1

VIEW ON FRAUD AND VIEW ON FRAUD AND ABUSEABUSE

David E. MatyasEpstein Becker & GreenWashington, DC

2

What Does The What Does The Future Hold?Future Hold?

3

4

5

Who’s Responsible for Who’s Responsible for Fighting Fraud?Fighting Fraud?

Federal Government (DOJ;FBI; DHHS; US Postal Service)

State Agencies Congress Private Third Party Payors Private Citizens

6

A Climate of A Climate of EnforcementEnforcement

1992 1999

Criminal health fraud matters 343 1,994Criminal convictions 90 396Pending Civil matters 270 2,278pendingFBI resources devoted 112 420+(agent work years) Source: HHS & DOJ Health Care Fraud & Abuse Control Program Annual Report for FY 1999

7

FBI Health Care Fraud FBI Health Care Fraud ResourcesResources

111.8146.9

225260.5 256

395442

0

100

200

300

400

500

1992 1993 1994 1995 1996 1997 1998

FBI Full Time

Equivalents

Fiscal Years

8

Increased Criminal & Increased Criminal & Civil Monetary PenaltiesCivil Monetary Penalties

In FY 1997 alone, $1.087 billion was collected and in FY 1998, over $480 million was won or negotiated in criminal fines, and civil judgments and settlements.

In FY 1999, the OIG and DOJ collected over $490 million.

9

Increased Program Exclusions Increased Program Exclusions and Criminal Convictionsand Criminal Convictions

In 1999, federal prosecutors convicted over 300 individuals (including physicians and hospital executives) in health care fraud cases, an increase of 16 percent from the prior year.

Since 1997, more than 8,600 individuals and entities have been excluded from participation in federal and state health care programs.

10

Significant FactorsSignificant Factors

11

The Fraud And Abuse The Fraud And Abuse Control ProgramControl Program

Enacted as part of HIPAA, the Program gives DHHS and DOJ responsibility for coordinating public and private enforcement activities.

Congress created a new expenditure account (named the “Health Care Fraud and Abuse Control Account”) in which DHHS and DOJ jointly certify moneys needed each year to finance anti-fraud initiatives

12

Program GoalsProgram Goals

coordinating law enforcement program

conducting audits, evaluations and investigations

helping facilitate enforcement of laws

providing guidance to the industry on fraudulent practices

establishing a national data bank to receive and report adverse actions

13

The Federal False The Federal False Claims ActClaims Act

The Ultimate Legal Weapon In Prosecuting Health Care Cases

14

Whistleblower ActionsWhistleblower Actions

6095 82 90

131

278

33

119

221

360

546

0

100

200

300

400

500

600

# Ca

ses

Over half of the $480 million the DOJ was awarded in health care fraud cases in FY 1998, involved judgements or settlements related partially or completely to allegations in qui tam cases.DOJ Health Care Fraud Report (FY99)

15

Gov’t Fraud Hotline and the Gov’t Fraud Hotline and the Establishment Of Monetary Establishment Of Monetary

Reward ProgramReward Program Individuals who provide info. that leads

to recovery of at least $100 may be eligible for a reward equaling the lesser of $1000 or 10% of the overpayments recovered

In 1997, over 32,000 complaints that warranted follow-up action were received on this hotline

Now with the additional incentive of a monetary reward, more people will consider reporting possible wrongdoing

16

THE FUTURE:THE FUTURE:The Question Should The Question Should NotNot Be Be

Will the government’s fraud enforcement activities against health care providers continue into the future?

17

Rather the Question Rather the Question Should BeShould Be

What will the government’s fraud enforcement activities focus on in the future?

18

PredictionsPredictions

Continued Emphasis on Billing More Emphasis on Kickbacks Managed Care Activities E-Health Research Private Payor Fraud Actions Scrutiny of CIA Compliance

19

View on Fraud and View on Fraud and AbuseAbuse

David E. MatyasEpstein Becker & GreenWashington, DC