May 2002

Government Pulls in $1.3 Billion
in Health-Care Fraud Penalties

Washington, D.C. - The U.S. government collected more than $1.3 billion in health-care fraud settlements and penalties last year, the U.S. Justice Department and the Department of Health and Human Services announced.

More than $1 billion, or 90%, of that was returned to the Medicare Trust Fund. An additional $42.8 million was recovered as the federal share of Medicaid restitution. It was the largest return to the government since the recovery program began five years ago, officials from the Justice Department said.

Officials said the figures are not indicative of all the money ordered returned in a particular year. Some of the judgments, settlements and administrative awards in 2001 will result in collections in future years, just as some of the 2001 collections are attributable to actions from prior years.

In a statement, the department said the government’s efforts in successfully detecting and eliminating health-care fraud have grown over the last five years, following the passage of the Health Insurance Portability and Accountability Act of 1996.

HIPAA established a national Health Care Fraud and Abuse Control Program. The program is under the joint direction of the U.S. Attorney General and the Secretary of the Department of Health and Human Services, acting through the department’s Inspector General, and is designed to coordinate federal, state, and local law enforcement activities with respect to health-care fraud and abuse.

“HIPAA made available much needed and powerful new criminal and civil enforcement tools and financial resources that permitted the government to expand and intensify the fight against health-care fraud,” the department said in a prepared statement.

During the five years of the program, more than $2.9 billion has been returned to the Medicare Trust Fund. In addition, more than 2,000 defendants were convicted for health-care fraud-related offenses. More than 15,000 entities or individuals were excluded from participating in Medicare, Medicaid, and other federally sponsored health-care programs.

Last year, federal prosecutors filed 445 criminal indictments in health-care fraud cases. A total of 465 defendants were convicted for health-care fraud-related crimes in 2001. There were 1,746 civil matters pending and 188 civil cases filed at the same time.

During the year, HHS excluded more than 3,756 individuals and entities from participating in Medicare and Medicaid programs or other federally sponsored health-care programs - an all-time record high, the Justice Department said . Most of the exclusions came as a result of convictions for crimes relating to Medicaid or Medicare, for patient abuse or neglect, or as a result of revocation of licenses.

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