Despite the COVID-19 pandemic and continued sequestration of enforcement funds, the federal Health Care Fraud and Abuse Control Program (Program) reversed recent trends and recovered more money in FY 2020 than it had the year before. In fact, recoveries for the year reached nearly $3.1 billion, the highest return since 2016. Here’s a briefing for medical office managers on the July 14 OIG report and what it says about the current state of federal health care fraud enforcement.
ROI increases for second year in a row
The Program was created as part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) under the joint direction of the Attorney General and HHS Secretary, acting through the OIG, to coordinate federal, state and local law health care fraud and abuse enforcement activities. The Annual Report describes the Program’s financial performance in the previous fiscal year. While the narrative is somewhat helpful, the real value of these annual reports, at least from a compliance officer’s perspective, are the enforcement and recovery statistics. Tracking these numbers over a three-year period gives a good sense of the current energy and direction of federal fraud activity.
Among the most significant metrics in the annual report is Program ROI, which measures how much money the Program returns for every dollar invested. Program ROI is calculated by dividing the total monetary results to the federal government in judgments, sentences, settlements and other recoveries (not including relator payments in qui tam lawsuits) by the annual appropriation for the Program Account in a given year (not including portions of CMS funding dedicated to the Medicare Integrity Program). Because the annual ROI tends to vary from year to year depending on the number and type of cases that are settled or adjudicated during the year, DOJ and HHS use a three-year rolling average ROI for results contained in the report.
And since FY 2013 when ROI peaked at $8.10, ROI has been trending steadily down, with five consecutive years of decline. FY 2019 finally saw the losing streak come to an end, with ROI increasing from $4.00 to $4.20 in 2019. The upward movement continued this year, with the three-year rolling average ROI reaching $4.30 in FY 2020.
Annual Program ROI, FY 2013 to FY 2020 (3-Year Rolling Average)
| FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 |
| $8.10 | $7.70 | $6.10 | $5.00 | $4.20 | $4.00 | $4.20 | $4.30 |
By the Numbers
During FY 2020, the federal government won or negotiated nearly $3.1 billion ($3,075,834,684) in health care fraud judgments and settlements. That’s up from $2.6 billion in FY 2019, even though the number of convictions during the same period actually declined from 528 to 440. Civil actions, which have traditionally been the cash cow of federal health care fraud enforcement efforts, were up sharply in FY 2020, from 1,112 to 1,498, which portends higher recovery levels in the years ahead when these new actions yield judgments and settlements. However, exclusion numbers were fell off by nearly 25 percent to 2,148.
| Metric | FY 2020 | FY 2019 | FY 2018 |
| Total recoveries | $3.1 billion | $2.6 billion | $2.3 billion |
| New DOJ criminal health care fraud investigations | 1,148 | 1,060 | 1,139 |
| New DOJ Civil Health care fraud investigations | 1,498 | 1,112 | 918 |
| New Criminal cases filed | 578 | 485 | 572 |
| Convictions | 440 | 528 | 872 |
| Exclusions issued by OIG | 2,148 | 2,640 | 2,712 |
The increases in most of the enforcement metrics occurred even though sequestration reduced the enforcement funding available to the DOJ, FBI, HHS and OIG. A total of $11.0 million was sequestered from the Program in FY 2020, for a combined total of $150.6 million in mandatory funds sequestered in the past eight years. Including funds sequestered from the FBI ($70.0 million in the past eight years), $220.6 million has been sequestered from mandatory Program funds since FY 2013.
