Inspector General: Audits, Legal Actions May Net Up to $3.4 Billion

The Office of Inspector General (OIG), Department of Health & Human Services (HHS), today announced $3.4 billion in new expected recoveries (in accounting terms "receivables") related to its investigations, audits, and other reviews, mainly of Medicare and Medicaid. These expected recoveries are largely made up of restitutions, fines, penalties, other assessments, and settlements. This announcement was made in connection with presenting OIG's Semiannual Report to Congress for October 2010 through March 2011.

The expected recoveries include about $222 million from audits and $3.2 billion arising from 349 criminal and 197 civil actions that were concluded during the period. OIG also excluded 883 individuals and entities from participating in Federal health care programs during the same time frame.

"This has been a period of intense activity," said Inspector General Daniel R. Levinson. "We're proud that broad collaboration with law enforcement agencies at all levels resulted in so many arrests and exclusions. It's all part of protecting Medicare and Medicaid, and returning to taxpayers the money stolen from those programs."

OIG's Semiannual Report to Congress highlighted the following:

More than 100 suspects arrested in an unprecedented health care fraud takedown.
In February 2011, more than 300 OIG special agents participated in Medicare Strike Force teams across the country. They arrested more than 100 defendants in nine cities. The arrests included doctors, nurses, health care company owners and executives, and others, for their alleged participation in Medicare fraud schemes involving more than $225 million in false billing. The defendants are accused of various health-care-related crimes such as violating the anti-kickback statute, money laundering, and aggravated identity theft. OIG collaborated with the Department of Justice, the Centers for Medicare & Medicaid Services, State Medicaid Fraud Control Units, other Federal OIGs, State agencies, and local enforcement entities.

Two drug companies settled false claims, marketing, and other alleged violations.
GlaxoSmithKline LLC agreed to pay $750 million, including criminal fines, to resolve charges that a now-closed subsidiary manufactured, distributed, and sold drugs that had higher or lower amounts of specified ingredients or that were nonsterile or contained microorganisms. A second company, Allergan, Inc. and Allergan USA, Inc. (collectively, Allergan), agreed to pay $600 million to resolve allegations that it promoted the sale and use of the drug Botox for a variety of conditions that were not approved by the Food and Drug Administration, misled physicians about drug safety and efficacy, instructed the miscoding of claims, and paid illegal remuneration to health care professionals as inducements.

Medicare losing out on hundreds of millions in investment income.
OIG found that the Medicare program is losing potential savings associated with the investment income that Medicare Advantage (MA) organizations earn between the time they receive Medicare prepayments and the time the MA organizations pay for medical services. By adjusting the timing of payments to Medicare Advantage Plans, OIG said Medicare potentially could earn hundreds of millions of dollars annually. Full Report

Medicare and its beneficiaries at risk of overpaying for Part D drug coverage.
OIG found that Part D sponsors underestimated rebates in 69 percent of their bids for plan year 2008, leading to higher beneficiary premiums and causing beneficiaries and the Government to overpay for the benefit. Although the Government recoups some of the overpayments, beneficiaries do not. Full Report

Patient safety and quality of care at hospitals troubling.
OIG reported that of the nearly 1 million Medicare beneficiaries discharged from hospitals in October 2008, about 1 in 7 (13.5 percent) experienced adverse events during hospital stays. About 44 percent of the events were preventable, commonly caused by medical errors, substandard care, and inadequate patient monitoring and assessment. Full Report

OIG launches provider compliance training, new physician guidance, and fugitives list.
To help prevent health care fraud and improve compliance, OIG launched in February a series of provider compliance training sessions in cities across the country. The initiative provides free, high-quality compliance training sessions for medical providers and suppliers, compliance professionals, and attorneys. Representatives from OIG, the Department of Justice, the Centers for Medicare & Medicaid Services, and State Medicaid Fraud Control Units conduct the training events. Also, OIG published on its Web site antifraud guidance to new physicians called A Roadmap for New Physicians and a Most Wanted Fugitives list , which led to the capture of four individuals.