Background

The Medicare Fraud Strike Force was originally established in 2007 in Miami – an area referred to as ground zero for health care fraud. The Miami model was so successful that the strike force expanded to more cities which include:³

• Baton Rouge, LA
• Brooklyn, NY
• Chicago, IL
• Dallas, TX
• Detroit, MI
• Houston, TX
• Los Angeles, CA
• Tampa Bay, FL

Data analysis has been the driver of these investigations. The first task force was formed in Miami after computers detected an abnormally large number of claims for medical equipment, such as scooters.⁴ The Miami strike force targeted “home health care services” after the computer analysis showed one of every 15 Medicare dollars for home care nationwide was being spent in the Miami area.⁵ According to a DOJ spokeswoman, the federal government is prioritizing cities with higher numbers of billing anomalies, showing a potential for illegal activity.⁶

Just a couple of months after the establishment of this first strike force, DOJ announced 38 people had been arrested.⁷ In this first wave, teams identified two primary schemes to defraud Medicare – infusion therapy⁸ and durable medical equipment suppliers. Arrests and indictments were accompanied by seizures of assets. With the announcement of these arrests and the formation of the first strike force, DOJ stated the force is able to identify potential fraud cases for investigation and prosecution quickly through real-time analysis of billing data from Medicare Program Safeguard Contractors and claims data extracted from the Health Care Information System.⁹

Medicare Program Safeguard Contractors have responsibility for detecting and deterring fraud and abuse in Medicare. The Centers for Medicare & Medicaid Services (CMS) completed transfer of these responsibilities in 2006.¹⁰ Program Safeguard Contractors are tasked with identifying potentially fraudulent providers and conducting investigations to determine the facts and magnitude of alleged fraud and abuse.¹¹ According to the government, one of the reasons for delegating this responsibility to the private sector is to harness innovative and proactive data analysis. Program Safeguard Contractors are expected to cooperate with HHSOIG and other law enforcement agencies. The incentive to proactively find anomalies in billings is great considering a Program Safeguard Contractor will receive more work from the government if it initiates successful investigations.

Along with the formation of strike forces, the government is continuously improving upon its tools to analyze data more efficiently and rapidly. In November 2007, for example, the FBI, IRS, and DOJ began to use a subpoena attachment that allowed for the production of financial information sought in electronic format to allow for quicker and easier analysis.¹² Using more technology, the strike force can identify Medicare irregularities faster – completing in days what used to take months.

With the formation of the first strike force, DOJ reported that the strike force teams are led by a federal prosecutor supervised by both the Criminal Division’s Fraud Section in Washington and the local office of the United States Attorney.¹³ Each team has four to six agents, at least one agent from the FBI and HHS Office of Inspector General, as well as representatives of local law enforcement.¹⁴

In addition to the formation of strike forces, in May 2009, HHS and DOJ created the Health Care Fraud Prevention and Enforcement Action Team (HEAT).¹⁵ HEAT’s mission according to the HHS website includes cracking down on people who abuse the system and highlighting best practices to be used by providers and organizations. According to HHS, HEAT actions have led to a 75% increase in individuals charged with criminal health care fraud.

Results

The strike force has produced results with the targets and prosecutions all having similarities. In recent years, the Medicare Fraud Strike Force charged close to 100 individuals each year nationwide according to the various news releases issued by DOJ. These individuals include doctors, nurses, and health care company owners and executives who are charged for their alleged participation in Medicare fraud schemes involving hundreds of millions of dollars in false billing. The charges typically include conspiracy to defraud Medicare, criminal false claims, violations of the anti-kickback statutes, money laundering, and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment, and ambulance services. Most often, the services billed were not medically necessary and/or were not provided.

In addition to arrests and prosecutions following strike force action, HHS has suspended or taken other administrative action against more providers following a data-driven analysis leading to credible allegations of fraud. Under the Affordable Care Act, HHS has the authority to suspend payments to a provider when there is a “credible allegation of fraud” until the resolution of an investigation.¹⁶

In October 2012, $430 million worth of false billing charges were brought, which was comprised of more than $230 million in home health care fraud; more than $100 million in mental health care fraud, and more than $49 million in ambulance transportation fraud; and millions more in other frauds.¹⁷ According to DOJ, more than 500 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown.¹⁸

According to a press release issued in December 2013, the Medicare Fraud Strike Force has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.¹⁹ The federal government is also using tools authorized by the Affordable Care Act to fight fraud, as noted above, including increased data sharing across the government and expanded recovery efforts for overpayments and greater oversight of private insurance abuses.²⁰

The largest case brought against a single physician to date is the case against Dr. Jacques Roy in Texas.²¹ He, along with his office manager and five owners of home health agencies, is accused of bilking Medicare and Medicaid of nearly $375 million from 2006 through November 2011.²² In addition to the indictments, CMS suspended an additional 78 home health agencies associated with Roy based on credible allegations of fraud against them.²³ The alleged fraud was discovered by data analysis – specifically, the fact that the association owned by Dr. Roy certified more Medicare beneficiaries for home health services and had more purported patients than any other medical practice in the United States during the above time period. “Using sophisticated data analysis we can now target suspicious billing spikes,” said HHS Inspector General Daniel R. Levinson. “In this case, our analysts discovered that in 2010, while 99 percent of physicians who certified patients for home health signed off on 104 or fewer people – Dr. Roy certified more than 5,000.”²⁴ Trial is currently set for June 23, 2014.²⁵

According to the FBI’s report on Financial Crimes for 2010-2011, Medicare and Medicaid are the most visible health care programs subject to fraud.²⁶ The fact that people are now living longer will produce a greater demand for Medicare benefits. As a result, utilization of long and short term care facilities such as skilled nursing, assisted living, and hospice services will expand in the future.²⁷ Recently, the owner of a Miami health care company was sentenced to 235 months in prison for her participation in a $7 million health care fraud scheme following investigation by the FBI and HHS-OIG as part of the Medicare Fraud Strike Force.²⁸ Dora Moreira was convicted by a jury of one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and receive and pay health care kickbacks, one count of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering, and five counts of money laundering.²⁹

According to the government, Moreira billed Medicare for services not medically necessary and/or not provided.³⁰ She paid kickbacks and bribes to patients, interacted with patient recruiters, and oversaw the submission of fraudulent claims.³¹

The FBI continues to identify and analyze industry fraud trends through input from private and public health care program experts. Present areas of concern include DME, hospital fraud, physician fraud, home health agencies, beneficiary-sharing, chiropractic, pain management, associated drug diversion, physical therapists, prescription drugs, multidisciplinary fraud, and identity theft which involves physician identifiers used to fraudulently bill government and private insurance programs.³²

As part of their national strategy, and not just the work of the strike force, the FBI cooperates with DOJ and various United States Attorneys’ Offices throughout the country to pursue offenders through parallel criminal and civil remedies.³³ According to the FBI, these cases typically target large-scale medical providers, such as hospitals and corporations, which engage in criminal activity and commit fraud against the government.³⁴ Emphasis is placed on recovering the illegal proceeds of these schemes through seizure and forfeiture proceedings as well as substantial civil settlements.³⁵ Upon successful conviction, the FBI provides information to various regulatory and state agencies to assist them in seeking to exclude convicted medical providers from further participation in the Medicare and Medicaid health care systems.³⁶

The FBI states that it has more than 500 agents and analysts using intelligence and data to uncover health care fraud schemes and collecting evidence through undercover operations and wiretaps.³⁷ Following more strike force arrests, HHS-OIG Deputy Inspector General Cantrell stated: “the Office of Inspector General is committed to the strike force model and will continue to use advanced data analytics along with traditional investigative methods to root out those who steal from our Medicare program.”³⁸

[1] See e.g.www.stopmedicarefraud.gov, sponsored by the U.S Department of Health & Human Services and the U.S. Department of Justice.

[2] Id.

[3] Id.

[4] Horswell, Cindy, “Feds Strike at Medicare Fraud in Houston Area,” Houston Chronicle, July 11, 2009. Available at http://www.chron.com/news/houstontexas/article/Feds-strike-at-Medicare-fraud-in-Houston-area-1728261.php. Last accessed February 7, 2014.

[5] Id.

[6] Id.

[7] U.S. Department of Justice, “Strike Force Formed to Target Fraudulent Billing of Medicare Program by Health Care Companies”, May 9, 2007, Available at http://www.justice.gov/opa/pr/2007/May/07_ag_339.html. Last accessed February 7, 2014.

[8] Typically, “infusion therapy” means that a drug is administered intravenously, but the term may also refer to situations where drugs are provided through other non-oral routes.

[9] U.S. Department of Justice, “Strike Force Formed to Target Fraudulent Billing of Medicare Program by Health Care Companies”, May 9, 2007, Available at http://www.justice.gov/opa/pr/2007/May/07_ag_339.html. Last accessed February 7, 2014.

[10] Department of HHS, Office of Inspector General. (July 2007). Medicare’s Program Safeguard Contractors: Activities to Detect and Deter Fraud and Abuse.

[11] Id.

[12] DOJ, FBI Financial Crimes Section, Criminal Investigative Division. Financial Crimes Report to the Public, Fiscal Years 2010-2011.

[13] U.S. Department of Justice, “Strike Force Formed to Target Fraudulent Billing of Medicare Program by Health Care Companies”, May 9, 2007, Available at http://www.justice.gov/opa/pr/2007/May/07_ag_339.html. Last accessed February 7, 2014.

[14] Id.

[15] See U.S. Department of Health and Human Services, “HEAT Task Force”, Available at http://www.stopmedicarefraud.gov/aboutfraud/heattaskforce/. Last accessed February 7, 2014.

[16] Patient Protection and Affordable Care Act, Section 6402(h).

[17] U.S. Department of Justice, “Medicare Fraud Strike Force Charges 91 Individuals for Approximately $430 Million in False Billing”, October 4, 2012, Available at http://www.justice.gov/opa/pr/2012/October/12-ag-1205.html. Last accessed February 7, 2014.

[18] Id.

[19] U.S. Department of Justice, “Health Care Clinic Owner Sentenced for Role in $7 Million Medicare Fraud Scheme”, December 19, 2013, Available at http://www.justice.gov/opa/pr/2013/December/13-crm-1337.html. Last accessed February 7, 2014.

[20] U.S. Department of Justice, “Departments of Justice and Health and Human Services Announce Record-Breaking Recoveries Resulting from Joint Efforts to Combat Health Care Fraud”, February 11, 2013, Available at http://www.justice.gov/opa/pr/2013/February/13-ag-180.html. Last accessed February 7, 2014.

[21] See United States v. Roy, et al., No. 3:12-cr-54 (ND TX).

[22] U.S. Department of Justice, “Dallas Doctor Arrested For Alleged Role in Nearly $375 Million Health Care Fraud Scheme”, February 28, 2012, Available at http://www.justice.gov/opa/pr/2012/February/12-crm-260.html. Last accessed February 7, 2014.

[23] Id.

[24] Id.

[25] See United States v. Roy, et al., No. 3:12-cr-54 (ND TX).

[26] DOJ, FBI Financial Crimes Section, Criminal Investigative Division. Financial Crimes Report to the Public, Fiscal Years 2010-2011.

[27] Id.

[28] See United States v. Moreira et al., 1:13-cr-20298 (SD FL).

[29] Id.

[30] U.S. Department of Justice, “Health Care Clinic Owner Sentenced for Role in $7 Million Medicare Fraud Scheme”, December 19, 2013, Available at http://www.justice.gov/opa/pr/2013/December/13-crm-1337.html. Last accessed February 7, 2014.

[31] Id.

[32] DOJ, FBI Financial Crimes Section, Criminal Investigative Division. Financial Crimes Report to the Public, Fiscal Years 2010-2011.

[33] Id.

[34] Id.

[35] Id.

[36] Id.

[37] Federal Bureau of Investigation, “Historic Medicare Fraud Strike Force Takedown”, May 2, 2012, Available at http://www.fbi.gov/news/news_blog/strike-force-takedown-050212. Last accessed February 7, 2014.

[38] U.S. Department of Justice, “Medicare Fraud Strike Force Charges 107 Individuals for Approximately $452 Million in False Billing”, May 2, 2012, Available at http://www.justice.gov/opa/pr/2012/May/12-ag-568.html. Last accessed February 7, 2014.

Finis