Federal fraud prosecutions jumped 69% in 2011
Shift in investigators’ tactics, evolution in technology seen as reasons
Government investigators say they are moving away from the old “pay-and-chase” model of healthcare fraud enforcement, but the new focus on preventing fraud before it happens is not cutting off the flow of new cases for prosecution.
An accounting of federal fraud cases based on Freedom of Information Act requests shows that 1,235 people were prosecuted for healthcare fraud in fiscal 2011—a record- shattering 69% increase over the prior year, according to the Transactional Records Access Clearinghouse project at Syracuse (N.Y.) University.
That tally includes 548 defendants charged in Puerto Rico, where the HHS inspector general’s office recently quadrupled its staff, growing its agent corps to nine from two. For comparison, the fraud hotbed of South Florida saw only 141 prosecutions in the same period, the TRAC project said.
Despite the fanfare accompanying high numbers of fraud cases and financial recoveries when government agencies roll them out, officials acknowledge that the trend still represents the traditional mindset of paying fraudsters and then chasing them with indictments to recover the money.
“The analogy I use is that we used to chase like an elephant, and now we chase like a cheetah,” said Timothy Menke, senior adviser for investigations at the HHS inspector general’s office and a former deputy inspector general for investigations.
Behind the scenes, officials with the inspector general’s office and the CMS say they are in the midst of a technological revolution in which real-time, automated data analysis is supplanting the old system of chasing down tips and allegations with feeton-the-ground police work. Central to that new approach is the CMS’ recent efforts to centralize all of its data.
Today, all 4.5 million daily claims for Medicare reimbursements are digitally analyzed in near-real time and then assigned a risk score, using a system rolled out last year and recently dubbed the CMS’ Fraud Prevention System.
Peter Budetti, deputy administrator for program integrity at the CMS, said analysts and systems then scour the risk scores for patterns, such as suppliers or providers frequently linked to Medicare claims with high fraud-risk scores. That data is then passed on to Medicare’s array of fraud-prevention contractors and to the new federal Medicare fraud strike forces, which can quickly cut off Medicare funds if they find evidence of credible allegations of fraud.
The nine HEAT Strike Task Forces, based in fraud hot spots such as Los Angeles, Miami, Chicago, Dallas and Detroit, were responsible for much of the increased prosecution activity last year. Menke said $225 million of the $406 million that the inspector general’s office reported as “investigative receivables” from comparable cases in 2011 came from the work of the strike forces.