In its Semiannual Report to Congress, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) reported that it expects investigatory recoveries of $1.46 billion for the reporting period of October 1, 2017, through March 31, 2018.
At the forefront of U.S. efforts to fight fraud in HHS programs, including Medicare and Medicaid, the OIG also reported:
- Criminal actions against 424 individuals and entities;
- Exclusion of 1,588 individuals and entities from federal healthcare programs; and
- Civil actions against 349 individuals or entities.
For the first half of FY 2017, the OIG reported more than $2.04 billion in expected recoveries, 468 criminal actions against individuals and entities, 1,422 exclusions of individuals and entities from participation in federal healthcare programs, and 461 civil actions.
OIG Enforcement Actions
The OIG highlighted two significant enforcement efforts for the first half of FY 2018.
The first highlight involved the owner of two defunct Miami home health agencies, Sila Luis, who was sentenced to 80 months in prison and was ordered, with her co-defendants, to pay $45 million in restitution following her conviction. Luis pleaded guilty to one count of conspiracy to commit healthcare fraud.
As part of her plea, Luis admitted to fraudulently billing Medicare for home healthcare services, including diabetic injections, skilled nursing visits, physical therapy, and other treatments and services. Luis also admitted that she and her co-conspirators paid kickbacks and bribes to patient recruiters in exchange for the referral of Medicare beneficiaries to their business. If Medicare had been aware that Luis and her co-defendants were paying kickbacks and bribes to recruit Medicare patients, the program would not have reimbursed them for any of the services those beneficiaries received.
At sentencing, the trial judge determined Luis was responsible for an intended loss of $74 million to the Medicare program.
The second highlight involved Maryland-based United Therapeutics Corporation, a pharmaceutical company that sells multiple hypertension drugs. In December 2017, United Therapeutics agreed to pay $210 million to resolve claims that it used a Section 501(c)(3) charitable foundation to pay the co-payments of Medicare patients taking its hypertension drugs.
Medicare beneficiaries are often charged a co-payment when they obtain prescription drugs covered by Medicare Part B or Part D. Under the Anti-Kickback Statute, pharmaceutical companies are prohibited from offering or paying, directly or indirectly, any remuneration to induce Medicare patients to purchase their drugs. Remuneration includes money or any other thing of value, such as paying a patient’s co-payment.
The Department of Justice (DOJ) alleged United Therapeutics routinely obtained data from the charitable foundation regarding how much the foundation had spent on co-payments for patients on drugs United Therapeutics sold. United Therapeutics then used this data to determine how much to donate to the foundation. The DOJ also alleged that United Therapeutics prevented needy Medicare patients from participating in its free drug program and instead referred Medicare patients to the foundation.
In addition to the $120 million settlement, United Therapeutics entered into a five-year corporate integrity agreement (CIA) with the OIG. In part, the CIA requires United Therapeutics to implement measures designed to ensure that its arrangements and interactions with third-party patient assistance programs comply with the law.
In addition to its criminal enforcement efforts, OIG program oversight includes provider audits to ensure “integrity, effectiveness, and efficiency.” In its Semiannual Report, the OIG reported expected audit recoveries of $187.5 million and $1.5 million in potential savings. The OIG highlighted its findings of improper claims for managed long-term care and improper electronic records incentive payments. Additionally, the OIG questioned $680 million in costs during this period.
Protecting the Integrity of Medicaid
The OIG also works to protect the integrity of the Medicaid program, making recommendations to the Centers for Medicare and Medicaid Services (CMS) and the states to correct problems and mitigate risks in the Medicaid programs. The OIG also works closely with state Medicaid Fraud Control Units (MFCUs) to fight Medicaid fraud. In its report, the OIG highlighted its findings on eligibility and payment rate issues.
The OIG identified that California and New York both failed to correctly determine Medicaid eligibility for newly eligible beneficiaries. Because of these issues, the OIG estimated that California made Medicaid payments of $738.2 million ($628.8 million federal share) on behalf of 366,078 ineligible beneficiaries and New York made $26.2 million in federal share payments on behalf of 47,271 ineligible beneficiaries.
The OIG also found that New Jersey did not follow federal regulations and CMS guidance in developing its Medicaid school-based services payment rates. As a result, New Jersey claimed $300.5 million in unallowable costs and an additional $306.2 million in reimbursement using payment rates developed with unsupported costs.
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