OIG touts $2.4 billion in anti-fraud savings

The watchdog agency overseeing the Department of Health and Human Services (HHS) announced this week that its enforcement efforts have generated nearly $2.4 billion in savings for federal healthcare programs.

The watchdog agency overseeing the Department of Health and Human Services (HHS) announced this week that its enforcement efforts have generated nearly $2.4 billion in savings for federal healthcare programs.

The HHS Office of the Inspector General (OIG) issued its semiannual report to Congress Tuesday evening, outlining its activities during fiscal year 2006 to promote the integrity of HHS spending and to root out private companies and individuals seeking to defraud Medicare, Medicaid or other programs.

According the report, the OIG recouped $1.6 billion as a result of investigations and another $789 million from audits.

The office is charged with independent oversight and investigation into the finances and practices of HHS agencies and their private-sector partners. HHS agencies have a combined annual budget of nearly $700 billion, most of which is mandatory spending on Medicare and Medicaid.

The OIG has the authority to exclude healthcare providers and other private entities from doing business with HHS if they violate the laws and regulations governing the department. The office, in conjunction with the Department of Justice, also can file criminal and civil cases against companies and individuals.

The agency can reclaim improper payments to private-sector entities as well as levy fines and civil monetary penalties against them.

During the second half of FY 2006, the OIG banned 3,425 people or companies from participating in HHS programs because of fraud and abuse charges. The OIG pursued 472 criminal cases and 272 civil cases.

The OIG highlighted its actions against several companies.

The firm AdvancePCS, which manages pharmacy benefits for health-insurance companies, consented to a five-year corporate integrity agreement and $137.5 million in recompense to the government as a result of an investigation. The OIG alleged that the firm paid kickbacks to drug makers and insurers.

The oxygen-equipment supplier Lincare agreed to pay the government $10 million to settle charges that it conducted a scheme for eight years under which it allegedly paid illegal kickbacks to doctors for referring patients to its facilities.

Other cases were seamier. A married couple in Kansas received prison sentences for running a bogus treatment facility for mentally ill patients for more than 20 years, fraudulently billed Medicare for services and subjected the residents to sexual abuse and forced labor. The husband got a 30-year sentence and his wife seven years, along with $500,000 in fines. In another case, a podiatrist was sentenced to death for murdering a woman who was about to reveal his Medicare fraud to a grand jury.

The OIG also participates in the Health Care Fraud and Abuse Control Program, a 10-year-old joint initiative with the Department of Justice. The agencies announced in October that their efforts to combat waste, fraud and abuse in federal healthcare programs, including those outside HHS, generated $1.47 billion in fiscal year 2005.

The OIG report also reviews HHS’s or Congress’s implementation of its recommendations on program reforms. According to the agency’s analysis, the adoption of OIG-recommended changes to HHS programs resulted in $35.8 billion in savings to taxpayers during FY 2006 alone.