates that the Medicare Fraud Strike Force home health fraud initiatives and convictions not only eliminated some of the bad actors but also deterred other fraudsters from exploiting the outlier coverage policy. Similar patterns of decreased Medicare payments exist for durable medical equipment and community mental health services following concentrated law enforcement initiatives and administrative fraud prevention efforts.
I would like to share with you a number of significant and impactful matters on which the Health Care Fraud Unit has been working.
I will begin with the Esformes matter. In July 2016, three individuals were charged in what was a massive Miami-area health care fraud and money laundering scheme involving approximately $1 billion in false and fraudulent claims to Medicare and Medicaid that started in 2002. The indictment charges three individuals for their roles in the scheme: (1) the owner of a dozen skilled nursing facilities and assisted living centers; (2) a hospital administrator who allegedly facilitated kickbacks and bribes; and (3) a physician’s assistant who allegedly received kickbacks and bribes in exchange for making medically unnecessary referrals.
In early 2017, a superseding indictment was returned, which alleges that the owner and his co-conspirators facilitated the scheme by bribing state regulators in order to obtain advance notice of inspections at certain facilities. As I mentioned earlier, fraud on this scale is a blow to the patients who allegedly received unnecessary care and to the American taxpayers who were defrauded and Americans in general because of the increase cost of health care.