HealthCare Law Update: 2016 Fraud and Abuse Control Program Report

Monday, May 15, 2017

Background: The national Health Care Fraud and Abuse Control Program was established by The Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Program, co-managed by the Department of Justice (DOJ) and the Secretary of the Department of Health and Human Services (HHS), conforms federal, state and local law enforcement resources for healthcare fraud and abuse compliance and enforcement.

In January 2017, the federal government issued the Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2016. The report outlines the federal government’s law enforcement efforts to prosecute healthcare fraud, prevent future fraud and abuse, and protect federal program beneficiaries. The monetary results in the report reveal the federal government secured more than $2.5 billion in healthcare fraud judgments and settlements in 2016. The report details the program’s enforcement actions. In total, the DOJ opened over 1,900 new criminal and civil healthcare fraud investigations with more than 1,400 civil healthcare fraud matters pending at the end of the fiscal year. In 2016, federal prosecutors pursued criminal charges in 480 cases involving 802 defendants, resulting in more than 650 convictions.

According to the report, “Investigations conducted by the HHS’ Office of Inspector General (HHS-OIG) resulted in 765 criminal actions against individuals or entities engaged in crimes related to Medicare and Medicaid, and 690 civil actions, including false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties (CMP) settlements and administrative recoveries related to provider self-disclosure matters. HHS-OIG excluded 3,635 individuals and entities from participation in Medicare, Medicaid and other federal healthcare programs.” Seeking to move away from “pay and chase” policies in favor of preventing inappropriate reimbursement, Congress, last year, mandated the Health Care Fraud and Abuse Control Program focus on identifying fraud and abuse before payments are issued. In response, the federal government is turning to new methods in an increased effort to detect violations and prevent waste, fraud and abuse. As a result, data mining, predictive analytics, trend analysis and advanced modeling techniques are being used by the DOJ and HHS to identify out-of-norm claim submissions and known fraud patterns, and calculate ratios of allowed services compared to national averages. Increased electronic health record and billing data capture, data sharing technology, and improved analytic methods and tools will lead to more complex data analytics. This will improve the delivery of critical data and information into the hands of law enforcement to track patterns of fraud and abuse and increase efficiency in investigating and prosecuting complex healthcare fraud cases.

Clearly, participants in any federal healthcare program must understand the federal government is committed to aggressively combatting healthcare fraud and abuse, and take affirmative steps to ensure their business practices operate in strict compliance with the law. HHS provides an excellent overview (Avoiding Medicare Fraud & Abuse: A Roadmap for Physicians) to help physicians understand how to comply with federal laws by identifying “red flags” that could lead to potential liability in criminal, civil and administrative enforcement actions. It may be accessed at

Next Month: The “Yates Memo” and Individual Accountability for Corporate Wrongdoing

E. Patrick Magallanes, MBA, MPA, CPPM, FACHE (March 2018) is CEO of Oncology San Antonio and a J.D. Candidate at St. Mary’s University School of Law. Keenly interested in health law subjects, Magallanes is the founding member of the St. Mary’s Health Law Society. He is a student member of the American Health Lawyers Association and the San Antonio Bar Association Health Law Section and intends to practice corporate and health law. Magallanes can be reached at