OIG Official: Fighting Fraud is Critical to Healthcare Reform

Kristen Kohrt , April 22, 2009

Office of Inspector General Chief Counsel Lewis Morris stressed to the Senate Finance Committee this week the ongoing urgent need to fight healthcare fraud, waste, and abuse in order to foster the healthcare reform the SFC is working toward.

Morris made the statement on behalf of the OIG April 21 during the first of three SFC roundtable discussions on healthcare reform.

"Regardless of the structure of healthcare reform, detecting and preventing waste, fraud, and abuse in the healthcare system is critical," he said.

The U.S. spends more than $2 trillion on healthcare annually, Morris pointed out. The National Health Care Anti-Fraud Association estimates conservatively that 3%—or more than $60 billion—is lost to fraud, he said. More specifically, Morris said in fiscal year 2008:

  • The government won or negotiated approximately $2.35 billion in investigative receivables, including criminal, civil, and administrative settlements or civil judgments. The government's enforcement efforts resulted in 455 criminal actions and 337 civil actions against individuals or entities that engaged in healthcare-related offenses.
  • The OIG opened 1,750 new healthcare fraud investigations and had more than 2,500 healthcare investigations open at the end of fiscal year 2008.
  • The OIG excluded 3,129 individuals and entities from participating in Medicare, Medicaid, and other federal healthcare programs. Most of these exclusions stemmed from convictions for crimes regarding Medicare/Medicaid, patient abuse or neglect, or as a result of license revocation.

Morris also emphasized the progress the OIG has made in the past couple of years investigating cases of fraud and abuse. Since fiscal year 2006, the OIG's investigative receivables averaged $2.04 billion and its audit disallowances resulting from Medicare and Medicaid oversight averaged $1.22 billion per year. This gave Medicare and Medicaid a return on investment for OIG oversight of $17:$1. The OIG also implemented recommendations with providers that resulted in $16.72 billion in savings and funds put to better use, Morris said.

While the OIG is successful, looming budget cuts could jeopardize the fight against fraud and abuse. The SFC needs to continue to fund enforcement efforts as a part of healthcare reform, says James Kopf, former director of program investigation for the OIG, and president of Healthcare Oversight in New Canaan, CT.

"It's been an ongoing battle," he says. "We have to stay vigilant. We have to set up new ways of detecting (fraud and abuse). We have to go after actual criminals because they've changed their tactics."

Increasing the efficiency of the enforcement process could help government agencies in their efforts, he said. For example, setting up a national data bank similar to the FBI's National Criminal Information Center could speed up the investigation process and also help prevent further crimes, Kopf said.

Kristen Kohrt is the associate editor for Healthcare Auditing Strategies and Healthcare Auditing Weekly, and manages the Healthcare Auditing Resource Center. You can contact her at kkohrt@hcpro.com.

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