The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Congress Reacts to Largest Federal Healthcare Fraud Enforcement Action

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On Thursday, July 13, 2017, the Department of Justice (DoJ) announced in a press release the largest healthcare fraud enforcement action in its history.  Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced the takedown, in which over 412 individuals were found responsible for $1.3 billion in fraud losses. 

Among those charged for their alleged participation in healthcare fraud schemes involving false billings were 115 doctors, nurses and other licensed medical professionals.  The defendants were implicated in schemes to submit claims to Medicare, Medicaid and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for treatments that were medically unnecessary and often never provided.  Furthermore, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash payments in return for dispensing necessary beneficiary information to providers, who used the information to complete their fraudulent acts.

Another 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics, contributing to the opioid epidemic across the nation.  The charged individuals were engaged in schemes billing Medicare, Medicaid, and TRICARE for medically unnecessary prescription drugs and compound medications that patients had often never purchased, and never received.  

The unlawful distribution of opioids and other prescription narcotics by medical professionals is alarming, as the Centers for Disease Control and Prevention (CDC) reported that the number of overdose deaths involving opioids has more than quadrupled since 1999, and that, today, 91 Americans die daily from opioid overdose.  Healthcare fraudsters are not only stealing from tax payers, they are also catalyzing and enabling addiction.  Attorney General Sessions explained that, “[fraudulent medical professionals’] actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start.  The consequences are real: emergency rooms, jail cells, futures lost, and graveyards.”  For this reason, the Department of Justice is particularly focused on cracking down on medical professionals involved in the illicit distribution of opioids and narcotics.  Sessions vowed to continue to find and prosecute fraudsters and drug dealers.

The DoJ’s press release highlighted the significance of the number of medical professionals charged.  The DoJ explained that nearly every healthcare fraud plot requires a corrupt medical professional to participate in order for Medicare or Medicaid to pay the fraudulent claims.  By participating in healthcare fraud, medical professionals undermine taxpayers.  HHS Secretary Price called healthcare fraud, “an affront to all Americans who rely on our national healthcare programs for access to critical healthcare services and a violation of trust.”  The nation’s high-quality, affordable care is impacted every time a criminal commits healthcare fraud.

Secretary Price highlighted the Administration’s commitment to bring healthcare fraud criminals to justice.  In his 2017 budget request, President Trump called for a new $70 million investment in the Health Care Fraud and Abuse Control Program.  Price concluded, “historic results of this year’s national takedown represent significant progress toward protecting the integrity and sustainability of Medicare and Medicaid, which we will continue to build upon in the years to come.”

In addition, the HHS Office of the Inspector General recently testified that organized crime is becoming more involved in healthcare fraud.  Healthcare fraud is lucrative to crime syndicates because of the ease of entry into some sectors of the healthcare industry, the belief that it is less violent than other types of crime, such as drug trafficking, and the perception of minimal criminal penalties. 

Due to the increasingly disconcerting practice of healthcare fraud, Congress is taking decisive action.  U.S. Reps. Gus Bilirakis (R-Fla.) and Kathy Castor (D-Fla.) announced on July 18, 2017 that they had introduced the bipartisan Medicare Civil and Criminal Penalties Update Act, H.R. 3245.  This legislation cracks down on federal healthcare program fraud and abuse by increasing civil and criminal fines.  The bill takes the existing criminal and civil penalties in Medicare (Section 1128A & 1128B), and updates the penalties, many of which are 10, 20, and 30 years old.  By raising penalties and fines, Bilirakis and Castor hope to decrease healthcare fraud and protect tax payers and federal healthcare program beneficiaries.  The Council for Citizens Against Government Waste looks forward to the bill being signed into law.

  -- Mary Lee Deddens

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