OIG Reports $6.9 Billion in Expected Recoveries Among FY 2012 Accomplishments

November 27, 2012

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Washington, DC - In its Semiannual Report to Congress, the Department of Health & Human Services (HHS) Office of Inspector General (OIG) today announced expected recoveries of about $6.9 billion from audits and investigations. The report highlights OIG accomplishments for the second half of FY 2012 (April 1, 2012 - September 30, 2012) and for FY 2012 in total.

"OIG has been at the forefront of fighting waste, fraud, and abuse in Medicare, Medicaid and more than 300 other HHS programs for more than 30 years," said Inspector General Daniel R. Levinson. "We've made significant progress over the past year with the help of a dedicated, professional staff and the collaborative efforts of our government partners. In the coming months, we'll continue our work protecting the integrity of HHS programs and the health and welfare of the people they serve."

The $6.9 billion in expected recoveries consists of $923.8 million in audit receivables and $6 billion in investigative receivables. In addition, OIG reported $8.5 billion in estimated savings resulting from legislative, regulatory, or administrative actions that were supported by our recommendations. Such savings generally reflect third-party estimates (such as those by the Congressional Budget Office) of funds made available for better use through reductions in Federal spending.

OIG also excluded 3,131 individuals and entities from participation in Federal health care programs in FY 2012. OIG reported 778 criminal actions against individuals or entities that engaged in crimes against HHS programs; and 367 civil actions, which include false claims and unjust enrichment lawsuits filed in Federal district court, civil monetary penalties settlements, and administrative recoveries related to provider self-disclosure matters.

Additional highlights of OIG accomplishments for FY 2012 include:

Medicare Fraud Strike Force efforts resulted in the filing of charges against 305 individuals or entities, 181 convictions, and $151 million in investigative receivables. The strike force teams coordinate law enforcement operations conducted jointly by Federal, State, and local law enforcement entities. The teams, now a key component of the Health Care Fraud Prevention and Enforcement Action Team, have a record of successfully analyzing data to quickly identify and prosecute fraud.
A May 2, 2012 nationwide takedown involved $452 million in false billing - the highest amount of Medicare false billings in a single takedown. Over 200 OIG Special Agents, Forensic Examiners and Analysts participated in Medicare Fraud Strike Force operations in 7 cities that resulted in charges against 107 individuals, including doctors, nurses, and other licensed medical professionals, for their alleged participation in Medicare fraud schemes.
GlaxoSmithKline (GSK) agreed to pay $3 billion to resolve violations regarding its marketing and promotion practices associated with several drugs. In three False Claims Act settlement agreements, the United States alleged that GSK promoted several drugs for off label uses and paid kickbacks to induce the prescription of certain drugs, improperly promoted certain drugs with false and misleading statements about the drugs' safety, and violated the requirements of the Medicaid drug rebate program. As part of the settlement, GSK entered into a 5-year Corporate Integrity Agreement with OIG. In addition to the settlement with the Federal government, GSK entered into separate Medicaid related settlements with multiple States.
In Gaps Continue in Nursing Home Preparedness and Response During Disasters, OIG found that from 2007 to 2010, most nursing homes nationwide met Federal requirements for written emergency plans and preparedness training. However, plans lacked relevant information, including only about half of the tasks on the CMS checklist. Nursing homes faced challenges with unreliable transportation contracts, lack of collaboration with local emergency management, and residents who developed health problems. State long term care ombudsmen were often unable to support nursing home residents during disasters; most had no contact with residents until after the disasters. States reported making some efforts to assist nursing homes during disasters, mostly related to nursing home compliance issues and ad hoc needs.
Two audits revealed that payments for evaluation and management services (E/M) do not always reflect the actual services provided for cardiovascular and musculoskeletal surgeries. Reviews of Medicare claims for cardiovascular and musculoskeletal surgeries in 2007 revealed that Medicare's payment methodology often did not reflect the actual number of preoperative and postoperative physician E/M services actually provided to beneficiaries, resulting in wasteful spending. The physician fee schedule includes global surgery fees for the surgical service and the related E/M services provided during the global surgery period, which, for major surgeries, includes the day before the surgery, the day of the surgery, and the 90 days after the day of the surgery. In determining a global surgery fee, Medicare estimates the number of E/M services that physicians provide to typical beneficiaries receiving such surgeries and compensates physicians regardless of the E/M services actually provided. For the two types of surgeries, we estimated that Medicare paid a net $63 million in E/M services that were not provided in 2007.
The report Questionable Billing by Community Mental Health Centers revealed that in 2010, about half of community mental health centers (CMHC) met or exceeded thresholds that indicated unusually high Medicare billing for at least one of nine questionable billing characteristics related to partial hospitalization programs (PHP). PHPs are intense, structured, outpatient mental health treatment programs. We found that about 90 percent of CMHCs with questionable billing were located in States that do not require CMHCs to be licensed or certified.
OIG is responsible for overseeing the activities of all State Medicaid Fraud Control Units (MFCU or Unit) and publishes periodic onsite review reports. In Medicaid New York State Medicaid Fraud Control Unit: 2011 Onsite Review, the New York MFCU filed criminal charges against more than 400 defendants, obtained more than 400 convictions, and was awarded more than $750 million in recoveries from fiscal years 2008 to 2010. Our review found a number of noteworthy practices, including the Unit's approach to patient abuse and neglect cases, its list of ongoing investigations (created to avoid conflicts among investigating agencies), and its use of technology. Our report includes findings and recommendations with respect to staff size, training, file maintenance, and policies and procedures.
The Administration for Families and Children (ACF) altered its FY 2011 triennial reviews to determine whether grantees kept on file the source documents proving children's eligibility and began performing unannounced reviews. ACF promulgated draft regulations that, once final, will require grantees to keep eligibility documents on file. We found in the memorandum report ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 that ACF was not consistent in issuing findings to grantees missing eligibility information in FY 2011 and that, in FY 2012, ACF took action to reduce this variation when issuing findings. Also, ACF developed an online complaint process for the Head Start program to capture complaints that could help the agency uncover problems with grantees. The review was a follow-up to Government Accountability Office (GAO) testimony at a May 2010 congressional hearing about potential eligibility fraud at eight Head Start grantees. At the same hearing, ACF committed to improving its oversight of eligibility. The report did not contain recommendations.