Taxpayers Could See More than $4.4 Billion Returned to Treasury Plus Billions in Estimated 2017 Savings from OIG Recommendations

Washington, DC—America's taxpayers could see $4.4 billion in misspent Medicare, Medicaid, and human service program dollars returned to the Treasury as the result of work by the Department of Health and Human Services (HHS) Office of Inspector General (OIG), according to a recently released report.

Third parties, such as the Congressional Budget Office, estimated FY 2017 HHS program savings supported by OIG recommendations amounted to tens of billions. (As some savings estimates need to be recalculated, a precise number is not available. See Report Appendix B.)

The Semiannual Report to Congress summarizes OIG activities for the last half of FY 2017 (April 1, 2017-September 30, 2017), and some achievements for the full year.

"We continue to cultivate a workforce with the skills and talents to excel in data-driven oversight," observed HHS Inspector General Daniel R. Levinson. "By leveraging advanced analytic techniques to detect potential vulnerabilities and fraud trends, we are better able to target our resources at those areas and individuals most in need of oversight, leaving others free to provide care and services without unnecessary disruption."

Of the billions of dollars in savings and recoveries, the report shows that for FY 2017, some $296.4 million would be returned based on program audit findings (6-month return) and about $4.1 billion in "investigative" receivables for the full year. Investigative receivables include expected recoveries from criminal actions, civil and administrative settlements, civil judgments, and administrative actions by OIG.

In FY 2017, OIG brought criminal actions against 881 individuals or organizations engaging in crimes against HHS programs and the beneficiaries they serve, and an additional 826 civil actions, including false claims and unjust-enrichment lawsuits filed in Federal district court, civil monetary penalty settlements, and administrative recoveries related to provider self-disclosure matters.

The agency also excluded 3,244 individuals and entities from participation in Federal health care programs.

OIG remains at the forefront of the Nation's efforts to fight fraud in HHS programs and hold wrongdoers accountable for their actions. Not only does fraud increase HHS costs, it increases risk and potential harm to beneficiaries.

In July 2017, OIG and its law enforcement partners executed the largest national health care fraud takedown in history. More than 400 defendants in 41 Federal districts were charged with participating in fraud schemes involving about $1.3 billion in false billings to Medicare and Medicaid. That national takedown included the largest number of opioid-related defendants ever. Opioid-related charges were brought against 120 individuals-including 27 doctors. In addition, OIG issued 295 exclusion notices related to the use and abuse of controlled substances.

In a high profile report, OIG identified concerns about extreme use and questionable prescribing of opioids in Medicare Part D. In 2016, half a million beneficiaries received high amounts of opioids through Medicare Part D, and almost 90,000 of them were at serious risk of opioid misuse or overdose. Moreover, 401 prescribers had questionable prescribing patterns for the beneficiaries at serious risk. OIG and the Centers for Medicare & Medicaid Services (CMS) are taking appropriate actions with respect to these prescribers. (See OIG's report, OEI-02-17-00250.)

In two other important OIG actions:

Mylan Inc. and Mylan Specialty L.P. (collectively, Mylan) agreed to pay $465 million to resolve False Claims Act liability associated with allegations that Mylan improperly classified EpiPen as a generic drug for purposes of the Medicaid drug rebate program, resulting in underpaid rebates to Medicaid and overcharges to covered entities participating in the 340B Drug Discount Program. Mylan also entered into a 5-year corporate integrity agreement (CIA) with OIG.

eClinicalWorks, LLC (ECW), and three of its senior executives agreed to pay $155 million for allegedly causing health care providers to submit false claims in connection with the Medicare and Medicaid Electronic Health Record Incentive Programs by concealing from ECW's customers that ECW's software did not comply with the requirements for "meaningful use" certification. ECW also entered into a 5-year CIA with OIG.

Additional highlights of OIG Work in the FY 2017 Semiannual Report include:

OIG initiated enhanced efforts to maximize the effectiveness of Medicaid Fraud Control Units (MFCUs), which play a primary role for Medicaid in investigating and prosecuting provider fraud as well as patient abuse or neglect in health care facilities. OIG collaborates with the MFCUs on joint cases and investigative initiatives and has oversight responsibility for MFCU operations. Supporting MFCU effectiveness is one of OIG's top priorities. During the semiannual reporting period, OIG piloted a new risk-based onsite review process, provided training for MFCU managers and staff, and partnered with 31 MFCUs in the July 2017 national health care fraud takedown.

OIG's review of records from emergency room visits by Medicare beneficiaries residing in skilled nursing facilities indicates that the injuries of 134 beneficiaries may have resulted from potential abuse or neglect. More than a quarter of these incidents may not have been reported to law enforcement at the time. OIG has referred all 134 incidents to appropriate law enforcement officials and CMS and suggested immediate actions for CMS to better protect beneficiaries. (See OIG's early alert, A-01-17-00504.)

In an audit of Medicare electronic health records (EHR) incentive payments, OIG estimated that CMS paid $729.4 million to providers who did not meet Federal requirements for meaningful use. CMS also made $2.3 million in incentive payments for the wrong payment year when providers switched between incentive programs. (See OIG's report, A-05-14-00047.)

Maine failed to demonstrate that it has a system to ensure the health, welfare, and safety of its beneficiaries with developmental disabilities who are covered by its Medicaid waiver program. OIG found—among other problems—that Maine did not ensure that providers reported and reviewed all critical incidents; did not investigate and immediately report to law enforcement all incidents involving suspected abuse, neglect, or exploitation; and did not ensure appropriate reporting, analysis, and investigation of all beneficiary deaths. (See OIG's report, A-01-16-00001.)

Limitations in claims data impede CMS's ability to readily identify and effectively track Medicare's total costs related to the replacement of devices that were recalled or that failed prematurely. We estimated these costs totaled $1.5 billion for Medicare and $140 million for beneficiaries over the 10-year period ending on December 31, 2014, for seven recalled and prematurely failed cardiac devices.

By including medical device-specific information on the claim forms, CMS could reduce Medicare and beneficiary costs by identifying poorly performing devices more quickly, which could also improve beneficiaries' chances of receiving appropriate follow-up care more quickly. (See OIG's report, A-01-15-00504.)

OIG found that the Medicare Shared Savings Program (MSSP) shows potential to reduce spending and improve quality. Most Accountable Care Organizations (ACOs) in the MSSP were able to reduce spending and improve quality of care during the first 3 years of the program. A small subset of these ACOs showed substantial reductions in Medicare spending for key services. (See OIG's report, OEI-02-15-00450.)

OIG identified continued concerns about national Medicaid data. Complete, accurate, and timely national data are essential for effective administration and oversight of Medicaid; however, OIG identified continued concerns with the national Medicaid database known as T-MSIS. States and CMS reported challenges to States' submitting data to T-MSIS, CMS has postponed reporting deadlines multiple times, and CMS and States reported concerns about the completeness and reliability of submitted data. (See OIG's report, OEI-05-15-00050.)