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Special Report Paints Detailed Picture of the Fight Against Health Care Fraud in U.S., Commemorates 10th Year of Publication for BNA’s Health Care Fraud Report

NEWS RELEASE

Contacts:
Karen James Cody,
BNA - Press Contact

Washington, DC (March 14, 2007) – In the past 10 years, health care fraud enforcement has emerged as a top priority for federal and state governments and private insurers as national health care costs have soared and concerns about quality of care for beneficiaries have garnered attention. A decade of intensive health care program oversight has been facilitated by the provisions of the Health Care Insurance Portability and Accountability Act of 1996 (HIPAA), and subsequent directives in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the Deficit Reduction Act of 2005, and other statutes.

National trends in fighting health care fraud over the decade are examined in a special report in BNA's Health Care Fraud Report™, released today. The special report, which marks the 10-year anniversary of the publication, features well-known health care fraud experts, including officials from the Department of Health and Human Services Office of Inspector General (OIG), the Centers for Medicare & Medicaid Services, the Department of Justice, and expert attorneys, all weighing in to paint a 10-year picture of how our nation is fighting health care fraud – which experts say consumes up to 10 percent of our health care spending – or about $170 billion a year.

The report features graphics showing trends in federal expenditure on enforcement initiatives, the growing use of the False Claims Act  "whistleblower" law against health care providers, and the largest multi-million dollar fraud settlements.  In addition, health care attorneys who are members of the Report'’s Advisory Board reveal how their legal practices have been influenced by these trends over the past 10 years.  The report finds that:

• Before Congress passed HIPAA, the fraud-fighting efforts of the HHS Office of the Inspector General (OIG) were funded at less than $80 million annually. By 2003, that funding had doubled to $160 million in mandatory funding, plus additional money through discretionary funding. The Taxpayer Relief and Health Care Act of 2006 authorizes funding increases through 2010.
• Although the health insurance portability and medical records privacy provisions in HIPAA garnered the most attention in 1997, Congress packed HIPAA with health care enforcement measures and a steady stream of funding for the OIG, Department of Justice (DOJ), and other law enforcement agencies to combat fraud, waste, and abuse in federal programs.
• Fines resulting from OIG anti-fraud work since HIPAA have gone from more than $1.2 billion in 1997 to nearly $1.6 billion in 2006, with a peak of $1.9 billion in 2004. Criminal convictions increased from 162 in 1997 to 310 in 2006, with the peak in 2005 at 384. Likewise, the number of providers banned from participating in federal health care programs increased from 2,719 in 1997 to 3,425 in 2006, with the peak in 2005 at 3,806.
• The OIG estimates cost savings of $212 billion between 1997 and 2006 for all the programs for which it has oversight authority.
• One of the most important oversight and enforcement tools for the OIG and the Centers for Medicare and Medicaid Services (CMS) over this 10-year period is electronic health care claims, which make volumes of Medicare and Medicaid provider data easily available to law enforcers. The government now has billions of records in which to seek out inappropriate billing through aberrances in data. 
• While waste, fraud, and abuse in the health care industry had long been an area of focus for the HHS OIG, HIPAA raised the level of importance of such cases for other law enforcement agencies including DOJ and the FBI, by establishing funding streams for those agencies.
• Since 1997 all segments of the health care industry have been subject to Department of Justice scrutiny. The agency has obtained civil recoveries or criminal pleas and fines from the hospital industry, pharmaceutical manufacturers, nursing home chains, and prescription drug retailers, as well as smaller entities like durable medical equipment suppliers and individual physicians.
• Since 1998, health care fraud-related collections, returns, and transfers to the Medicare Trust Fund generally have jumped. For every $1 spent on enforcement, the recovery rate has increased from less than $2 in 1998 to nearly $5 in 2004 and 2005.
• Health care cases account for more than 53 percent of the 5, 643 “whistleblower,” or qui tam, cases filed since 1986. The percentage of qui tam cases involving health care was 61 percent in fiscal 2002, 65 percent in fiscal 2003, 66 percent in fiscal 2004, 68 percent in fiscal 2005, and 57 percent in fiscal 2006. Whistleblowers can receive up to 30% of the settlement amount.
• The False Claims Act (FCA) has perhaps played the biggest role in the fight against health care fraud in federal programs over the last 10 years.  Health care FCA cases now surpass military contractor FCA cases as the greatest source of financial recoveries. Since 1986, a total of $11.5 billion of the $18.1 billion recovered under the False Claims Act – about 64 percent – has been for health cases. Of that 11.5 billion, $8.06 billion represents cases brought by whistleblowers (69%).
• A recent study by the Taxpayers Against Fraud estimates the federal government is recovering $15 in returned dollars for every $1 spent investigating and prosecuting FCA whistleblower actions involving health care fraud. In 2001, that ratio was $8 to $1.

BNA's Health Care Fraud Reportwas launched in 1997 as an offshoot of the publishing company’s first health care publication – Medicare Report™.  Now read across the country by health care attorneys, U.S. attorneys, FBI field offices, state insurance departments, and in-house counsel for hospitals and other health care providers,  the publication is known and respected for its analysis, objectivity, and thorough coverage of health care fraud issues.

Commenting on the 10-year anniversary, former HHS OIG Chief Counsel Mac Thornton, now with Sonnenschein Nath & Rosenthal, said, "Through the mid-90's, we OIG types were trying mightily to get industry attention to fraud enforcement and compliance issues.  Yet when I learned in 1997 that BNA intended to launch BNA's Health Care Fraud Report, I wondered if there was enough activity to support a stand-alone publication.   That turned out to be no problem at all!   The attention from BNA was instrumental in efficiently 'getting the word out.'    Ten years later, the Report is still the most comprehensive source of information on these topics."

BNA's Health Care Fraud Report won the 2002 Newsletter & Electronic Publishers Foundation Editorial First Place Excellence Award for Best Single-Topic Newsletter.

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For press copies of the full report, please contact Karen James Cody at (202) 452-4169 or presscontact@bna.com.

BNA's Health Care Fraud Report Managing Editor Lisa Rockelli is available for interviews.

BNA is a leading publisher of print and electronic news and information products for professionals in business and government. BNA produces more than 300 news and information services, including the highly respected Daily Report for Executives,Health Care Policy Report, Pharmaceutical Law & Industry Report, Health Care Fraud Report, Medical Research Law & Policy Report,and Health Law Reporter. Visit BNA at www.bna.com.