DOJ and HHS Announce Record-Breaking Recoveries in the HCFAC Report

Today, the US Department of Health and Human Services (HHS) in conjunction with the Department of Justice (DOJ) released the Health Care Fraud and Abuse Control (HCFAC) program annual report for fiscal year (FY) 2012.

The following are highlights from the report:


  • As a result of current year and prior year efforts in health care fraud judgments, settlements, cases and proceedings a record $4.2 billion was deposited with the Department of Treasury and the Centers for Medicare and Medicaid Services (CMS) in FY 2012 from individuals and companies who attempted to defraud federal health programs.
  • Total expenditures allocated to the HHS and the DOJ in FY 2012 were $604.6 million.  (This amount only represents those that are provided by statute, and do not include other mandatory sources or discretionary appropriated sources provided through Departments’ annual appropriations.)
  • Since 1997, the HCFAC program has returned more than $23 billion to the Medicare Trust Funds.
  • The report shows that the average recovery, for the last 3 years, was $7.90 for every dollar spent on health care related fraud and abuse investigations.  (While all mandatory HCFAC account funding is included in the return-on-investment (ROI) calculation, only certain portions of discretionary HCFAC funding is included.)


  • The DOJ opened 1,131 new criminal health care fraud investigations, involving 2,148 potential defendants.
  • The DOJ opened 885 new civil health care fraud investigations and had 1,023 civil health care fraud matters pending at the end of FY 2012.
  • Federal prosecutors had 2,032 health care fraud criminal investigations pending, involving 3,410 potential defendants.
  • Federal prosecutors filed criminal charges in 452 cases involving 892 defendants.
  • A total of 826 defendants were convicted of health care fraud related items during the year.
  • The FBI health care investigations resulted in operational disruption of 329 criminal fraud organizations, and the dismantlement of the criminal hierarchy of more than 83 criminal enterprises engaged in health care fraud.
  • HHS Office of Inspector General (HHS/OIG) excluded 3,131 individuals and entities


  • The Medicare Fraud Strike Force (a team comprised of HHS and DOJ staff) coordinated a takedown in May 2012 that involved the highest number of false Medicare billings in the history of the strike force program.  The takedown involved 107 individuals, including doctors and nurses, in seven cities, who were charged for their alleged participation in Medicare fraud schemes, involving about $452 million in false billings.  As a part of takedown, HHS also suspended or took other administrative action against 52 providers using authority under the health care law to suspend payments until an investigation is complete.
  • In July, the HHS announced the launch of a ground-breaking partnership among the federal government, state officials, leading private health insurance organizations and other health care anti-fraud groups to share information and best practices to improve detection of and prevent payments to scams that cut across public and private payers.
  • CMS began the process of screening all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system that quickly identifies ineligible and potentially fraudulent providers and suppliers prior to enrollment or revalidation to verify the data.  As a result, nearly 150,000 ineligible providers have already been eliminated from Medicare’s billing system.
  • The DOJ’s Civil Division Fraud Section, with their colleagues in U.S. Attorneys’ offices throughout the country, obtained settlements and judgments of more than $3 billion in FY 2012 under the False Claims Act (FCA).  These matters included unlawful pricing by pharmaceutical manufacturers, illegal marketing of medical devices and pharmaceutical products for uses not approved by the Food and Drug Administration (FDA), Medicare fraud by hospitals and other institutional providers, and violations of laws against self-referrals and kickbacks
  • Additionally, the Civil Division’s Consumer Protection Branch, working with U.S. Attorneys’ offices, obtained nearly $1.5 billion in fines and forfeitures, and obtained 14 convictions in matters pursued under the Federal Food, Drug and Cosmetic Act.

The HCFAC program annual report for FY 2012 may be viewed at:

HC Healthcare Consulting staff includes certified coders, physicians, consultants Certified in Healthcare Compliance, CPAs, and a statistician that are available to provide expert assistance with your ongoing compliance programs.

DISCLAIMER:  This post contains only summary information and highlights; it should be read in conjunction with the full article or document provided as a link.  Any advice or recommendations given is general and specific questions should be directed to professional counsel.

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