Every year, the Department of Justice (DOJ) and the Department of Health and Human Services Office of the Inspector General (OIG) report the results of their fraud prevention and recovery efforts to Congress.  As recounted in the recently released Health Care Fraud and Abuse Control Program (HCFAC) report, the overall amount recovered in FY 2014 was $1 billion less than what the agencies reported in 2013 ($4.3 billion).  Nevertheless, the report touted the $2 increase in the return on investment from DOJ and OIG’s fraud and abuse investigations overall (from $5.70 to $7.70).  The HCFAC report shows that, despite losing $62.1 million in funding beginning in FY 2013 due to sequestration, both DOJ’s and OIG’s antifraud work remains potent  and is growing more sophisticated.

Here is an overall comparison of the FY 2014 and FY 2013 reports:

DOJ Activities FY 2013 FY 2014
New Criminal Investigations 1,013 924
New Civil Investigations 1,083 782
Health Care Fraud Convictions 718 734
Total Allocation $573,667,581 $571,702,217


OIG Activities FY 2013 FY 2014
New Criminal Actions 849 924
New Civil Actions 458 529
Individuals Excluded from Federal Health Care Programs 3,214 4,017
Total Allocation $487,381,848 $485,824,633

The above charts show that the OIG became more active in FY 2014 despite funding cuts.  In a similar vein, DOJ maintained nearly equal levels of criminal investigations and convictions in the two relevant years.  The agencies are learning to do just as much with fewer resources.

DOJ and OIG are increasingly focused on detecting improper billing schemes and halting payments before alleged fraudsters can abscond with valuable health care program funds.  Specifically, the Centers for Medicare & Medicaid Services (CMS) completed its provider revalidation efforts mandated by the Affordable Care Act, using its enhanced screening requirements to deactivate nearly a third (470,000) of the 1.5 million existing Medicare providers numbers and to revoke 28,000 provider enrollments outright.  And true to its promises, CMS leveraged the predictive analytics developed within the Fraud Prevention System (FPS) authorized under the Small Business Jobs Act of 2010 to prevent an estimated $210.7 million in payments for improper claims.  CMS asserted that this was nearly twice the savings identified during the FPS’s first year in FY 2013 and represented a more than $5 to $1 return on investment.

It is apparent that the health care fraud enforcement agencies are looking to data mining and other such tactics to address tightening fiscal controls on fraud-fighting efforts.  But data-driven investigations may create unique problems for health care providers who have to respond to further inquiries from agencies, especially because targeted data does not always lead to targeted investigations.  For instance, depending on how much data enforcement agencies are willing to share, health care entities under investigation may open themselves to further scrutiny if they believe the government is looking at broader issues than it is investigating.  In addition, data mining could make CMS more aggressive in seeking payment suspensions against entities, which can catch health care providers unawares and significantly impact their cash flows.

Based on the still-increasing numbers of enforcement actions, now, more than ever, it is important for health care providers to understand the data-driven investigation efforts being used by fraud and abuse enforcement agencies.  In doing so, health care providers can more effectively predict and address their areas of weakness and efficiently respond to any inquiries that they receive.