	Background

Medicare, Medicaid, and CHIP beneficiaries receive health care from a  variety of providers and in different settings. Medical facilities (such as medical centers, clinics, and medical  practices) and durable medical equipment suppliers were the most  frequent subjects of criminal fraud cases in 2010. Hospitals and medical  facilities were the most frequent subjects of civil fraud cases, including  cases that resulted in judgments or settlements. Approximately 10,200 Subjects Were Investigated for Health Care Fraud in 2010

According to 2010 data, 10,187 subjects were investigated for health care  fraud—of which, 7,848 were subjects of criminal fraud cases, and 2,339  were subjects of civil fraud cases. Data from 2010 shows that HHS-OIG  investigated health care fraud cases for nearly 8,900 subjects, many  more than were opened by the USAOs and DOJ’s Civil Division. The 2005 data  show that medical facilities and durable medical equipment suppliers  were the provider types with the most subjects investigated in cases, as  was also the case with 2010 data. Most of the 7,848 subjects who were investigated for criminal fraud in  2010 were not pursued—meaning that HHS-OIG did not refer the  subject’s case to DOJ for prosecution. Although 2010 Medicare, Medicaid, and CHIP  expenditures on durable medical equipment services was 1.3 percent of  total spending in those programs, approximately 19 percent of subjects  that were found guilty or pled guilty or no contest were durable medical  equipment suppliers. Hospitals and Medical Facilities Were the Most Frequent Subjects of Civil Fraud Cases, Including Cases That Resulted in Judgments or Settlements

According to 2010 civil case data for health care fraud, 2,339 subjects  were investigated in civil cases. Nearly 2,200 Individuals and Entities Were Excluded from Program Participation by HHS-OIG, about 60 Percent of Whom Were in the Nursing Profession

HHS-OIG excluded individuals and entities from participating in federal  health care programs for a variety of reasons in 2010. About 60 percent of the individuals and entities excluded  were those in the nursing profession, such as nurses and nurses’ aides. The next-largest provider type excluded was pharmacies or individuals  affiliated with pharmacies, though they only represented about 7 percent  of the 2010 exclusions. In 2010, pharmaceutical manufacturers were to pay  more than 60 percent of the total amount of civil judgments and  settlements. More Than 40 Percent of Subjects in Fraud Cases Were Home Health Care Providers and Health Care Practitioners

Of the 2,742 subjects of health care fraud in Medicaid and CHIP referred  to MFCUs for investigation, more than 40 percent were affiliated with two  provider categories: home health care providers (26.6 percent) and health  care practitioners (14.8 percent). Home Health Providers Accounted for Nearly 40 percent of Criminal Convictions and About 45 Percent of Subjects Sentenced for 2010

In 2010, 692 subjects were indicted or charged in criminal health care  fraud cases handled by 10 MFCUs; of those, nearly 40 percent were  home health care providers—which includes home health care agencies,  and home health care aides. Agency Comments

GAO provided a draft of the report to DOJ and HHS. DOJ provided  technical comments, which have been incorporated as appropriate. Appendix I: Methodology for Analyzing Data Obtained from the Federal Agencies

To identify subjects of health care fraud cases in Medicare, Medicaid, and  the Children’s Health Insurance Program (CHIP)—including referrals,  investigations, prosecutions, and outcomes—by provider type, and to  examine changes in the distribution of provider types in 2005 and 2010,  we obtained data on health care fraud cases from the Department of  Health and Human Services’ Office of Inspector General (HHS-OIG), the  Department of Justice’s (DOJ) Executive Office of U.S. In the USAO and Civil Division data, there were 2,470 subjects—1,484 of  which were investigated in civil cases, and 986 that were investigated in  criminal cases—for which we did not identify a duplicate case in the HHS- OIG data, and did not contain information on the provider type. Appendix II: Methodology for Selecting State Medicaid Fraud Control Units and Analyzing Submitted Data

To identify subjects of Medicaid and Children’s Health Insurance Program  (CHIP) fraud cases investigated or prosecuted, or both, by Medicaid  Fraud Control Units (MFCU) by provider type, and to examine changes in  the distribution of provider types investigated and prosecuted for fraud in  2005 and 2010, we collected data from 10 state MFCUs. We also interviewed  officials from the Centers for Medicare & Medicaid Services, the HHS- OIG’s Office of Evaluation and Inspections, and the National Association  of MFCUs to obtain information on fraud cases handled by the MFCUs.
Why GAO Did This Study

GAO has designated Medicare and Medicaid--which are administered by the Centers for Medicare & Medicaid Services (CMS), an agency of HHS--as high-risk programs partly because their size and complexity make them vulnerable to fraud. Several federal agencies conduct health care fraud investigations and related activities, including HHS-OIG and DOJ's Civil Division, and the 93 U.S. Attorney's Offices (USAO). In fiscal year 2011, the federal government devoted at least $608 million to conduct such activities. Additionally, state MFCUs investigate health care fraud in their state's Medicaid and CHIP programs.
GAO was asked to provide information on the types of providers that are the subjects of fraud cases. This report identifies provider types who were the subjects of fraud cases in (1) Medicare, Medicaid, and CHIP that were handled by federal agencies, and changes in the types of providers in 2005 and 2010; and (2) Medicaid and CHIP fraud cases that were handled by MFCUs. To identify subjects of fraud cases handled by federal agencies, GAO combined data from three agency databases--HHS-OIG, USAOs, and DOJ's Civil Division--and removed duplicate subject data. GAO also reviewed public court records, such as indictments, to identify subjects' provider types because the USAOs and DOJ Civil Division data did not consistently include provider type. To describe providers involved in fraud cases handled by the MFCUs, GAO collected aggregate data from 10 state MFCUs, which represented the majority of fraud investigations, indictments, and convictions nationwide.

What GAO Found

According to 2010 data from the Department of Health and Human Services' Office of the Inspector General (HHS-OIG) and the Department of Justice (DOJ), 10,187 subjects--individuals and entities involved in fraud cases--were investigated for health care fraud, including fraud in Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). These subjects included different types of providers and suppliers--such as physicians, hospitals, durable medical equipment suppliers, home health agencies, and pharmacies--that serve Medicare, Medicaid, and CHIP beneficiaries. For criminal cases in 2010, medical facilities--including medical centers, clinics, or practices--and durable medical equipment suppliers were the most-frequent subjects investigated. Hospitals and medical facilities were the most-frequent subjects investigated in civil fraud cases, including cases that resulted in judgments or settlements.
Subjects of criminal cases: Many of the 7,848 criminal subjects in 2010 were medical facilities or durable medical equipment suppliers, representing about 40 percent of subjects of criminal cases. Similarly, in 2005, medical facilities and durable medical equipment suppliers accounted for 41 percent of criminal case subjects. Data from 2010 show that most of the subjects were in cases that were not referred by HHS-OIG to DOJ for prosecution (85 percent). Of the subjects whose cases were pursued, most were found guilty or pled guilty or no contest.
Subjects of civil cases: Over one-third of the 2,339 subjects of civil cases in 2010 were hospitals and medical facilities. In 2010, about 35 percent more subjects were investigated in civil fraud cases than in 2005. Nearly half of the subjects of 2010 cases were pursued. Among the subjects whose cases were pursued, 55 percent resulted in judgments or settlements.
Additionally, data from HHS-OIG show that nearly 2,200 individuals and entities were excluded from program participation for health care fraud convictions and other reasons, including license revocation and program-related convictions. About 60 percent of those individuals and entities excluded were in the nursing profession. Pharmacies or individuals affiliated with pharmacies were the next-largest provider type excluded, representing about 7 percent of those excluded.
According to data GAO collected from 10 state Medicaid Fraud Control Units (MFCU), over 40 percent of the 2,742 subjects investigated for health care fraud in Medicaid and CHIP in 2010 were home health care providers and health care practitioners. Of the criminal cases pursued by these MFCUs, home health care providers comprised nearly 40 percent of criminal convictions and 45 percent of subjects sentenced in 2010. Civil health care fraud cases pursued by these MFCUs in 2010 resulted in judgments and settlements totaling nearly $829 million. Pharmaceutical manufacturers were to pay more than 60 percent ($509 million) of the total amount of civil judgments and settlements.
GAO provided a draft of the report to DOJ and HHS. DOJ provided technical comments, which have been incorporated as appropriate.