In recent months we have seen a drastic increase in the number and size of federal healthcare fraud investigations and dollar recoveries.  We’ve seen a renewed commitment to anti-fraud enforcement efforts in the OIG Work Plan.  We’ve seen CMS begin to using predictive modeling technology just since July 1st to combat Medicare fraud on a national basis, technology similar to that used by credit card companies, which helps identify potentially fraudulent Medicare claims and stop them before they are paid.


According to a USA Today report, the number of federal healthcare fraud prosecutions from the first eight months of 2011 indicates that prosecutions may reach an increase of 85% over last year due to these robust fraud-fighting efforts.  The report details the research of Transactional Records Access Clearinghouse, a non-partisan group, showing that there have been 903 prosecutions so far this year — a 24% increase compared to fiscal year 2010.   In the past five years, Transactional Records Access Clearinghouse research shows that prosecutions have grown by 71%.

Department of Justice officials agree those numbers are accurate and say the increase is partially due to some particularly significant actions, such as the largest take-down to date, which brought in 111 physicians, nurses and executives accused of fraudulently billing $225 million to Medicare.   According to the DOJ, convictions are also up significantly in 2011, with 23 trial convictions for Medicare fraud in all of 2010 and already 24 convictions in the first eight months of 2011. 


The message to healthcare providers and investors is clear.  This administration is serious about fraud prevention.  Both providers and potential investors must closely scrutinize providers’ internal compliance efforts, billing histories and patterns and a variety of other operational and legal aspects of the provider to better assess the provider’s short term and long term outlook in this enforcement environment.