The federal government brags a little bit in its first annual report on the impact of a new law on healthcare fraud.
But you would crow too if you had extracted $255 million from a home-care company after a seven-year investigation. That was just one of the fraud accomplishments cited in the report, which was released last week.
Thanks largely to the Health Insurance Portability and Accountability Act, which gave the government more money and more weapons to fight healthcare fraud, federal agencies saw the number of their anti-fraud activities spike upward in fiscal 1997.
HIPAA, passed by Congress in 1996 and effective Jan. 1, 1997, gave more than $530 million to government agencies in 1997 to combat healthcare fraud. Funding for fraud-fighting efforts will continue to increase over the next six years.
HIPAA also redefined the several crimes connected with healthcare delivery, making it easier for the government to prosecute or wring settlements from companies.
Some highlights from the report, presented jointly by the U.S. Justice Department and HHS, include:
Some 282 criminal indictments in healthcare fraud cases last year, a 15% increase compared with 1996.
Payments of $33.2 million to whistleblowers whose False Claims Act lawsuits were resolved.
A record-high 363 criminal fraud convictions, up 22% from 1996.
During the first full year HIPAA was in effect, HHS' inspector general's office settled charges with First American Home Health Care of Georgia, formerly ABC Home Health Services, for $255 million. The government alleged the company filed false Medicare cost reports and reports that included ghost employees, personal expenses and political contributions.
In another HHS case, Blue Shield of California, a former Medicare carrier, agreed to pay $12 million to settle charges it falsified claims processing data and capabilities. The company also pleaded guilty to conspiracy and obstruction of a federal audit, for which it was fined $1.5 million.
A total of 58,000 calls inundated the HHS' fraud hotline in 1997, or about 160 calls a day. More than 7,000 complaints came out of hotline tips, resulting in an additional $3 million in recoveries.
The Justice Department's civil division, which received $9.7 million as part of the HIPAA budget, also has kept busy. The nation's three largest independent clinical laboratories paid sizable civil settlements following Justice Department probes. Laboratory Corporation of America paid $173 million, Damon Labs paid $81 million, and SmithKline Beecham Clinical Labs paid $319 million to settle charges they routinely billed Medicare for medically unnecessary tests and tests physicians never ordered.
The department also settled kickback charges against OrNda HealthCorp, now part of Tenet Healthcare Corp, for $12.6 million, and Apria Healthcare Group for less than $2 million.
And the agencies say there's more to come. According to the report: "Many enforcement activities undertaken in 1997 will not result in collections until future years."