OIG Reports $5 Billion in Expected Investigative Recoveries for FY 2019

Topics: Financial Crime, Fraud, Government, Government Fraud, Medicare Fraud


In its recent Semiannual Report to Congress, the Office of Inspector General (OIG) for the Department of Health and Human Services reported expected investigative recoveries for FY 2019 of $5.04 billion.

During the fiscal year, the OIG said it also initiated 809 criminal actions and 695 civil actions. It also excluded 2,640 individuals and entities from participating in federal healthcare programs.

In this six-month reporting period, the OIG issued 91 audit reports and 36 evaluation reports. The audit reports identified more than $320 million in expected recoveries and more than $666 million in questioned costs. The OIG also reported that its investigative work in this reporting period led to $2.74 billion in expected investigative recoveries and 388 criminal actions. It also took civil actions against 364 individuals and entities, as well as excluding 1.347 individuals and entities in this reporting period.

According to the report, Medicare spent nearly $741 billion and provided health coverage to nearly 60 million beneficiaries in 2018. Additionally, approximately 73 million people received care through Medicaid at a cost of $560 billion per year.

Enforcement Efforts Against Fraud & Abuse

Under Operation Brace Yourself, the OIG and other law enforcement agencies stopped a healthcare fraud scheme involving more than $1.2 billion in losses. In the wide-ranging scheme, medical professionals and fraudulent telemedicine companies received illegal kickbacks and bribes from medical equipment companies in exchange for prescribing medically unnecessary orthotic braces. The medical equipment companies used these prescriptions to fraudulently bill Medicare. The enforcement action resulted in charges against 24 defendants in 17 federal districts.

In a multidistrict effort, the OIG and other federal and state agencies stopped a scheme involving cancer-related genetic tests that was one of the largest healthcare fraud schemes ever uncovered. The 35 defendants were charged with the payment of illegal kickbacks and bribes as well as fraudulently billing Medicare more than $2.1 billion.

In another scheme that involved the payment of bribes to a state regulatory agency for advance notice of surprise inspections, two Florida residents were convicted of submitting $1.3 billion in fraudulent claims. According to the allegations, the leader of the scheme bribed physicians to admit patients into care facilities he owned and then “cycled” those patients through other facilities in his network. The facilities were in poor condition and provided inadequate care, information concealed by the advance notice of inspections. The allegations also claimed the facilities billed for services and prescription drugs that were unnecessary or never provided. The leader of the scheme was sentenced to 20 years in prison and his accomplices were sentenced to more than six years in prison.

Opioid Crisis Enforcement Highlights for this Report

In additional to its efforts against traditional fraud and abuse, the OIG also targeted providers who were contributing to the nation’s opioid crisis.

Working with other federal and state law enforcement agencies, the OIG brought charges against a total of 58 individuals in Texas for their involvement in a network of opioid “pill mill” clinics. The pill mill clinics caused a loss of $66 million to public and private insurers by diverting 6.2 million pills.

A pharmaceutical company entered into a $700 million False Claims Act settlement to resolve allegations that it was illegally marketing and promoting Suboxone, an opioid treatment drug. According to the allegations, the company was promoting Suboxone in an unsafe manner by making false claims to physicians prescribing it, state Medicaid agencies, and the U.S. Food and Drug Administration. The scheme was designed to not only increase sales but to also delay generic competition.

In addition to its enforcement efforts, the OIG also identified that some state Medicaid programs that were not adequately screening providers to prevent the enrollment of providers that may pose a risk of fraud. Further, it identified that some states were not adequately verifying beneficiary eligibility, which can also result in false claims against the state programs.

The OIG recommended that states increase the consistency and accuracy of their provider and beneficiary enrollment processes.