Federal efforts to root out health care fraud in the Medicare and Medicaid programs last year paid off – to the tune of more than $4 billion.

In a report released on Feb. 14, the departments of Justice and Health and Human Services detailed how they were able to recover nearly $4.1 billion in improper and fraudulent payments from government health programs during fiscal year 2011. The eyebrow-raising figure is the largest health care fraud recovery that the federal government has made in a single year.

"We’re regaining the upper hand in our fight against health care fraud," HHS Secretary Kathleen Sebelius said during a press conference to release the report.

HHS also announced a proposed regulation that would require Medicare providers and suppliers to report and return self-identified overpayments within 60 days or when a corresponding cost report is due, whichever date is later.

The regulation, mandated by the Affordable Care Act, sets a deadline for returning overpayments for the first time. Some examples of the overpayments include being paid twice for the same service, a payment for an excluded or unnecessary service, or a payment made to the wrong person. Physicians and other providers who fail to return overpayments within the specified time period could face civil monetary penalties under the False Claims Act or be excluded from participating in federal health care programs.

The fraud crackdown isn’t just good policy, Ms. Sebelius said, it’s also a good investment. Between 2009 and 2011, the federal government recovered more than $7 for every $1 spent on fraud prevention and recovery activities. That return on investment is about $2 higher than the historical average.

Fraud prevention has been a cabinet-level priority since 2009, Ms. Sebelius said. Prior to that, health care scams were growing in scope and sophistication, and the government was falling behind in prevention and recovery efforts. Now, HHS employs technology to identify suspicious claims in real time and stop payments when needed.

HHS and Justice also are looking to expand the successful Medicare Fraud Strike Force teams that are currently working in Miami, Los Angeles, New York, Baton Rouge, Detroit, Houston, Tampa, Chicago, and Dallas.

In addition, over the last 3 years, HHS has issued regulations aimed at preventing fraud. For example, providers who have been terminated from a state Medicaid program or the Medicare program are now also being terminated from all Medicaid programs. HHS is also performing a more rigorous screening of providers in the durable medical equipment and home health industries.

"The days when you could rent an office, acquire some Medicare numbers, and start sending out claims for motorized wheelchairs that people didn’t need and often didn’t get are coming to an end," she said.

02/14/12