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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

September 2012: 

Health Care Fraud: 

Types of Providers Involved in Medicare, Medicaid, and the Children's 
Health Insurance Program Cases: 

GAO-12-820: 

GAO Highlights: 

Highlights of GAO-12-820, a report to congressional requesters. 

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. 

View [hyperlink, http://www.gao.gov/products/GAO-12-820]. For more 
information, contact Kathleen M. King at (202) 512-7114 or 
kingk@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Medical Facilities Were the Most Frequent Subjects of Criminal 
Investigations, and Hospitals Were the Most Frequent Subjects of Civil 
Investigations: 

Home Health Providers Were the Largest Percentage of Criminal 
Convictions for MFCUs, and Pharmaceutical Manufacturers Were Ordered 
to Pay the Most in Civil Cases: 

Agency Comments: 

Appendix I: Methodology for Analyzing Data Obtained from the Federal 
Agencies: 

Appendix II: Methodology for Selecting State Medicaid Fraud Control 
Units and Analyzing Submitted Data: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Agencies, Divisions, and Their Roles in Health Care Fraud 
Investigation and Prosecution: 

Table 2: Number of Subjects Investigated in Health Care Fraud Cases, 
by Agency, 2010: 

Table 3: Number and Percentage of Subjects of Health Care Fraud Cases 
Referred to HHS-OIG, by Source of Referral, 2010: 

Table 4: Number and Percentage of Subjects in Criminal Health Care 
Fraud Investigations, by Provider Type, 2010: 

Table 5: Number and Percentage of Subjects in Criminal Health Care 
Fraud Investigations, by Entity or Individual Provider Type, 2010: 

Table 6: Number and Percentage of Subjects Investigated in Criminal 
Health Care Fraud Cases, by Outcome of Case, 2010: 

Table 7: Number and Percentage of Health Care Fraud Subjects That Were 
Found Guilty or Pled Guilty or No Contest, by Provider Type, 2010: 

Table 8: Number and Percentage of Civil Health Care Fraud Case 
Subjects Investigated, by Provider Type, 2010: 

Table 9: Number and Percentage of Civil Health Care Fraud Case 
Subjects Investigated, by Entity or Individual Provider Type, 2010: 

Table 10: Number and Percentage of Subjects in Civil Health Care Fraud 
Cases, by Outcome of Case, 2010: 

Table 11: Number and Percentage of Subjects in Civil Health Care Fraud 
Cases with Judgment for Government or Relator, or Settlement, or Both, 
by Provider Type, 2010: 

Table 12: Number of Individuals and Entities Excluded from Program 
Participation, by Provider Type, 2010: 

Table 13: Number of Exclusions from Program Participation by Reason, 
2010: 

Table 14: Number of Subjects of Health Care Fraud Referred to 10 
Medicaid Fraud Control Units (MFCU) for Investigation, by Provider 
Type, 2005 and 2010: 

Table 15: Outcomes for Subjects of Criminal Health Care Fraud Cases 
Handled by 10 Medicaid Fraud Control Units (MFCU), by Provider Type, 
2010: 

Table 16: Criminal Case Sentencing Outcomes for Subjects of Health 
Care Fraud Cases Handled by 10 Medicaid Fraud Control Units (MFCU), by 
Provider Type, 2010: 

Table 17: Civil Judgments or Settlements for Subjects of Health Care 
Fraud Cases Handled by 10 Medicaid Fraud Control Units (MFCU) by 
Provider Type, 2005 and 2010: 

Table 18: Categories of Provider Types Developed for Analysis of 
Health Care Fraud Case Subjects: 

Table 19: Information about Health Care Fraud Handled by 10 State 
Medicaid Fraud Control Units (MFCU), Fiscal Year 2010: 

Table 20: Categories of Provider Types Used in Data Collection 
Instrument Sent to State Medicaid Fraud Control Units for Analysis of 
Health Care Fraud Case Subjects: 

Abbreviations: 

CHIP: Children's Health Insurance Program: 

CMS: Centers for Medicare & Medicaid Services: 

DOJ: Department of Justice: 

EOUSA: Executive Office of U.S. Attorneys: 

FCA: False Claims Act: 

FBI: Federal Bureau of Investigation: 

HHS: Department of Health and Human Services: 

HHS-OIG: Department of Health and Human Services' Office of Inspector 
General: 

MFCU: Medicaid Fraud Control Unit: 

PACER: Public Access to Court Electronic Records: 

PPACA: Patient Protection and Affordable Care Act: 

USAO: U.S. Attorney's Office: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 7, 2012: 

The Honorable Harry Reid: 
Majority Leader: 
United States Senate: 

The Honorable Max Baucus: 
Chairman: 
Committee on Finance: 
United States Senate: 

The Honorable Tom Harkin: 
Chairman: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

In fiscal year 2011, 48.4 million individuals were enrolled in 
Medicare; 55.6 million in Medicaid; and 8.7 million in the Children's 
Health Insurance Program (CHIP).[Footnote 1] Together, these programs 
accounted for approximately $849.2 billion in federal expenditures. 
[Footnote 2] The federal government allocated at least $608 million in 
funding to investigate and prosecute cases of alleged health care 
fraud in health care programs that year.[Footnote 3] Many different 
types of providers and suppliers who serve Medicare, Medicaid, and 
CHIP beneficiaries are subjects of fraud cases, including physicians, 
hospitals, durable medical equipment suppliers, home health agencies, 
and pharmacies.[Footnote 4] Because their size and complexity make 
them vulnerable to fraud, we have designated Medicare and Medicaid as 
high-risk programs.[Footnote 5] According to the Department of Health 
and Human Services' Office of Inspector General (HHS-OIG), common 
health care fraud schemes include providers or suppliers billing for 
services or supplies not provided or not medically necessary, 
purposely billing for a higher level of service than that provided, 
misreporting data to increase payments, paying kickbacks to providers 
for referring beneficiaries for specific services or to certain 
entities, and stealing providers' or beneficiaries' identities. 

The Centers for Medicare & Medicaid Services (CMS)--an agency within 
the Department of Health and Human Services (HHS) that oversees 
Medicare, Medicaid, and CHIP--along with HHS-OIG, and the Department 
of Justice (DOJ)--including the Federal Bureau of Investigation (FBI)--
work together to investigate and prosecute alleged fraud in Medicare, 
Medicaid, and CHIP. For example, CMS, HHS-OIG, and DOJ officials 
comprise Medicare Strike Force teams, which are designed to use data 
analysis techniques to identify and stop Medicare fraud. Additionally, 
these agencies coordinate with state Medicaid Fraud Control Units 
(MFCU), which are primarily responsible for investigating and 
prosecuting fraud within their state Medicaid programs. 

HHS-OIG, FBI, and MFCUs receive referrals of alleged fraud from a 
variety of sources, including program beneficiaries, state agencies, 
law enforcement, and whistleblowers. CMS and its contractors report 
alleged fraud cases to HHS-OIG for investigation. HHS-OIG typically 
refers investigations of the alleged fraud cases that it believes have 
merit to DOJ for civil litigation or criminal prosecution because it 
does not have the authority to prosecute health care fraud cases. 
MFCUs--which are generally located in the state offices of the 
Attorney General--investigate and typically prosecute health care 
fraud cases under state laws. Additionally, MFCUs coordinate with HHS-
OIG and DOJ on certain fraud cases. DOJ and its divisions may also 
receive referrals of alleged fraud through civil cases filed by 
individuals under the False Claims Act (FCA). The outcomes of health 
care fraud cases can include civil and criminal penalties.[Footnote 6] 
Civil penalties include monetary settlements, and criminal penalties 
include incarceration sentences, fines, and restitution. HHS-OIG also 
can impose administrative penalties on providers--including imposing a 
civil monetary penalty, or excluding a provider from participating in 
federal health care programs. In fiscal year 2011, the federal 
government won or negotiated approximately $2.4 billion in judgments 
and settlements related to health care fraud.[Footnote 7] 

Concerns have been raised about the need to better detect and combat 
fraud in federal health care programs, such as Medicare, Medicaid, and 
CHIP. Some of these concerns have specifically focused on determining 
whether resources to fight fraud are being targeted toward the types 
of health care providers committing the most fraud. This report 
provides information on individuals or entities involved in health 
care fraud cases in Medicare, Medicaid, and CHIP. These individuals 
and entities are generally referred to as "subjects" of health care 
fraud cases. In this report, we identify: (1) subjects of health care 
fraud cases by provider type involving Medicare, Medicaid, or CHIP 
that were handled by federal agencies, and changes in the types of 
providers in 2005 and 2010; and (2) subjects of health care fraud 
cases by provider type for those cases involving Medicaid or CHIP that 
were handled by MFCUs, and changes in the types of providers 
investigated in fraud cases in 2005 and 2010. 

To identify subjects of health care fraud cases--including referrals, 
investigations, prosecutions, and outcomes--by provider type for cases 
involving Medicare, Medicaid, or CHIP that were handled by federal 
agencies, and to examine changes in the types of provider in 2005 and 
2010, we obtained data on closed health care fraud cases from HHS-OIG, 
DOJ's Civil Division, and the Executive Office of U.S. Attorneys 
(EOUSA), which provides administrative support for the 94 U.S. 
Attorney's Offices (USAO).[Footnote 8] We obtained data on fraud cases 
involving Medicare, Medicaid, and CHIP--including any cases that were 
closed in calendar years 2005 and 2010.[Footnote 9] However, due to 
limitations with some of the 2005 data, our analysis of the changes in 
the types of providers in 2005 and 2010 is limited. Each fraud case 
can have more than one subject, and our analysis focuses on the 
subjects of the fraud cases rather than the cases themselves. 
Additionally, a fraud subject can be either an entity itself or an 
individual affiliated with an entity.[Footnote 10] The data we 
received from HHS-OIG pertained only to health care fraud in Medicare, 
Medicaid, and CHIP; however, data we received from the USAOs and DOJ's 
Civil Division may also include other federal health care program 
fraud as well as fraud in the private sector as the databases used to 
track fraud cases do not capture fraud exclusively in Medicare, 
Medicaid, and CHIP. Since many fraud cases are handled jointly by HHS-
OIG, USAOs, and DOJ's Civil Division (and entered into each agency's 
own database), we identified fraud case subjects that were in more 
than one data set we received by comparing subject information to the 
extent possible. However, it is possible that our analysis still 
includes some duplication in fraud case subjects. With the exception 
of one analysis at the agency level, we excluded duplicate data so 
that each subject was only included once. The data we received from 
HHS-OIG contained information on the provider type of the subject; 
provider type is not a required field in the USAOs database, 
consequently, the USAOs do not consistently have provider type 
information, and DOJ's Civil Division does not collect data by 
provider type. In order to identify the provider type of subjects in 
the USAO and DOJ Civil Division data that were missing information, it 
was necessary for us to conduct an extensive search of publicly 
available court records to identify the provider type for 2,470 
subjects. We searched for the subjects in the Public Access to Court 
Electronic Records (PACER) database and reviewed indictments, plea 
agreements, and other court documents to obtain information on the 
subject's provider type. After we identified the provider types for 
data we received from USAOs and DOJ's Civil Division and after 
reviewing the data on provider types in the HHS-OIG data, we 
aggregated the various provider types into broad categories, which are 
described in appendix I. We also reviewed agency documents and 
conducted interviews with officials from HHS-OIG and DOJ--including 
the Civil and Criminal Divisions, FBI, and EOUSA--to obtain 
information about health care fraud cases and the databases used to 
track these cases. To assess the reliability of the data, we 
interviewed officials from these agencies to discuss the quality of 
the data we obtained, reviewed relevant documentation, and examined 
the data for reasonableness and internal consistency. We found these 
data were sufficiently reliable for the purposes of our report (see 
appendix I for additional information about our methodology). 

To identify subjects of health care fraud cases by provider type for 
those cases involving Medicaid or CHIP that were handled by state 
MFCUs, and to examine changes in the types of providers investigated 
and prosecuted for fraud in 2005 and 2010, we collected aggregate data 
on closed fraud cases from 10 state MFCUs for 2005 and 2010. These 
MFCUs were selected because, collectively, they accounted for the 
majority of open fraud investigations, fraud indictments or charges, 
fraud convictions, amounts recovered from civil settlements and 
judgments, MFCU grant expenditures, and number of MFCU staff in fiscal 
year 2010.[Footnote 11] The 10 selected MFCUs were in California, 
Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 
Texas, and Virginia.[Footnote 12] We developed a standardized data-
collection instrument based on the HHS-OIG's Quarterly Statistical 
MFCU Report Template and accompanying definitions. We received 
feedback on a draft of the data-collection instrument from officials 
from two MFCUs before finalizing it. Although the data we received 
from the 10 MFCUs represent a majority of fraud cases handled by all 
MFCUs nationwide, the data are not generalizable to other states. The 
data we received represented actions related to fraud cases that 
occurred only in the years we requested.[Footnote 13] Each instance of 
fraud in the data submitted by the 10 MFCUs represents one individual, 
facility, or organization that we refer to as the subject of the fraud 
case. Fraud case subjects may be an individual, such as a dentist or a 
nurse; an organization, such as a pharmaceutical manufacturer; or a 
facility, such as a hospital. Several subjects may be investigated in 
one fraud case; however, each subject in a fraud case is counted 
separately. Additionally, for our analysis, we aggregated various 
provider types into broad categories, which are described in appendix 
II. Because the state MFCUs may work together on certain cases that 
cross state lines, it is possible that duplicate data are included in 
our analysis. We also conducted interviews with officials from CMS, 
the HHS-OIG's Office of Evaluations and Inspections, and the National 
Association of MFCUs to obtain information on fraud cases handled by 
the MFCUs. We relied on the data as reported by the 10 MFCUs and did 
not independently verify these data. However, we reviewed the data for 
reasonableness and followed up with state officials for clarification 
when necessary. On the basis of these activities, we determined these 
data were sufficiently reliable for the purpose of our report (see 
appendix II for additional information). 

We conducted this performance audit from June 2011 to September 2012 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for any 
findings and conclusions based on our audit objectives. 

Background: 

Medicare, Medicaid, and CHIP beneficiaries receive health care from a 
variety of providers and in different settings. When suspected cases 
of fraud emerge, many agencies are involved in investigating and 
prosecuting these cases and they rely on multiple statutes. 

Medicare, Medicaid, and CHIP Health Care Providers: 

Medicare, Medicaid, and CHIP beneficiaries receive health care from a 
variety of providers--including physicians, nurses, dentists, and 
other medical professionals--in many different settings, such as 
hospitals, medical practices, clinics, and health centers. 
Additionally, beneficiaries may receive care and assistance from home 
health agencies and aides, durable medical equipment suppliers, and 
medical transportation companies. In 2010, about $478 billion in 
federal Medicare, Medicaid, and CHIP spending was attributable to 
hospital care (41.3 percent of total spending) and physician and 
clinical services (18.3 percent of total spending) based on National 
Health Expenditure Account data from CMS. Expenditures for 
prescription drugs accounted for 9.3 percent of spending in these 
programs, and nursing home care accounted for 7.8 percent. Many other 
categories of providers accounted for the remaining 23.4 percent. 

Agencies That Investigate and Prosecute Health Care Fraud: 

Several agencies are involved in investigating and prosecuting health 
care fraud cases, including the HHS-OIG; DOJ's Civil and Criminal 
divisions; the 94 USAOs; the FBI; and state MFCUs. The HHS-OIG and FBI 
primarily conduct investigations of health care fraud, and DOJ's 
divisions typically prosecute or litigate those cases.[Footnote 14] 
See table 1 for additional information about the role of each agency 
in fraud investigations and prosecutions. 

Table 1: Agencies, Divisions, and Their Roles in Health Care Fraud 
Investigation and Prosecution: 

Agency: Department of Health and Human Services' Office of Inspector 
General (HHS-OIG); 

Division: Office of Investigations; 
Role in investigating and prosecuting health care fraud: Responsible 
for conducting and coordinating investigations into allegations of 
fraud in HHS programs, including Medicare, Medicaid, and CHIP. They 
are also responsible for certain exclusions of providers from 
participating in federal health care programs. 
HHS-OIG investigators also play an active role in the Medicare Strike 
Force teams--which are teams comprising staff from federal, state, and 
local investigation agencies, designed to combat Medicare fraud by 
using data-analysis techniques--located in nine cities nationwide. 

Division: Office of Counsel to the Inspector General; 
Role in investigating and prosecuting health care fraud: Has the 
authority to impose administrative penalties related to health care 
fraud, including civil monetary penalties. 

Agency: Department of Justice (DOJ)[A]; 

Division: Criminal Division; 
Role in investigating and prosecuting health care fraud: Prosecutes 
criminal health care fraud. DOJ's Criminal Division also plays an 
active role in the Medicare Strike Force teams. 

Division: Civil Division; 
Role in investigating and prosecuting health care fraud: Represents 
the U.S. government in civil matters, such as cases brought against 
pharmaceutical manufacturers for marketing prescription drugs for uses 
other than what have been approved. DOJ's Civil Division also has the 
authority to bring criminal charges against pharmaceutical and medical 
device manufacturers for, among other things, unlawful off-label 
marketing under the Federal Food, Drug, and Cosmetic Act. 

Division: U.S. Attorney's Offices (USAO); 
Role in investigating and prosecuting health care fraud: Litigate or 
prosecute civil and criminal health care fraud cases in their 
districts--94 USAOs throughout the country. The USAOs in the nine 
cities where Medicare Strike Force teams are located also participate 
in those teams. 

Division: Federal Bureau of Investigation (FBI); 
Role in investigating and prosecuting health care fraud: Investigates 
health care fraud through coordinated initiatives with federal, state, 
and local agencies. The FBI also participates in task forces, and 
undercover operations to identify health care fraud, as well as the 
Medicare Strike Force teams. 

Agency: Medicaid Fraud Control Unit (MFCU); 

Division: Each state and the District of Columbia has its own MFCU[B]; 
Role in investigating and prosecuting health care fraud: Investigate 
and typically prosecute civil and criminal health care fraud in the 
state's Medicaid program. The MFCUs also investigate cases of patient 
abuse and neglect. Although MFCUs typically work on Medicaid fraud 
cases, they may obtain permission from HHS-OIG to investigate fraud in 
Medicare; MFCUs are required to be separate and distinct from the 
state Medicaid agencies and receive state and federal Medicaid funds. 

Source: GAO analysis of information from the HHS-OIG, DOJ and its 
divisions, and MFCUs. 

[A] DOJ's Civil Rights Division may also conduct activities related to 
health care fraud though they investigate conditions of confinement at 
state and local residential institutions. 

[B] North Dakota received a waiver from the federal government and 
does not operate a MFCU. 

[End of table] 

These agencies often work together to investigate and prosecute health 
care fraud cases. For example, HHS-OIG may open a fraud case, work 
with the FBI during the investigation, and then refer the case to a 
USAO for prosecution. Additionally, HHS-OIG, the FBI, a USAO, and 
DOJ's Criminal Division work jointly on health care fraud cases 
handled by Medicare Strike Force teams. Health care fraud cases are 
opened by the agencies either when they receive information about 
suspected fraudulent activity from a source--which can include program 
beneficiaries and CMS and its contractors--or if they proactively 
identify possible fraudulent behavior through data analysis. 
Additionally, in civil cases known as qui tam cases, individuals--
referred to as relators--with evidence of fraud can file a civil suit 
under the False Claims Act (FCA).[Footnote 15] These qui tam cases are 
handled by a USAO or DOJ's Civil Division, though they may receive 
assistance in the investigation from HHS-OIG or the FBI. In other 
fraud cases, if a fraud case is opened by HHS-OIG, the agency 
typically conducts its investigation, determines whether the case has 
merit, and refers the case to DOJ for criminal prosecution or civil 
litigation. Alternatively, HHS-OIG may find that the case does not 
have merit and may close the case. HHS-OIG also has authority to 
impose civil monetary penalties or exclude the provider from 
participating in federal health care programs.[Footnote 16] Similarly, 
DOJ's divisions may choose not to pursue a fraud case for a number of 
reasons, including a lack of evidence or insufficient evidence to 
support the charges, or a lack of resources for investigation or 
prosecution.[Footnote 17] 

MFCUs investigate and typically prosecute health care fraud cases in 
the state's Medicaid program under state laws, and frequently 
coordinate with HHS-OIG and DOJ on the investigation and prosecution 
of certain fraud cases. Many MFCUs have authority to prosecute cases 
of fraud, but not all MFCUs are able to do so and refer cases to other 
agencies for prosecution. For example, Texas' MFCU does not have the 
authority to prosecute cases and refers cases to another agency or 
office, such as the U.S. Attorney's Office or the state's District 
Attorney, for prosecution. 

Fraud Statutes and Outcomes: 

Several statutes concern health care fraud.[Footnote 18] These 
statutes include the following: 

* Civil monetary penalty provisions of the Social Security Act are 
applicable to certain enumerated activities, such as knowingly 
presenting a claim for medical services that is known to be false and 
fraudulent.[Footnote 19] The Social Security Act also provides for 
criminal penalties for knowing and willful false statements in 
applications for payment.[Footnote 20] In addition, providers may be 
excluded on a mandatory or permissive basis from participating in 
federal health care programs for engaging in certain fraudulent 
activities. 

* The Anti-Kickback statute makes it a criminal offense for anyone to 
knowingly and willfully solicit, receive, offer, or pay any 
remuneration in return for or to induce referrals of items or services 
reimbursable under a federal health care program, subject to statutory 
exceptions and regulatory safe harbors.[Footnote 21] For example, a 
payment program under which a hospital paid physicians who referred 
patients for admission would implicate the anti-kickback statute. 

* The Stark law and its implementing regulations prohibit physicians 
from making "self-referrals"--certain referrals for "designated health 
services" paid for by Medicare[Footnote 22] to entities with which the 
physician (or immediate family) has a financial relationship. The 
Stark law also prohibits these entities that perform the "designated 
health services" from presenting claims to Medicare or billing for 
these services.[Footnote 23] 

* The Federal Food, Drug, and Cosmetic Act makes it unlawful to, among 
other things, introduce an adulterated or misbranded pharmaceutical 
product or device into interstate commerce.[Footnote 24] 

* The False Claims Act (FCA) is often used by the federal government 
in health care fraud cases.[Footnote 25] The FCA prohibits certain 
actions, including the knowing presentation of a false claim for 
payment by the federal government. Claims that are submitted in 
violation of certain other statutes may also be considered false 
claims and, as a result, create additional liability under the FCA. 
Many health care fraud cases pursued under the FCA are for billing for 
goods or services not rendered, billing for unnecessary health care 
goods or services, or billing for goods or services at a higher rate 
than what was provided. Under the FCA, civil cases can be brought by 
the U.S. government or by a private citizen. 

The outcome of a fraud case can depend on whether the case is civil or 
criminal, and if the case is prosecuted or litigated, the penalties 
authorized under the relevant statutes. For example, civil cases that 
are litigated may result in judgments imposed by a court or 
settlements reached by the subjects and litigators of the fraud case. 
In criminal cases, outcomes can include incarceration, probation, and 
fines. HHS-OIG may also impose civil monetary penalties on providers 
for committing fraud, and may exclude providers from participating in 
federal health care programs. In some cases, a subject may receive 
both civil and criminal penalties, and be excluded. 

Medical Facilities Were the Most Frequent Subjects of Criminal 
Investigations, and Hospitals Were the Most Frequent Subjects of Civil 
Investigations: 

According to 2010 data, 10,187 subjects were investigated for health 
care fraud. 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. 
Nearly 2,200 individuals were excluded from program participation by 
HHS-OIG, about 60 percent of whom were in the nursing profession. 

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.[Footnote 26] Table 2 contains information on health care 
fraud subjects by agency, reflecting the work of each agency in 2010. 
To fully reflect the work of each agency, data on subjects that were 
included in more than one agency database were included in the top 
portion of the table. The duplicate cases were removed to arrive at 
the unique count of subjects and were not included in our other 
analyses. Data comparing cases handled in 2005 and 2010 show that HHS-
OIG investigated cases for nearly 2,800 more subjects in 2010 than it 
did in 2005, while the USAOs and DOJ's Civil Division handled cases 
for approximately the same number of subjects. 

Table 2: Number of Subjects Investigated in Health Care Fraud Cases, 
by Agency, 2010: 

Agency: HHS-OIG; 
Subjects of criminal cases: 7,270; 
Subjects of civil cases: 1,606; 
Total: 8,876. 

Agency: USAOs; 
Subjects of criminal cases: 877; 
Subjects of civil cases: 545; 
Total: 1,422. 

Agency: DOJ's Civil Division; 
Subjects of criminal cases: n/a; 
Subjects of civil cases: 445; 
Total: 445. 

Subjects that were included in more than one agency database[A]: 
Subjects of criminal cases: (299); 
Subjects of civil cases: (257); 
Total: (556). 

Agency: Unique count of subjects investigated in fraud cases; 
Subjects of criminal cases: 7,848; 
Subjects of civil cases: 2,339; 
Total: 10,187. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG), Department of Justice's (DOJ) 
U.S. Attorneys' Offices (USAO), and DOJ's Civil Division data. 

Notes: Data in this table are for calendar year 2010. The data from 
HHS-OIG pertained only to health care fraud in Medicare, Medicaid, and 
the Children's Health Insurance Program (CHIP); however, data from the 
USAOs and DOJ's Civil Division may also include other health care 
fraud. 

DOJ's Civil Division handles civil health care fraud cases and has the 
authority to bring criminal charges against pharmaceutical and medical 
device manufacturers under the Federal Food, Drug, and Cosmetic Act. 

[A] Health care fraud data reported in this table contain duplicate 
information for some subjects of the fraud cases because fraud cases 
are often jointly handled by HHS-OIG, USAOs, and DOJ's Civil Division, 
and information about these cases are entered into each agency's own 
database. We excluded duplicate information for subjects that we 
identified in more than one agency database so that each subject was 
only included once in our analysis. 

[End of table] 

According to 2010 HHS-OIG data, most of the subjects involved in fraud 
cases were referred to HHS-OIG by federal law enforcement agencies--
such as the FBI--(38 percent), or state or local law enforcement 
agencies (10 percent).[Footnote 27] Case subjects were also referred 
to HHS-OIG by CMS contractors tasked with program integrity (14 
percent), current or former employees of providers (9 percent), or 
individuals (9 percent), and the remainder were from other sources. 
(See table 3 for additional information on the source of health care 
fraud cases referred to HHS-OIG.) 

Table 3: Number and Percentage of Subjects of Health Care Fraud Cases 
Referred to HHS-OIG, by Source of Referral, 2010: 

Federal law enforcement: 
Criminal: 3,022; 
Civil: 337; 
Total: 3,359; 
Percentage of total: 37.8%. 

CMS program integrity contractors: 
Criminal: 1,113; 
Civil: 122; 
Total: 1,235; 
Percentage of total: 13.9%. 

State, local, or tribal law enforcement agency: 
Criminal: 805; 
Civil: 62; 
Total: 867; 
Percentage of total: 9.8%. 

Current or former employees of providers: 
Criminal: 783; 
Civil: 53; 
Total: 836; 
Percentage of total: 9.4%. 

Individuals who are unaffiliated: 
Criminal: 778; 
Civil: 44; 
Total: 822; 
Percentage of total: 9.3%. 

Qui Tam[A]: 
Criminal: 71; 
Civil: 684; 
Total: 755; 
Percentage of total: 8.5%. 

Other: 
Criminal: 486; 
Civil: 128; 
Total: 614; 
Percentage of total: 6.9%. 

State, local, or tribal non-law-enforcement agency: 
Criminal: 203; 
Civil: 54; 
Total: 257; 
Percentage of total: 2.9%. 

Self-disclosure[B]: 
Criminal: 9; 
Civil: 122; 
Total: 131; 
Percentage of total: 1.5%. 

Total: 
Criminal: 7,270; 
Civil: 1,606; 
Total: 8,876; 
Percentage of total: 100%. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG) data. 

Notes: The data included in this table represent information about the 
source of the fraud case, which can include more than one subject and 
are for calendar year 2010. The data from HHS-OIG pertained only to 
health care fraud in Medicare, Medicaid, and the Children's Health 
Insurance Program (CHIP). 

[A] Qui tam cases are brought under the False Claims Act by a private 
citizen. 

[B] Self-disclosure refers to cases where providers report any 
improper actions to HHS-OIG themselves. 

[End of table] 

Medical Facilities and Durable Medical Equipment Suppliers Were the 
Most Frequent Subjects of Criminal Fraud Cases in 2010: 

About 49 percent of criminal health care fraud subjects were, or were 
affiliated with, medical facilities (such as medical practices, 
clinics, or centers), durable medical equipment suppliers, and home 
health agencies. Of the 7,848 subjects associated with criminal cases, 
about 1,100 were charged, and 85 percent of those charged were found 
guilty or pled guilty or no contest. Of those subjects who were found 
guilty or pled guilty or no contest, about 37 percent were medical 
facilities and durable medical equipment suppliers. 

Criminal Health Care Fraud: 

According to 2010 data, many different types of providers--including 
medical facilities and hospitals, or individuals affiliated with these 
entities--were suspected of health care fraud.[Footnote 28] 
Specifically, about one-quarter of subjects investigated in criminal 
health care fraud cases were medical facilities or were affiliated 
with these facilities. Additionally, about 16 percent of subjects were 
durable medical equipment suppliers. Over 19 percent were subjects for 
which we could not determine an affiliation. See table 4 for 
additional information on the subjects of criminal health care fraud 
cases by provider type for 2010. 

[Side bar: Example of a Criminal Health Care Fraud Investigation: 
According to the indictment in one fraud case, two subjects owned and 
operated a medical clinic that provided injection treatments for 
patients with cancer, HIV, or AIDS.The owners paid cash kickbacks and 
bribes to Medicare beneficiaries to serve as patients at the medical 
clinic, and submitted claims to the Medicare program for services that 
were not provided, not provided as claimed, or were not medically 
necessary. To make it appear that they operated a legitimate clinic, 
one of the owners ordered quantities of specific HIV and AIDS 
medications, but the quantity of drugs ordered was much less than the 
quantity billed to Medicare. Medicare made payments of nearly $2.1 
million to the clinic. End of side bar] 

Table 4: Number and Percentage of Subjects in Criminal Health Care 
Fraud Investigations, by Provider Type, 2010: 

Medical facilities: Medical practices: 
Number of subjects of criminal cases: 1,101; 
Percentage of total criminal cases: 24.3% (combined with category 
below). 

Medical facilities: Medical centers or clinics: 
Number of subjects of criminal cases: 807. 

Durable medical equipment suppliers: 
Number of subjects of criminal cases: 1,275; 
Percentage of total criminal cases: 16.2%. 

Home health agencies: 
Number of subjects of criminal cases: 639; 
Percentage of total criminal cases: 8.1%. 

Other centers, clinics, or facilities: 
Number of subjects of criminal cases: 598; 
Percentage of total criminal cases: 7.6%. 

Hospitals: 
Number of subjects of criminal cases: 357; 
Percentage of total criminal cases: 4.5%. 

Pharmacies: 
Number of subjects of criminal cases: 321; 
Percentage of total criminal cases: 4.1%. 

Nursing homes: 
Number of subjects of criminal cases: 253; 
Percentage of total criminal cases: 3.2%. 

Management service providers: 
Number of subjects of criminal cases: 209; 
Percentage of total criminal cases: 2.7%. 

Medical transportation companies:
Number of subjects of criminal cases: 200; 
Percentage of total criminal cases: 2.5%. 

Other: 
Number of subjects of criminal cases: 162; 
Percentage of total criminal cases: 2.1%. 

Mental health centers or clinics: 
Number of subjects of criminal cases: 122; 
Percentage of total criminal cases: 1.6%. 

Government employees, contractors, or grantees:
Number of subjects of criminal cases: 103; 
Percentage of total criminal cases: 1.3%. 

Insurance companies: 
Number of subjects of criminal cases: 79; 
Percentage of total criminal cases: 1.0%. 

Dental clinics or practices: 
Number of subjects of criminal cases: 55; 
Percentage of total criminal cases: 0.7%. 

Pharmaceutical manufacturers or suppliers:
Number of subjects of criminal cases: 38; 
Percentage of total criminal cases: 0.5%. 

Medical supply companies: 
Number of subjects of criminal cases: 18; 
Percentage of total criminal cases: 0.2%. 

Unknown affiliation: Health care providers: 
Number of subjects of criminal cases: 779; 
Percentage of total criminal cases: 19.2% (combined with 2 categories 
below). 

Unknown affiliation: Individuals[A]: 
Number of subjects of criminal cases: 668. 

Unknown affiliation: Data unavailable; 
Number of subjects of criminal cases: 64. 

Total: 
Number of subjects of criminal cases: 7,848. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG) and Department of Justice's 
(DOJ) U.S. Attorneys' Offices (USAO) data. 

Notes: Data in this table are for calendar year 2010. The data from 
HHS-OIG pertained only to health care fraud in Medicare, Medicaid, and 
the Children's Health Insurance Program (CHIP); however, data from the 
USAOs may also include other health care fraud. 

Each unique subject is only counted once in this table. We identified 
299 subjects of criminal cases that were duplicate subjects in the 
2010 data. We removed these duplicate subjects from the analysis 
reported here. 

For the subjects in the DOJ's USAO data, we identified the provider 
type using the court documents obtained from the Public Access to 
Court Electronic Records (PACER) database. 

[A] Individuals whose affiliation was unknown include some who were 
not health care providers. For example, this category includes 
individuals who were investigated for health care fraud because they 
obtained illegal prescription drugs from physicians or pharmacies. 

[End of table] 

Among the 7,848 subjects in 2010 criminal cases, nearly 50 percent 
were the entities themselves, rather than individuals affiliated with 
those entities. See table 5 for more detailed information on the types 
of providers that were subjects in 2010 criminal cases. Of the 3,864 
subjects that were entities, most were durable medical equipment 
suppliers (819), home health agencies (507), medical centers or 
clinics (506), or medical practices (486). Additionally, more than 15 
percent were physicians, and about 14 percent were management 
employees--such as owners, operators, or managers. 

Table 5: Number and Percentage of Subjects in Criminal Health Care 
Fraud Investigations, by Entity or Individual Provider Type, 2010: 

Entities: Durable medical equipment suppliers; 
Number of subjects of criminal cases: 819; 

Entities: Home health agencies; 
Number of subjects of criminal cases: 507. 

Entities: Medical centers or clinics; 
Number of subjects of criminal cases: 506. 

Entities: Medical practices; 
Number of subjects of criminal cases: 486. 

Entities: Hospitals; 
Number of subjects of criminal cases: 336. 

Entities: Other centers, clinics, or facilities; 
Number of subjects of criminal cases: 330. 

Entities: Nursing homes; 
Number of subjects of criminal cases: 202. 

Entities: Pharmacies; 
Number of subjects of criminal cases: 196. 

Entities: Other entities; 
Number of subjects of criminal cases: 482. 

Entities subtotal: 
Number of subjects of criminal cases: 3,864;
Percentage of total criminal cases: 49.2%. 

Individuals: Physicians; 
Number of subjects of criminal cases: 1,208; 
Percentage of total criminal cases: 15.4%. 

Individuals: Management employees: Durable medical equipment suppliers; 
Number of subjects of criminal cases: 420. 

Individuals: Management employees: Medical centers or clinics; 
Number of subjects of criminal cases: 185. 

Individuals: Management employees: Home health agencies; 
Number of subjects of criminal cases: 85. 

Individuals: Management employees: Other entities; 
Number of subjects of criminal cases: 375.
Percentage of total criminal cases (all management employees): 13.6%. 

Individuals: Employees; 
Number of subjects of criminal cases: 517; 
Percentage of total criminal cases: 6.6%. 

Individuals: Individuals that were not affiliated with an entity and 
were not health care providers; 
Number of subjects of criminal cases: 344; 
Percentage of total criminal cases: 4.4%. 

Individuals: Recipients and beneficiaries; 
Number of subjects of criminal cases: 258; 
Percentage of total criminal cases: 3.3%. 

Individuals: Nurses, nurses' aides, or health care aides; 
Number of subjects of criminal cases: 166; 
Percentage of total criminal cases: 2.1%. 

Individuals: Other[A]; 
Number of subjects of criminal cases: 426; 
Percentage of total criminal cases: 5.4%. 

Individuals subtotal: 
Number of subjects of criminal cases: 3,984. 

Total: 
Number of subjects of criminal cases: 7,848. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG) and Department of Justice's 
(DOJ) U.S. Attorneys' Offices (USAO) data. 

Notes: Data in this table are for calendar year 2010. For the subjects 
in the Department of Justice's U.S. Attorneys' Offices data, we 
identified the provider type using the court documents obtained from 
the Public Access to Court Electronic Records (PACER) database. The 
data from HHS-OIG pertained only to health care fraud in Medicare, 
Medicaid, and the Children's Health Insurance Program (CHIP); however, 
data from the USAOs may have also included other health care fraud. 

[A] This category includes pharmacists, psychologists, therapists, 
counselors, physician assistants, dentists, and other individuals. 

[End of table] 

Changes in Provider Types in 2005 and 2010: 

Our data show that 2010 criminal cases involved 2,300 more subjects 
than 2005 cases. Additionally, some provider types had particularly 
large increases in 2010 compared to the number of subjects 
investigated in criminal cases in 2005. For example, cases where 
pharmacies were the subjects increased from 99 subjects in 2005 to 321 
in 2010 (an increase of 224 percent), and the number of home health 
agency subjects increased from 284 to 639 (an increase of 125 
percent). 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. 
In 2005, medical facilities represented 23 percent of all subjects in 
criminal cases, and durable medical equipment suppliers accounted for 
18 percent. Similarly, in 2010, medical facilities accounted for 24 
percent of all subjects in criminal cases, and durable medical 
equipment suppliers accounted for 16 percent. 

Outcomes for the Subjects of Criminal Fraud Cases from 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. Most subjects--about 85 
percent--were investigated in criminal cases that were not pursued for 
a variety of reasons, mainly due to lack of resources or insufficient 
evidence. The 2010 data indicated that 1,086 subjects were charged in 
criminal fraud cases, which represented about 14 percent of all 
criminal case subjects. Additionally, nearly 1 percent of subjects 
were involved in criminal case appeals, most of which were decided 
favorably for the U.S. government. See table 6 for additional 
information about the number of subjects in criminal cases by outcome. 

Table 6: Number and Percentage of Subjects Investigated in Criminal 
Health Care Fraud Cases, by Outcome of Case, 2010: 

Subjects that were charged[A]: 
Number of subjects by category: 1,086; 
Percentage of total subjects by category: 14%. 

Found guilty or pled guilty or no contest; 
Number of subjects: 925. 

Acquitted; 
Number of subjects: 13. 

Subject's case was dismissed; 
Number of subjects: 102. 

Other outcome, such as pretrial diversion; 
Number of subjects: 46. 

Subjects whose cases were not pursued[B]: 
Number of subjects by category: 6,700; 
Percentage of total subjects by category: 85%. 

Lack of resources; 
Number of subjects: 2,219. 

Lack of sufficient evidence or insufficient details; 
Number of subjects: 904. 

Subject's case did not meet guidance, was outside of HHS-OIG 
jurisdiction, or violation occurred outside of HHS-OIG's region; 
Number of subjects: 338. 

Subject already under investigation or investigated in another case; 
Number of subjects: 336. 

Other reasons[C]; 
Number of subjects: 2,903. 

Subjects who appealed their original cases: 
Number of subjects by category: 62; 
Percentage of total subjects by category: 1%. 

Appeal was dismissed by appellant; 
Number of subjects: 5. 

Appeal decision was favorable for the U.S. government; 
Number of subjects: 55. 

Appeal decision was not favorable for the U.S. government; 
Number of subjects: 2. 

Total: 
Number of subjects: 7,848. 

Source: GAO analysis of data obtained from Department of Health and 
Human Services' Office of Inspector General (HHS-OIG) and Department 
of Justice's (DOJ) U.S. Attorneys' Office (USAO). 

Notes: Data in this table are for calendar year 2010. The data from 
HHS-OIG pertained only to health care fraud in Medicare, Medicaid, and 
the Children's Health Insurance Program (CHIP); however, data from the 
USAOs may have also included other health care fraud. 

[A] Subjects in this section were involved in cases that were pursued, 
meaning that the USAOs received the case and took some sort of action 
on it. For example, in some cases, the USAO received the case and 
decided to dismiss the charges while in others the USAO prosecuted the 
case and the subject was found guilty. 

[B] Subjects in this section were from cases that were not pursued 
further than the case being received or investigated by HHS-OIG. For 
these cases, HHS-OIG did not refer them to the USAOs for prosecution 
for the reasons included in this section of the table. 

[C] Other reasons include that the allegations in the case did not 
constitute a violation or the criminal case was closed to pursue a 
civil case, impose a civil monetary penalty, or exclude the provider. 
Some subjects had their cases closed by HHS-OIG rather than referring 
the case to the USAOs for prosecution for undetermined reasons. 

[End of table] 

Among the 1,086 subjects that were charged, over 85 percent (925 
subjects) were found guilty, pled guilty, or pled no contest to some 
or all of the criminal charges against them. For the remaining 15 
percent of subjects, charges were dismissed (9.4 percent), subjects 
were found not guilty (1.2 percent), or had another outcome (4.2 
percent).[Footnote 29] 

Of the 925 subjects who were found guilty or pled guilty or no 
contest, about 19 percent were from medical facilities--including 
medical centers, clinics, or practices. 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. Many different 
provider types were among the remaining subjects found guilty or that 
pled guilty or no contest. We could not identify the affiliation of 
nearly one-third of the subjects, including both health care providers 
and individuals. See table 7 for additional information on these 
subjects in 2010 criminal cases by provider type. 

[Side bar: Example of a Criminal Health Care Fraud Case Resulting in a 
Conviction: 
In one fraud case that resulted in a conviction, an employee of a 
medical clinic pled guilty to a health care fraud charge for supplying 
patient charts to another individual to add physician visits, medical 
tests, and prescriptions to the patients' charts even though the 
employee knew such care had not been provided. Once the patient charts 
had been altered, the employee then submitted claims to Medicare for 
services that were not provided. Medicare paid $1.1 million for these 
fraudulent claims. The clinic employee was sentenced to 30 months of 
incarceration. End of side bar] 

Table 7: Number and Percentage of Health Care Fraud Subjects That Were 
Found Guilty or Pled Guilty or No Contest, by Provider Type, 2010: 

Medical facilities: 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 18.7%. 

Medical facilities: Medical centers or clinics; 
Number of subjects that were found guilty or pled guilty or no 
contest: 130. 

Medical facilities: Medical practices; 
Number of subjects that were found guilty or pled guilty or no 
contest: 43. 

Durable medical equipment suppliers: 
Number of subjects that were found guilty or pled guilty or no 
contest: 171; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 18.5%. 

Other centers, clinics, or facilities: 
Number of subjects that were found guilty or pled guilty or no 
contest: 58; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 6.3%. 

Other: 
Number of subjects that were found guilty or pled guilty or no 
contest: 49; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 5.3%. 

Home health agencies: 
Number of subjects that were found guilty or pled guilty or no 
contest: 42; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 4.5%. 

Pharmacies: 
Number of subjects that were found guilty or pled guilty or no 
contest: 40; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 4.3%. 

Management service providers: 
Number of subjects that were found guilty or pled guilty or no 
contest: 33; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 3.6%. 

Nursing homes: 
Number of subjects that were found guilty or pled guilty or no 
contest: 14; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 1.5%. 

Medical transportation companies: 
Number of subjects that were found guilty or pled guilty or no 
contest: 14; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 1.5%. 

Pharmaceutical manufacturers or suppliers: 
Number of subjects that were found guilty or pled guilty or no 
contest: 9; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 1.0%. 

Mental health centers, clinics, or facilities: 
Number of subjects that were found guilty or pled guilty or no 
contest: 9; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 1.0%. 

Medical supply companies: 
Number of subjects that were found guilty or pled guilty or no 
contest: 8; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 0.9%. 

Insurance companies: 
Number of subjects that were found guilty or pled guilty or no 
contest: 5; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 0.5%. 

Dental clinics or practices: 
Number of subjects that were found guilty or pled guilty or no 
contest: 4; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 0.4%. 

Government employees, contractors, or grantees: 
Number of subjects that were found guilty or pled guilty or no 
contest: 130: 43: 171: 58: 49: 42: 40: 33: 14: 14: 9: 9: 8: 5: 4: 3; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 0.3%. 

Hospitals: 
Number of subjects that were found guilty or pled guilty or no 
contest: 2; 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 0.2%. 

Unknown affiliation: 
Percentage of total number of subjects that were found guilty or pled 
guilty or no contest: 31.6%. 

Unknown affiliation: Individuals; 
Number of subjects that were found guilty or pled guilty or no 
contest: 220. 

Unknown affiliation: Health care providers; 
Number of subjects that were found guilty or pled guilty or no 
contest: 52. 

Unknown affiliation: Data unavailable; 
Number of subjects that were found guilty or pled guilty or no 
contest: 19. 

Total: 
Number of subjects that were found guilty or pled guilty or no 
contest: 925. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG) and Department of Justice's 
(DOJ) U.S. Attorneys' Offices (USAO). 

Notes: Data in this table are for calendar year 2010. For the subjects 
in the DOJ's USAO data, we identified the provider type using the 
court documents obtained from the Public Access to Court Electronic 
Records database. The data from HHS-OIG pertained only to health care 
fraud in Medicare, Medicaid, and the Children's Health Insurance 
Program; however, data from the USAOs may have also included other 
health care fraud. 

[End of table] 

Of the 925 subjects who were found guilty or pled guilty or no 
contest, 60 percent were sentenced to incarceration,[Footnote 30] and 
73 percent were sentenced to probation. Nearly 26 percent of those 
sentenced to incarceration were subjects affiliated with durable 
medical equipment suppliers, and 21 percent were affiliated with 
medical facilities. Similarly, both durable medical equipment 
suppliers and medical facilities each represented 17 percent of 
subjects sentenced to probation. The average length of a sentence to 
incarceration was about 3.5 years, and the maximum sentence received 
was a life sentence. Nearly 60 percent of subjects sentenced to 
incarceration received sentences between 2 and 5 years, while nearly 
21 percent received a term of 1 year or less. More than 13 percent 
received sentences between 6 and 10 years and about 5 percent received 
sentences of more than 10 years of incarceration. The average 
probation term was 2.8 years, and the maximum term was 10 years. 
Nearly 78 percent of subjects sentenced to probation received a 
probation term between 2 and 5 years. 

Subjects of criminal fraud cases could also be sentenced to home 
detention, public service, or their sentences could be suspended. 
Additionally, subjects could also be ordered to pay fines and 
restitution. Data from HHS-OIG contained information on these types of 
penalties, but data we received from the USAOs did not. According to 
2010 data from HHS-OIG: 

* 56 subjects were sentenced to home detention terms; 

* 75 subjects were sentenced to complete public service; 

* 31 subjects received suspended sentences; 

* 440 subjects were required to pay a fine; and: 

* 307 subjects were required to pay restitution. 

Among those subjects that were required to pay fines or restitution, 
or both, the average amounts required were $898,361 in fines, and $1.8 
million in restitution. In total, subjects were ordered to pay nearly 
$960 million in combined fines and restitution.[Footnote 31] 

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. Hospitals represented 
nearly 20 percent of these subjects, and medical facilities about 18 
percent. Civil cases involving approximately 1,100 subjects were 
pursued--meaning that the USAOs or DOJ's Civil Division received the 
cases and took some sort of action, such as litigating the case; and 
of those, 55 percent resulted in a judgment for the government or in a 
settlement. For those cases that resulted in a judgment or settlement, 
or both, about 44 percent of the subjects were hospitals and medical 
facilities. 

Civil Health Care Fraud: 

According to 2010 data, hospitals were nearly 20 percent of the 
subjects of civil fraud cases, and medical facilities were also 
frequently the subjects of civil cases, making up about 18 percent of 
the subjects. We were unable to determine the provider type or their 
affiliation for about 18 percent of the subjects of civil cases. (See 
table 8 for additional information on the subjects of civil health 
care fraud cases by provider type for 2010.) 

[Side bar: Example of a Civil Health Care Fraud Investigation: 
According to the court document for a qui tam case, a nurse employed 
at a rehabilitation hospital alleged that a physician defrauded
Medicare by upcoding hospital visits to more expensive procedures and 
billed Medicare for work on days he did not work. In addition, the 
physician and the hospital conspired to defraud Medicare by admitting 
patients who did not qualify for inpatient treatment and keeping 
patients in the hospital who were not benefiting from inpatient 
hospitalization. The hospital assigned a disproportionate share of 
admitted patients to the physician engaged in fraud. End of side bar] 

Table 8: Number and Percentage of Civil Health Care Fraud Case 
Subjects Investigated, by Provider Type, 2010: 

Hospitals: 
Number of subjects of civil cases: 455; 
Percentage of total civil cases: 19.5%. 

Hospitals: Medical facilities: 
Percentage of total civil cases: 17.7%. 

Hospitals: Medical practices; 
Number of subjects of civil cases: 218. 

Hospitals: Medical centers or clinics; 
Number of subjects of civil cases: 197. 

Other centers, clinics, or facilities: 
Number of subjects of civil cases: 145; 
Percentage of total civil cases: 6.2%. 

Home health agencies: 
Number of subjects of civil cases: 120; 
Percentage of total civil cases: 5.1%. 

Pharmaceutical manufacturers or suppliers: 
Number of subjects of civil cases: 108; 
Percentage of total civil cases: 4.6%. 

Durable medical equipment suppliers: 
Number of subjects of civil cases: 102; 
Percentage of total civil cases: 4.4%. 

Management service providers: 
Number of subjects of civil cases: 101; 
Percentage of total civil cases: 4.3%. 

Nursing homes: 
Number of subjects of civil cases: 100; 
Percentage of total civil cases: 4.3%. 

Pharmacies: 
Number of subjects of civil cases: 75; 
Percentage of total civil cases: 3.2%. 

Insurance companies: 
Number of subjects of civil cases: 74; 
Percentage of total civil cases: 3.2%. 

Other: 
Number of subjects of civil cases: 55; 
Percentage of total civil cases: 2.4%. 

Mental health centers, clinics, or facilities: 
Number of subjects of civil cases: 42; 
Percentage of total civil cases: 1.8%. 

Government employees, contractors, or grantees: 
Number of subjects of civil cases: 32; 
Percentage of total civil cases: 1.4%. 

Dental clinics or practices: 
Number of subjects of civil cases: 31; 
Percentage of total civil cases: 1.3%. 

Medical transportation companies: 
Number of subjects of civil cases: 29; 
Percentage of total civil cases: 1.2%. 

Medical supply companies: 
Number of subjects of civil cases: 25; 
Percentage of total civil cases: 1.1%. 

Unknown affiliation: 
Percentage of total civil cases: 18.3%. 

Unknown affiliation: Data unavailable or incomplete; 
Number of subjects of civil cases: 218; 

Unknown affiliation: Health care providers; 
Number of subjects of civil cases: 190. 

Unknown affiliation: Individuals; 
Number of subjects of civil cases: 22. 

Total: 
Number of subjects of civil cases: 2,339. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG), Department of Justice's (DOJ) 
U.S. Attorneys' Offices (USAO), and DOJ's Civil Division data. 

Notes: Data in this table are for calendar year 2010. The data from 
HHS-OIG pertained only to health care fraud in Medicare, Medicaid, and 
the Children's Health Insurance Program (CHIP); however, data from the 
USAOs and DOJ's Civil Division may have also included other health 
care fraud. 

Fraud cases are often jointly handled by HHS-OIG, USAOs, and DOJ's 
Civil Division. As a result, the data we received contain duplicate 
information for some of the subjects of fraud cases. We identified 257 
subjects of civil cases that were duplicate subjects in the 2010 data 
and removed these duplicate subjects from the analysis reported here. 

For the subjects in the USAOs and DOJ's Civil Division data, we 
identified the provider type using the court documents obtained from 
the Public Access to Court Electronic Records (PACER) database. 

[End of table] 

As previously mentioned, individuals can bring civil health care fraud 
suits, known as qui tam cases, under the FCA. According to 2010 data 
from the USAOs and DOJ's Civil Division, 88 percent of subjects 
investigated in civil cases were investigated in qui tam cases. 

Nearly 61 percent of the subjects investigated in 2010 civil cases 
were entities themselves, rather than individuals affiliated with 
those entities. Most of these entities were hospitals, medical centers 
or clinics, medical practices, or pharmaceutical manufacturers or 
suppliers. Additionally, physicians represented 12 percent of the 
subjects; and management employees, such as owners, operators, or 
managers, represented 8 percent of the civil case subjects. (See table 
9 for more-detailed information on the types of providers that were 
subjects in 2010 civil cases.) 

Table 9: Number and Percentage of Civil Health Care Fraud Case 
Subjects Investigated, by Entity or Individual Provider Type, 2010: 

Entities: 
Percentage of total civil cases: 60.6%. 

Hospitals; 
Number of subjects of civil cases: 432; 

Medical centers or clinics; 
Number of subjects of civil cases: 121. 

Medical practices; 
Number of subjects of civil cases: 121. 

Pharmaceutical manufacturers or suppliers; 
Number of subjects of civil cases: 108. 

Home health agencies; 
Number of subjects of civil cases: 91. 

Nursing homes; 
Number of subjects of civil cases: 83. 

Durable medical equipment suppliers; 
Number of subjects of civil cases: 82. 

Management service providers; 
Number of subjects of civil cases: 82. 

Other entities; 
Number of subjects of civil cases: 298. 

Entities subtotal: 
Number of subjects of civil cases: 1,418. 

Individuals: 

Physicians; 
Number of subjects of civil cases: 284; 
Percentage of total civil cases: 12.1%. 

Management employees; 
Number of subjects of civil cases: 194; 
Percentage of total civil cases: 8.3%. 

Employees; 
Number of subjects of civil cases: 94; 
Percentage of total civil cases: 4.0%. 

Nurses, nurses' aides, or health care aides; 
Number of subjects of civil cases: 29; 
Percentage of total civil cases: 1.2%. 

Other[A]; 
Number of subjects of civil cases: 320; 
Percentage of total civil cases: 13.7%. 

Individuals subtotal: 
Number of subjects of civil cases: 921. 

Total: 
Number of subjects of civil cases: 2,339. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG), Department of Justice's (DOJ) 
U.S. Attorneys' Offices (USAO), and DOJ's Civil Division data. 

Notes: Data in this table are for calendar year 2010. For the subjects 
in the USAOs and DOJ's Civil Division data, we identified the provider 
type using the court documents obtained from the Public Access to 
Court Electronic Records (PACER) database. The data from HHS-OIG 
pertained only to health care fraud in Medicare, Medicaid, and the 
Children's Health Insurance Program (CHIP); however, data from the 
USAOs and DOJ's Civil Division may have also included other health 
care fraud. 

[A] This category includes pharmacists, psychologists, therapists, 
counselors, physician assistants, dentists, recipients and 
beneficiaries, and others. 

[End of table] 

Civil Case Subjects in 2005 and 2010: 

In 2010, over 600 more subjects were investigated in civil cases than 
in 2005, about a 35 percent total increase. Changes in provider types 
for civil cases are not reported here because we were unable to 
identify provider types for about 31 percent of the subjects in the 
2005 data. In the 2010 data, we were unable to identify the provider 
type for about 18 percent of subjects. Because of this limitation, the 
percentage increases in certain provider types investigated in civil 
fraud cases may not be an accurate reflection of the actual increases 
in provider types of civil fraud cases. 

Outcomes for Subjects of Civil Fraud Cases in 2010: 

Not all of the subjects investigated in 2010 civil cases were pursued--
meaning that the USAOs or DOJ's Civil Division received the case and 
took some sort of action. According to the data we received, 1,087 
subjects were involved in civil cases that were pursued, representing 
nearly 47 percent of all civil case subjects. Among other subjects of 
civil cases, more than 53 percent were not pursued for numerous 
reasons, including a lack of resources or insufficient evidence. 
Additionally, less than 1 percent of subjects were involved in civil 
appeals cases. (See table 10 for additional information about the 
number of subjects involved in civil cases by outcome.) 

Table 10: Number and Percentage of Subjects in Civil Health Care Fraud 
Cases, by Outcome of Case, 2010: 

Subjects in civil case investigations that were pursued[A]: 
Number of subjects by category: 1,087; 
Percentage of total subjects by category: 46.5%. 

Judgment for U.S. government or relator, or settlement, or both; 
Number of subjects: 602; 

Judgment for opposition (subject); 
Number of subjects: 11. 

Case was declined; 
Number of subjects: 33. 

Case was voluntarily dismissed[B]; 
Number of subjects: 315. 

Case was closed with necessary actions taken; 
Number of subjects: 70. 

Other outcome; 
Number of subjects: 56. 

Subjects in civil case investigations that were not pursued[C]: 
Number of subjects by category: 1,246; 
Percentage of total subjects by category: 53.3%. 

Lack of resources; 
Number of subjects: 271. 

Lack of sufficient evidence or insufficient details; 
Number of subjects: 58. 

Subject already under investigation or investigated in another case; 
Number of subjects: 66. 

Other reasons[D]; 
Number of subjects: 851. 

Subjects who appealed their original cases: 
Number of subjects by category: 6; 
Percentage of total subjects by category: 0.3%. 

Appeal was dismissed by appellant; 
Number of subjects: 2. 

Appeal decision was favorable for the U.S.; 
Number of subjects: 4. 

Total: 
Number of subjects: 2,339. 

Source: GAO analysis of data obtained from Department of Health and 
Human Services' Office of Inspector General (HHS-OIG), Department of 
Justice's (DOJ) U.S. Attorneys' Office (USAO) and DOJ's Civil Division 
data. 

Notes: Data in this table are for calendar year 2010. The data from 
HHS-OIG pertained only to health care fraud in Medicare, Medicaid, and 
the Children's Health Insurance Program (CHIP); however, data from the 
USAOs and DOJ's Civil Division may have also included other health 
care fraud. 

[A] Subjects in this section were involved in cases that were pursued, 
meaning that the USAOs or DOJ's Civil Division received the case and 
took some sort of action on it. For example, in some cases, DOJ's 
Civil Division received the case and declined to intervene while in 
others DOJ's Civil Division litigated the case and the court issued a 
judgment against the subject. 

[B] This category includes qui tam cases that were voluntarily 
dismissed by the relator as well as qui tam cases that were 
voluntarily dismissed by the relator after the government decided not 
to intervene in the case. 

[C] Subjects in this section were from cases that were not pursued 
further than the case being received or investigated by HHS-OIG. HHS-
OIG did not refer these cases to the USAOs or DOJ's Civil Division for 
prosecution or litigation for the reasons included in this section. 

[D] Other reasons include that the case does not meet established 
office guidance, the allegations in the case do not constitute a 
violation, or the case is outside of U.S. prosecutorial guidelines. 
Some subjects had their cases closed by HHS-OIG rather than referring 
the case to the USAOs or DOJ's Civil Division for prosecution or 
litigation for undetermined reasons. 

[End of table] 

According to data from the USAOs and DOJ's Civil Division, most qui 
tam cases did not result in a judgment or settlement. For example, 52 
percent of subjects in qui tam cases were either voluntarily dismissed 
by the relator (34 percent) or were declined by the USAOs or DOJ's 
Civil Division (18 percent). Nearly 24 percent of qui tam cases were 
settled and in 8 percent of qui tam cases there was a judgment for the 
government.[Footnote 32] 

For the 602 subjects for which cases resulted in a settlement or 
judgment for the government or for the relator, 27 percent of the 
subjects were hospitals and about 17 percent were medical facilities. 
For nearly 16 percent of subjects, we were unable to determine the 
affiliation of the provider or individual. (See table 11 for 
information on provider types for subjects where the case resulted in 
a settlement or judgment for the government or relator.) 

[Side bar: Example of a Civil Health Care Fraud Case Judgment: 
In one civil case judgment that was pursued under the False Claims 
Act, a medical clinic was accused of billing Medicare for infusion 
therapy treatments allegedly provided by a physician; however, the 
physician indicated that he did not provide those treatments and 
several beneficiaries complained that claims were submitted for 
services never provided to them. The fraudulent claims were submitted 
for a drug that was not approved for use in patients with the 
conditions listed on the claims. This case was pursued in court and 
resulted in a judgment for the U.S. government of more than $17 
million. End of side bar] 

Table 11: Number and Percentage of Subjects in Civil Health Care Fraud 
Cases with Judgment for Government or Relator, or Settlement, or Both, 
by Provider Type, 2010: 

Hospitals: 
Number of subjects with judgment or settlement, or both: 165; 
Percentage of total number of subjects with judgment or settlement, or 
both: 27.4%. 

Medical facilities: Medical practices; 
Number of subjects with judgment or settlement, or both: 65. 

Medical facilities: Medical centers or clinics; 
Number of subjects with judgment or settlement, or both: 35; 
Percentage of total number of subjects with judgment or settlement, or 
both (all medical facilities): 16.6%. 

Other centers, clinics, or facilities: 
Number of subjects with judgment or settlement, or both: 41; 
Percentage of total number of subjects with judgment or settlement, or 
both: 6.8%. 

Home health agencies: 
Number of subjects with judgment or settlement, or both: 34; 
Percentage of total number of subjects with judgment or settlement, or 
both: 5.6%. 

Nursing homes: 
Number of subjects with judgment or settlement, or both: 26; 
Percentage of total number of subjects with judgment or settlement, or 
both: 4.3%. 

Durable medical equipment suppliers: 
Number of subjects with judgment or settlement, or both: 25; 
Percentage of total number of subjects with judgment or settlement, or 
both: 4.2%. 

Management service providers: 
Number of subjects with judgment or settlement, or both: 21; 
Percentage of total number of subjects with judgment or settlement, or 
both: 3.5%. 

Dental clinics or practices: 
Number of subjects with judgment or settlement, or both: 21; 
Percentage of total number of subjects with judgment or settlement, or 
both: 3.5%. 

Pharmaceutical manufacturers or suppliers: 
Number of subjects with judgment or settlement, or both: 19; 
Percentage of total number of subjects with judgment or settlement, or 
both: 3.2%. 

Insurance companies: 
Number of subjects with judgment or settlement, or both: 15; 
Percentage of total number of subjects with judgment or settlement, or 
both: 2.5%. 

Pharmacies: 
Number of subjects with judgment or settlement, or both: 13; 
Percentage of total number of subjects with judgment or settlement, or 
both: 2.2%. 

Medical transportation companies: 
Number of subjects with judgment or settlement, or both: 11; 
Percentage of total number of subjects with judgment or settlement, or 
both: 1.8%. 

Mental health centers, clinics, or facilities: 
Number of subjects with judgment or settlement, or both: 5; 
Percentage of total number of subjects with judgment or settlement, or 
both: 0.8%. 

Other: 
Number of subjects with judgment or settlement, or both: 5; 
Percentage of total number of subjects with judgment or settlement, or 
both: 0.8%. 

Medical supply companies: 
Number of subjects with judgment or settlement, or both: 3; 
Percentage of total number of subjects with judgment or settlement, or 
both: 0.5%. 

Government employees, contractors, or grantees: 
Number of subjects with judgment or settlement, or both: 2; 
Percentage of total number of subjects with judgment or settlement, or 
both: 0.3%. 

Unknown affiliation: 
Percentage of total number of subjects with judgment or settlement, or 
both: 15.9%. 

Unknown affiliation: Data unavailable; 
Number of subjects with judgment or settlement, or both: 58. 

Unknown affiliation: Health care providers; 
Number of subjects with judgment or settlement, or both: 34. 

Unknown affiliation: Individuals; 
Number of subjects with judgment or settlement, or both: 4. 

Total: 
Number of subjects with judgment or settlement, or both: 602. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG), Department of Justice's (DOJ) 
U.S. Attorneys' Offices (USAO), and DOJ's Civil Division data. 

Notes: Data in this table are for calendar year 2010. For the subjects 
in the USAOs and DOJ's Civil Division data, we identified the provider 
type using the court documents obtained from the Public Access to 
Court Electronic Records (PACER) database. The data from HHS-OIG 
pertained only to health care fraud in Medicare, Medicaid, and the 
Children's Health Insurance Program (CHIP); however, data from the 
USAOs and DOJ's Civil Division may have also included other health 
care fraud. 

[End of table] 

According to data from HHS-OIG, of those subjects investigated in 
cases with a judgment or settlement, 275 subjects were to pay 
restitution as a result of the judgment or settlement and 89 subjects 
were to pay fines. Approximately 38 percent of the subjects that were 
to pay restitution were hospitals; 17 percent were medical facilities; 
and 11 percent were physicians whose affiliation we were unable to 
determine. Among those subjects that were to pay fines or restitution, 
or both, the average amounts were about $7.1 million in fines and 
about $5.4 million in restitution. In total, subjects were to pay over 
$2.1 billion in combined fines and restitution as a result of the 
judgments or settlements.[Footnote 33] 

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. These 
reasons included convictions for health care fraud as well as reasons 
other than for health care fraud, such as patient abuse or neglect. 
[Footnote 34] When individuals or entities are excluded, their 
provider enrollment is revoked and they are not eligible to bill for 
services provided.[Footnote 35] According to 2010 exclusion data we 
received from HHS-OIG, 2,190 individuals and entities were excluded. 
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. (See table 12 for additional 
information on the types of providers excluded.) 

Table 12: Number of Individuals and Entities Excluded from Program 
Participation, by Provider Type, 2010: 

Provider type: Nursing profession with unknown affiliation; 
Exclusions: 1,281; 
Percentage: 58.5%. 

Provider type: Pharmacies; 
Exclusions: 150; 
Percentage: 6.8%. 

Provider type: Health care provider with unknown affiliation; 
Exclusions: 125; 
Percentage: 5.7%. 

Provider type: Mental health centers, clinics, or facilities; 
Exclusions: 100; 
Percentage: 4.6%. 

Provider type: Medical centers, clinics, or facilities; 
Exclusions: 98; 
Percentage: 4.5%. 

Provider type: Durable medical equipment suppliers; 
Exclusions: 85; 
Percentage: 3.9%. 

Provider type: Nursing homes; 
Exclusions: 75; 
Percentage: 3.4%. 

Provider type: Home health agencies; 
Exclusions: 51; 
Percentage: 2.3%. 

Provider type: Other; 
Exclusions: 43; 
Percentage: 2.0%. 

Provider type: Other centers, clinics, or facilities; 
Exclusions: 42; 
Percentage: 1.9%. 

Provider type: Medical practices; 
Exclusions: 39; 
Percentage: 1.8%. 

Provider type: Medical transportation companies; 
Exclusions: 34; 
Percentage: 1.6%. 

Provider type: Dental clinics or practices; 
Exclusions: 28; 
Percentage: 1.3%. 

Provider type: Government employees, contractors, or grantees; 
Exclusions: 12; 
Percentage: 0.5%. 

Provider type: Pharmaceutical manufacturers or suppliers; 
Exclusions: 9; 
Percentage: 0.4%. 

Provider type: Hospitals; 
Exclusions: 8; 
Percentage: 0.4%. 

Provider type: Management service providers; 
Exclusions: 6; 
Percentage: 0.3%. 

Provider type: Insurance companies; 
Exclusions: 3; 
Percentage: 0.1%. 

Provider type: Unaffiliated individuals; 
Exclusions: 1; 
Percentage: 0.0%. 

Provider type: Total; 
Exclusions: 2,190. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General data. 

Notes: Data in this table are for calendar year 2010 and do not 
include cases also resulting in a civil monetary penalty imposed by 
HHS-OIG. 

[End of table] 

There were a number of reasons why the 2,190 individuals and entities 
were excluded; about 42 percent were excluded for license revocation, 
suspension, or surrender; over 28 percent were for program-related 
convictions; and about 10 percent were for felony health care fraud 
convictions. Most of those excluded because of revoked, suspended, or 
surrendered licenses were in the nursing profession. (See table 13 for 
additional information on the reasons for excluding individuals in 
2010.) 

Table 13: Number of Exclusions from Program Participation by Reason, 
2010: 

Exclusion reasons: License revocation/suspension/surrender; 
Number of exclusions: 909; 
Percentage: 41.5%. 

Exclusion reasons: Program-related conviction; 
Number of exclusions: 619; 
Percentage: 28.3%. 

Exclusion reasons: Felony health care fraud conviction; 
Number of exclusions: 228; 
Percentage: 10.4%. 

Exclusion reasons: Patient abuse/neglect conviction; 
Number of exclusions: 185; 
Percentage: 8.4%. 

Exclusion reasons: Felony controlled substance conviction; 
Number of exclusions: 142; 
Percentage: 6.5%. 

Exclusion reasons: Federal/state health care program 
exclusion/suspension; 
Number of exclusions: 35; 
Percentage: 1.6%. 

Exclusion reasons: Entity owned/controlled by excluded/convicted 
individual; 
Number of exclusions: 32; 
Percentage: 1.5%. 

Exclusion reasons: Conviction relating to program or health care fraud; 
Number of exclusions: 17; 
Percentage: 0.8%. 

Exclusion reasons: Fraud/kickbacks; 
Number of exclusions: 10; 
Percentage: 0.5%. 

Exclusion reasons: Individual controlling excluded/convicted entity; 
Number of exclusions: 5; 
Percentage: 0.2%. 

Exclusion reasons: Obstruction of an investigation conviction; 
Number of exclusions: 4; 
Percentage: 0.2%. 

Exclusion reasons: Failure to grant immediate access; 
Number of exclusions: 2; 
Percentage: 0.1%. 

Exclusion reasons: Misdemeanor controlled substance conviction; 
Number of exclusions: 2; 
Percentage: 0.1%. 

Exclusion reasons: Total; 
Number of exclusions: 2,190. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General (HHS-OIG) data. 

Notes: Data in this table are for calendar year 2010 and do not 
include cases resulting in a civil monetary penalty imposed by HHS-OIG. 

[End of table] 

Home Health Providers Were the Largest Percentage of Criminal 
Convictions for MFCUs, and Pharmaceutical Manufacturers Were Ordered 
to Pay the Most in Civil Cases: 

Data we received from 10 state MFCUs show that more than 40 percent of 
the fraud subjects were home health care providers, and health care 
practitioners. Home health care providers also accounted for nearly 40 
percent of criminal convictions and about 45 percent of subjects 
sentenced in 2010. 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).[Footnote 
36] Home health care providers and pharmaceutical manufacturers are 
the two provider categories that experienced the highest increases 
when comparing 2005 and 2010 data. For example, the number of home 
health care providers suspected of fraud increased significantly from 
2005 to 2010, from 357 subjects to 730, a 104 percent increase. This 
was primarily driven by an increase in fraud cases among health care 
aides, which increased from 79 subjects in 2005 to 324 in 2010. 
Similarly, the number of pharmaceutical manufacturers in fraud cases 
increased significantly from 71 in 2005 to 296 in 2010. (See table 14, 
below, for additional information on provider types referred to MFCUs 
in fraud investigations.) 

Table 14: Number of Subjects of Health Care Fraud Referred to 10 
Medicaid Fraud Control Units (MFCU) for Investigation, by Provider 
Type, 2005 and 2010: 

Provider category: Home health care providers; 
2005: 
Total number of fraud subjects that were referred for investigation: 
357; 
Percentage of total number of subjects referred: 16.4%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
730; 
Percentage of total number of subjects referred: 26.6%. 

Provider category: Health care practitioners; 
2005: 
Total number of fraud subjects that were referred for investigation: 
487; 
Percentage of total number of subjects referred: 22.3%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
406; 
Percentage of total number of subjects referred: 14.8%. 

Provider category: Other health care services; 
2005: 
Total number of fraud subjects that were referred for investigation: 
384; 
Percentage of total number of subjects referred: 17.6%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
384; 
Percentage of total number of subjects referred: 14.0%. 

Provider category: Pharmaceutical manufacturers; 
2005: 
Total number of fraud subjects that were referred for investigation: 
71; 
Percentage of total number of subjects referred: 3.3%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
296; 
Percentage of total number of subjects referred: 10.8%. 

Provider category: Durable medical equipment suppliers; 
2005: 
Total number of fraud subjects that were referred for investigation: 
143; 
Percentage of total number of subjects referred: 6.6%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
214; 
Percentage of total number of subjects referred: 7.8%. 

Provider category: Dentists; 
2005: 
Total number of fraud subjects that were referred for investigation: 
125; 
Percentage of total number of subjects referred: 5.7%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
184; 
Percentage of total number of subjects referred: 6.7%. 

Provider category: Long-term care facilities; 
2005: 
Total number of fraud subjects that were referred for investigation: 
111; 
Percentage of total number of subjects referred: 5.1%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
157; 
Percentage of total number of subjects referred: 5.7%. 

Provider category: Management service providers; 
2005: 
Total number of fraud subjects that were referred for investigation: 
211; 
Percentage of total number of subjects referred: 9.7%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
148; 
Percentage of total number of subjects referred: 5.4%. 

Provider category: Pharmacies; 
2005: 
Total number of fraud subjects that were referred for investigation: 
179; 
Percentage of total number of subjects referred: 8.2%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
120; 
Percentage of total number of subjects referred: 4.4%. 

Provider category: Hospitals and other medical facilities[A]; 
2005: 
Total number of fraud subjects that were referred for investigation: 
113; 
Percentage of total number of subjects referred: 5.2%; 
2010: 
Total number of fraud subjects that were referred for investigation: 
103; 
Percentage of total number of subjects referred: 3.8%. 

Provider category: Total; 
2005: Total number of fraud subjects that were referred for 
investigation: 2,181; 
2010: Total number of fraud subjects that were referred for 
investigation: 2,742. 

Source: GAO analysis of state MFCU data submitted by California, 
Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 
Texas, and Virginia, October and November 2011. 

Notes: Data in this table are for calendar years 2005 and 2010. 

Data in this table are for fraud in Medicaid and the Children's Health 
Insurance Program (CHIP); however, the data may also include some 
health care fraud cases involving Medicare. 

Each instance of fraud in the data submitted by the 10 MFCUs 
represents one individual, facility, or organization that is referred 
to as the subject of a fraud case. Fraud subjects may be an 
individual, such as a dentist or a nurse, an organization such as a 
pharmaceutical manufacturer, or a facility such as a hospital. Several 
subjects may be investigated in one fraud case; however, in the MFCU 
data submitted each subject in a fraud case is counted separately. 

Data received from the state MFCUs included information for any 
actions--such as indictments, convictions, or penalties--that occurred 
on a subject's fraud case in 2005 or 2010. For example, if a subject 
was indicted in 2004 and sentenced in 2005, the MFCU data would only 
include information about the subject's sentencing in 2005, because 
the indictment occurred in a year outside of our data request. 

[A] In this table, hospitals and other medical facilities includes 
hospitals, radiology services, and substance abuse treatment centers. 

[End of table] 

Over half of the MFCUs' subjects of fraud cases in 2010 were referred 
by the states' Medicaid agencies (30.9 percent) and private citizens 
(25.1 percent). MFCUs do not pursue all cases of health care fraud 
that are referred to them. 

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. Home health care providers also accounted for 
nearly 40 percent of criminal fraud convictions in 2010; health care 
practitioners--physicians, doctors of osteopathy, nurses, physician 
assistants, and nurse practitioners--had the second-highest percentage 
of criminal convictions in 2010 with approximately 16 percent. The 
number of home health care providers convicted in criminal cases more 
than doubled from 79 convictions in 2005 to 192 convictions in 2010, 
and health care practitioners had an increase of 11 convictions 
compared to 2005. (See table 15 for additional information about 
criminal case outcomes and prosecutions of subjects by provider type 
for cases handled by 10 MFCUs.) 

[Side bar: Example of a Criminal Health Care Fraud Case Handled by an 
MFCU: 
In 2010, several home health care aides were convicted for submitting 
false time sheets to their employers, either billing for hours that 
were not worked or billing for services that patients did not need. 
This caused the home health agency they worked for to submit bills to 
Medicaid for services the aides did not provide. End of side bar] 

Table 15: Outcomes for Subjects of Criminal Health Care Fraud Cases 
Handled by 10 Medicaid Fraud Control Units (MFCU), by Provider Type, 
2010: 

Number of subjects: 

Provider category: Home health care providers; 
Indicted/charged: 271; 
Convicted: 192; 
Acquitted: 1; 
Dismissed: 6; 
Other results[A]: 4. 

Provider category: Health care practitioners; 
Indicted/charged: 95; 
Convicted: 76; 
Acquitted: 2; 
Dismissed: 9; 
Other results[A]: 2. 

Provider category: Other health care services; 
Indicted/charged: 88; 
Convicted: 73; 
Acquitted: 0; 
Dismissed: 16; 
Other results[A]: 3. 

Provider category: Management service providers; 
Indicted/charged: 70; 
Convicted: 67; 
Acquitted: 0; 
Dismissed: 22; 
Other results[A]: 0. 

Provider category: Durable medical equipment suppliers; 
Indicted/charged: 89; 
Convicted: 46; 
Acquitted: 3; 
Dismissed: 14; 
Other results[A]: 2. 

Provider category: Pharmacies; 
Indicted/charged: 27; 
Convicted: 19; 
Acquitted: 0; 
Dismissed: 6; 
Other results[A]: 0. 

Provider category: Long-term care facilities; 
Indicted/charged: 5; 
Convicted: 7; 
Acquitted: 0; 
Dismissed: 3; 
Other results[A]: 0. 

Provider category: Dentists; 
Indicted/charged: 38; 
Convicted: 5; 
Acquitted: 0; 
Dismissed: 4; 
Other results[A]: 1. 

Provider category: Hospitals and other medical facilities[B]; 
Indicted/charged: 9; 
Convicted: 3; 
Acquitted: 0; 
Dismissed: 2; 
Other results[A]: 0. 

Provider category: Pharmaceutical manufacturers; 
Indicted/charged: 0; 
Convicted: 0; 
Acquitted: 0; 
Dismissed: 2; 
Other results[A]: 0. 

Provider category: Total; 
Indicted/charged: 692; 
Convicted: 488; 
Acquitted: 6; 
Dismissed: 84; 
Other results[A]: 12. 

Source: GAO analysis of state MFCU data submitted by California, 
Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 
Texas, and Virginia, October and November 2011. 

Notes: Data in this table are for calendar year 2010. 

Data in this table are for fraud in Medicaid and the Children's Health 
Insurance Program (CHIP); however, the data may also include some 
health care fraud cases involving Medicare. 

Each instance of fraud in the data submitted by the 10 MFCUs 
represents one individual, facility, or organization that is referred 
to as the subject of a fraud case. Fraud subjects may be an 
individual, such as a dentist or a nurse, an organization such as a 
pharmaceutical manufacturer, or a facility such as a hospital. Several 
subjects may be investigated in one fraud case; however, in the MFCU 
data submitted each subject in a fraud case is counted separately. 

Data received from the state MFCUs included information for any 
actions--such as indictments, convictions, or penalties--that occurred 
on a subject's fraud case in 2005 or 2010. For example, if a subject 
was indicted in 2004 and sentenced in 2005, the MFCU data would only 
include information about the subject's sentencing in 2005, because 
the indictment occurred in a year outside of our data request. 

[A] This would include subjects whose cases resulted in diversions and 
other criminal case outcomes that were not included in the convicted 
column of this table. 

[B] In this table, hospitals and other medical facilities includes 
hospitals, radiology services, and substance abuse treatment centers. 

[End of table] 

According to 2010 data for cases handled by the 10 MFCUs, home health 
care providers had the largest number of subjects sentenced to 
incarceration, probation, or other criminal case outcomes, accounting 
for nearly 45 percent of the total number of subjects. Durable medical 
equipment suppliers accounted for the largest monetary penalties, yet 
had relatively few subjects sentenced to incarceration, probation, or 
other criminal case outcomes, such as deferred sentences. Of all of 
the subjects sentenced, 42 percent were sentenced to probation, 32 
percent were sentenced to incarceration, and 26 percent received other 
criminal case outcomes.[Footnote 37] (See table 16 for additional 
information on criminal case outcomes.) 

Table 16: Criminal Case Sentencing Outcomes for Subjects of Health 
Care Fraud Cases Handled by 10 Medicaid Fraud Control Units (MFCU), by 
Provider Type, 2010: 

Provider category: Home health care providers; 
Number of subjects sentenced to incarceration: 107; 
Number of subjects sentenced to probation: 135; 
Number of subjects with other criminal case outcomes: 121; 
Total number of subjects sentenced: 363; 
Percent of total number sentenced: 44.5%; 
Total amounts of monetary penalties ordered to pay[A]: $7,471,691; 
Percent of total monetary penalties ordered to pay: 9.6%. 

Provider category: Health care practitioners; 
Number of subjects sentenced to incarceration: 41; 
Number of subjects sentenced to probation: 60; 
Number of subjects with other criminal case outcomes: 23; 
Total number of subjects sentenced: 124; 
Percent of total number sentenced: 15.2%; 
Total amounts of monetary penalties ordered to pay[A]: $16,741,992; 
Percent of total monetary penalties ordered to pay: 21.6%. 

Provider category: Management service providers; 
Number of subjects sentenced to incarceration: 45; 
Number of subjects sentenced to probation: 54; 
Number of subjects with other criminal case outcomes: 17; 
Total number of subjects sentenced: 116; 
Percent of total number sentenced: 14.2%; 
Total amounts of monetary penalties ordered to pay[A]: $10,067,803; 
Percent of total monetary penalties ordered to pay: 13.0%. 

Provider category: Other health care services; 
Number of subjects sentenced to incarceration: 36; 
Number of subjects sentenced to probation: 50; 
Number of subjects with other criminal case outcomes: 24; 
Total number of subjects sentenced: 110; 
Percent of total number sentenced: 13.5%; 
Total amounts of monetary penalties ordered to pay[A]: $10,162,549; 
Percent of total monetary penalties ordered to pay: 13.1%. 

Provider category: Durable medical equipment suppliers; 
Number of subjects sentenced to incarceration: 25; 
Number of subjects sentenced to probation: 20; 
Number of subjects with other criminal case outcomes: 6; 
Total number of subjects sentenced: 51; 
Percent of total number sentenced: 6.3%; 
Total amounts of monetary penalties ordered to pay[A]: $25,615,519; 
Percent of total monetary penalties ordered to pay: 33.0%. 

Provider category: Pharmacies; 
Number of subjects sentenced to incarceration: 7; 
Number of subjects sentenced to probation: 13; 
Number of subjects with other criminal case outcomes: 11; 
Total number of subjects sentenced: 31; 
Percent of total number sentenced: 3.8%; 
Total amounts of monetary penalties ordered to pay[A]: $7,287,855; 
Percent of total monetary penalties ordered to pay: 9.4%. 

Provider category: Long-term care facilities; 
Number of subjects sentenced to incarceration: 2; 
Number of subjects sentenced to probation: 5; 
Number of subjects with other criminal case outcomes: 5; 
Total number of subjects sentenced: 12; 
Percent of total number sentenced: 1.5%; 
Total amounts of monetary penalties ordered to pay[A]: $22,034; 
Percent of total monetary penalties ordered to pay: 0.03%. 

Provider category: Dentists; 
Number of subjects sentenced to incarceration: 2; 
Number of subjects sentenced to probation: 3; 
Number of subjects with other criminal case outcomes: 1; 
Total number of subjects sentenced: 6; 
Percent of total number sentenced: 0.7%; 
Total amounts of monetary penalties ordered to pay[A]: $26,760; 
Percent of total monetary penalties ordered to pay: 0.03%. 

Provider category: Hospitals and other medical facilities[B]; 
Number of subjects sentenced to incarceration: 0; 
Number of subjects sentenced to probation: 1; 
Number of subjects with other criminal case outcomes: 2; 
Total number of subjects sentenced: 3; 
Percent of total number sentenced: 0.4%; 
Total amounts of monetary penalties ordered to pay[A]: $265,308; 
Percent of total monetary penalties ordered to pay: 0.3%. 

Provider category: Pharmaceutical manufacturers; 
Number of subjects sentenced to incarceration: 0; 
Number of subjects sentenced to probation: 0; 
Number of subjects with other criminal case outcomes: 0; 
Total number of subjects sentenced: 0; 
Percent of total number sentenced: 0.0; 
Total amounts of monetary penalties ordered to pay[A]: 0; 
Percent of total monetary penalties ordered to pay: 0.0. 

Provider category: Total; 
Number of subjects sentenced to incarceration: 265; 
Number of subjects sentenced to probation: 341; 
Number of subjects with other criminal case outcomes: 210; 
Total number of subjects sentenced: 816; 
Total amounts of monetary penalties ordered to pay[A]: $77,661,510. 

Source: GAO analysis of state MFCU data submitted by California, 
Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 
Texas, and Virginia, October and November 2011. 

Notes: Data in this table are for calendar year 2010. 

Data in this table are for fraud in Medicaid and the Children's Health 
Insurance Program (CHIP); however, the data may also include some 
health care fraud cases involving Medicare. 

Each instance of fraud in the data submitted by the 10 MFCUs 
represents one individual, facility, or organization that is referred 
to as the subject of a fraud case. Fraud subjects may be an individual 
such as a dentist or a nurse, an organization such as a pharmaceutical 
manufacturer, or a facility such as a hospital. Several subjects may 
be investigated in one fraud case; however, in the MFCU data submitted 
each subject in a fraud case is counted separately. 

Data received from the state MFCUs included information for any 
actions--such as indictments, convictions, or penalties--that occurred 
on a subject's fraud case in 2005 or 2010. For example, if a subject 
was indicted in 2004 and sentenced in 2005, the MFCU data would only 
include information about the subject's sentencing in 2005, because 
the indictment occurred in a year outside of our data request. 

[A] Monetary penalties include subjects being ordered to pay fines, 
restitution to the Medicaid program, and investigative costs. 

[B] In this table, hospitals and other medical facilities includes 
hospitals, radiology services, and substance abuse treatment centers. 

[End of table] 

Pharmaceutical Manufacturers Were Ordered to Pay More Than 60 Percent 
of the Civil Judgments and Settlements in 2010: 

In 2010, cases handled by the 10 MFCUs involving pharmaceutical 
manufacturers resulted in the largest amount of civil judgments and 
settlements, totaling $509.4 million and representing about 62 percent 
of all judgments and settlements. According to the 2010 data, 360 
subjects were ordered to pay nearly $829 million in civil judgments or 
settlements. This represents an increase of 71 percent in the number 
of subjects compared to 2005 when 211 subjects were ordered to pay 
over $808 million in civil judgments or settlements. In 2010, cases 
involving home health care providers had the third-highest number of 
civil judgments and settlements, and the second-lowest amounts of 
monetary penalties; conversely, there were relatively few management 
service provider subjects, yet those were the second-highest monetary 
penalty amounts among the categories of providers. (See table 17 for 
additional information on civil judgments and settlements by provider 
type.) 

[Side bar: Example of a Civil Health Care Fraud Case Handled by an 
MFCU: 
A pharmaceutical manufacturer agreed to pay a settlement of more than 
$500 million in 2010 for off-label marketing of a prescription drug. 
The settlement would reimburse Medicaid and other health care programs 
for harm suffered by this conduct.The manufacturer promoted the drug 
for uses that were not approved to primary care physicians in addition 
to psychiatrists, and for off-label use in children, adolescents and 
dementia patients. These uses were not medically accepted indications 
and were uses for which state Medicaid programs would not have 
approved reimbursement. End of side bar] 

Table 17: Civil Judgments or Settlements for Subjects of Health Care 
Fraud Cases Handled by 10 Medicaid Fraud Control Units (MFCU) by 
Provider Type, 2005 and 2010: 

Provider category: Pharmaceutical manufacturers; 
2005: 
Total number of civil judgments or settlements: 26; 
Total amount defendants ordered to pay: $360,464,411; 
2010: 
Total number of civil judgments or settlements: 111; 
Total amount defendants ordered to pay: $509,372,944. 

Provider category: Other health care services; 
2005: 
Total number of civil judgments or settlements: 27; 
Total amount defendants ordered to pay: $20,653,844; 
2010: 
Total number of civil judgments or settlements: 54; 
Total amount defendants ordered to pay: $81,351,840. 

Provider category: Home health care providers; 
2005: 
Total number of civil judgments or settlements: 22; 
Total amount defendants ordered to pay: $15,977,759; 
2010: 
Total number of civil judgments or settlements: 43; 
Total amount defendants ordered to pay: $1,347,230. 

Provider category: Health care practitioners; 
2005: 
Total number of civil judgments or settlements: 23; 
Total amount defendants ordered to pay: $7,827,100; 
2010: 
Total number of civil judgments or settlements: 33; 
Total amount defendants ordered to pay: $5,688,174. 

Provider category: Management service providers; 
2005: 
Total number of civil judgments or settlements: 13; 
Total amount defendants ordered to pay: $258,291,795; 
2010: 
Total number of civil judgments or settlements: 27; 
Total amount defendants ordered to pay: $129,634,819. 

Provider category: Pharmacies; 
2005: 
Total number of civil judgments or settlements: 27; 
Total amount defendants ordered to pay: $52,040,671; 
2010: 
Total number of civil judgments or settlements: 24; 
Total amount defendants ordered to pay: $48,985,438. 

Provider category: Hospitals and other medical facilities[A]; 
2005: 
Total number of civil judgments or settlements: 23; 
Total amount defendants ordered to pay: $87,481,318; 
2010: 
Total number of civil judgments or settlements: 21; 
Total amount defendants ordered to pay: $26,872,521. 

Provider category: Long-term care facilities; 
2005: 
Total number of civil judgments or settlements: 20; 
Total amount defendants ordered to pay: $1,115,974; 
2010: 
Total number of civil judgments or settlements: 18; 
Total amount defendants ordered to pay: $258,552. 

Provider category: Dentists; 
23005: 
Total number of civil judgments or settlements: 13; 
Total amount defendants ordered to pay: $1,466,934; 
2010: 
Total number of civil judgments or settlements: 17; 
Total amount defendants ordered to pay: $9,263,750. 

Provider category: Durable medical equipment suppliers; 
2005: 
Total number of civil judgments or settlements: 17; 
Total amount defendants ordered to pay: $2,951,298; 
2010: 
Total number of civil judgments or settlements: 12; 
Total amount defendants ordered to pay: $15,798,274. 

Provider category: Total; 
2005: 
Total number of civil judgments or settlements: 211; 
Total amount defendants ordered to pay: $808,271,103; 
2010: 
Total number of civil judgments or settlements: 360; 
Total amount defendants ordered to pay: $828,573,542. 

Source: GAO analysis of state MFCU data submitted by California, 
Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 
Texas, and Virginia, October and November 2011. 

Notes: Data in this table are for calendar years 2005 and 2010. 

Data in this table are for fraud in Medicaid and the Children's Health 
Insurance Program (CHIP); however, the data may also include some 
health care fraud cases involving Medicare. 

Each instance of fraud in the data submitted by the 10 MFCUs 
represents one individual, facility, or organization that is referred 
to as the subject of a fraud case. Fraud subjects may be an individual 
such as a dentist or a nurse, an organization such as a pharmaceutical 
manufacturer, or a facility such as a hospital. Several subjects may 
be investigated in one fraud case; however, in the MFCU data submitted 
each subject in a fraud case is counted separately. 

Data received from the state MFCUs included information for any 
actions--such as indictments, convictions, or penalties--that occurred 
on a subject's fraud case in 2005 or 2010. For example, if a subject 
was indicted in 2004 and sentenced in 2005, the MFCU data would only 
include information about the subject's sentencing in 2005, because 
the indictment occurred in a year outside of our data request. 

[A] In this table, hospitals and other medical facilities includes 
hospitals, radiology services, and substance abuse treatment centers. 

[End of table] 

Agency Comments: 

GAO provided a draft of the report to DOJ and HHS. DOJ provided 
technical comments, which have been incorporated as appropriate. HHS 
did not comment on the draft. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Secretaries of Health and Human Services and Justice, the Inspector 
General of HHS, and other interested parties. In addition, the report 
will be available at no charge on the GAO website at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7114 or kingk@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix III. 

Signed by: 

Kathleen M. King: 
Director, Health Care: 

[End of section] 

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. 
Attorneys (EOUSA)--which provides administrative support for the 94 
U.S. Attorney's Offices (USAO)--and DOJ's Civil Division.[Footnote 38] 
We obtained data on fraud cases involving Medicare, Medicaid, and CHIP 
that were closed in calendar year 2005 or 2010. We collected data for 
closed cases only--meaning that the agencies were no longer actively 
investigating or prosecuting a case--to avoid concerns about analyzing 
or reporting information about open cases. 

We obtained data from HHS-OIG's Investigative Reporting and 
Information System, which contains information on health care fraud 
cases received or investigated by HHS-OIG. The data we received 
contained information on civil and criminal health care fraud cases 
closed in calendar years 2005 or 2010, as well as exclusions from 
program participation. The HHS-OIG data included information about the 
subjects, sources of the cases, outcomes of the investigations and 
prosecutions (if the cases were pursued), and the reasons for which 
the cases were closed (such as lack of evidence). The data we received 
from HHS-OIG also contained information on the provider types of the 
subjects. 

Additionally, we obtained data from two divisions within DOJ--EOUSA 
and the Civil Division. The data we received from EOUSA was from the 
Legal Information Office Network System and contained information 
about the subjects of the fraud cases, outcomes of the prosecutions, 
and the reasons for which the cases were closed. Provider type is not 
a required field in the USAOs database; consequently the USAOs do not 
consistently have provider type information. DOJ's Civil Division 
provided us data from the CASES database. The data received contained 
information about the subjects, outcomes of the fraud cases, and 
reasons the cases were closed. The DOJ Civil Division does not collect 
information on the subject's provider type. The data we received from 
HHS-OIG pertained only to health care fraud in Medicare, Medicaid, and 
CHIP; however, data we received from the USAOs and DOJ's Civil 
Division may have also included other federal health care program 
fraud as well as fraud in the private sector as the databases used to 
track fraud cases do not capture fraud exclusively in Medicare, 
Medicaid, and CHIP. 

Many fraud cases are handled jointly with HHS-OIG, USAOs, and DOJ's 
Civil Division, and are entered separately into each agency's database 
that tracks fraud cases. As a result, the data we received contains 
duplicate information on health care fraud cases and subjects. In 
order to minimize the duplication across the data we received, we 
identified fraud case subjects that were in more than one data set we 
received by comparing subject information to the extent possible. We 
then excluded the duplicate data that we identified so that each 
subject was only included once. However, it is possible that our 
analysis still includes some duplication in fraud cases and subjects. 
For cases and subjects that we identified as a match, we used the 
information in the HHS-OIG data instead of either the USAO data or 
DOJ's Civil Division data because the HHS-OIG data contained 
information on the subject's provider type. Among the data involving 
criminal cases, we identified 590 subjects--291 subjects in the 2005 
data and 299 subjects in the 2010 data--that were matches between the 
HHS-OIG data and the USAO data. For civil case data, we identified 423 
subjects--166 subjects in the 2005 data and 257 subjects in the 2010 
data--that were matches between data we received from HHS-OIG, the 
USAOs, or DOJ's Civil Division. We removed the duplicate subjects we 
identified from parts of our analysis. 

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. To identify the type of provider for these 
subjects, we obtained information from court records using the Public 
Access to Court Electronic Records (PACER).[Footnote 39] 

We reviewed court documents, such as indictments and plea agreements, 
to obtain information on the subject's provider type. We reviewed 
information we found using PACER and categorized it into one of the 
provider categories in our analysis. However, our analysis of the 
changes in the types of providers in 2005 and 2010 is limited since 
the percentage of subjects for which we were unable to determine the 
provider type was substantially higher in 2005 for civil case 
subjects. One of the reasons we could not determine the provider type 
was because many of the court records for 2005 were not available in 
PACER. 

After we identified the provider types for data we received from USAOs 
and DOJ's Civil Division, and after reviewing the data on provider 
types in the HHS-OIG data, we created categories of providers in order 
to analyze the data. We assigned the subjects categories: the entity 
in which health care was provided, and the subject's role in providing 
care (if care was provided). For example, an owner of a durable 
medical equipment supply company was categorized into an entity 
(durable medical equipment supplier) and a role (management employee); 
a physician employed by a hospital would be categorized as hospital 
for the entity and physician for the role. Table 18 provides 
additional details about the categories we developed for our analysis. 

Table 18: Categories of Provider Types Developed for Analysis of 
Health Care Fraud Case Subjects: 

Entity: Dental clinics or practices; 
Types of providers included: Includes dentists, employees, and 
management who are employed by or operate dental clinics or practices; 
and entities that are dental clinics or practices. 

Entity: Durable medical equipment suppliers; 
Types of providers included: Includes employees and management--such 
as owners and operators--of durable medical equipment suppliers that 
provide medical equipment and supplies; and entities that are durable 
medical equipment suppliers themselves. This category includes many 
types of durable medical equipment such as diabetic supplies, hearing 
aids, home infusion, oxygen, and power vehicles. 

Entity: Government employees, contractors, or grantees; 
Types of providers included: Includes employees, contractors, 
grantees, nurses, management, or state, local, or tribal agencies that 
are affiliated with a government agency. This category includes 
federal government employees, government grantees, and contractors who 
have received government contracts. 

Entity: Health care providers with unknown affiliation; 
Types of providers included: Includes physicians, physician 
assistants, nurses, health care aides, and employees whose affiliation 
we could not determine. This category includes physicians who may 
specialize in a particular area of medicine, such as cardiology, 
though we do not know where the physician practices. 

Entity: Home health agencies; 
Types of providers included: Includes employees, management, nurses, 
and health care aides who are employed by or operate home health 
agencies; and entities that are home health agencies themselves. 

Entity: Hospitals; 
Types of providers included: Includes employees, management, nurses, 
physicians, and pharmacists who are employed by hospitals; 
and entities that are hospitals themselves. This category also 
includes state and local government hospitals. 

Entity: Individuals with unknown affiliation; 
Types of providers included: Includes individuals and employees that 
we could not determine if they were health care providers or whether 
they were affiliated with a medical setting such as a hospital or 
medical center. 

Entity: Insurance companies; 
Types of providers included: Includes employees, management, nurses, 
and health care aides who are employed by or operate health insurance 
companies; and entities that are insurance companies themselves. This 
category includes private health insurance companies, health care 
conglomerates, health-maintenance organizations, and preferred 
provider organizations. 

Entity: Management service providers; 
Types of providers included: Includes employees and management who are 
employed by or operate companies that provide management services, 
such as billing, accounting, investing, or legal services; 
and entities that are companies that provide management services. 

Entity: Medical centers or clinics; 
Types of providers included: Includes employees, management, nurses, 
physicians, and health care aides who are employed by or operate 
medical centers, clinics, or facilities; and entities that are medical 
centers or clinics. This category includes clinics, such as intercare 
facilities, hospice clinics, and other clinics that specialize in a 
particular area of medicine. 

Entity: Medical practices; 
Types of providers included: Includes employees, management, nurses, 
physicians, and health care aides who are employed by or operate 
medical practices or medical groups; and entities that are medical 
practices themselves. This category includes medical practices that 
specialize in a particular area of medicine, such as cardiology or 
dermatology. 

Entity: Medical supply companies; 
Types of providers included: Includes employees and management who are 
employed by or operate medical supply manufacturers or suppliers; 
and entities that are medical supply manufacturers or suppliers 
themselves. 

Entity: Medical transportation companies; 
Types of providers included: Includes employees and management who are 
employed by or operate medical transportation companies, such as 
ambulance companies; and entities that are medical transportation 
companies themselves. 

Entity: Mental health centers or clinics; 
Types of providers included: Includes employees, management, and 
nurses who are employed by or operate mental health centers or clinics; 
and entities that are mental health centers or clinics themselves. 
This category includes community mental health centers, psychology 
practices, and counseling centers. 

Entity: Nursing homes; 
Types of providers included: Includes employees, management, nurses, 
and health care aides who are employed by or operate nursing homes, 
such as skilled nursing facilities, adult homes, and boarding homes; 
and entities that are nursing homes themselves. 

Entity: Other; 
Types of providers included: Includes private citizens or individuals 
who were either not health care providers or whose affiliation was 
unknown. 

Entity: Other centers, clinics, or facilities; 
Types of providers included: Includes employees, management, nurses, 
and health care aides who are employed by or operate centers, clinics, 
and facilities, such as laboratories, physical therapy clinics, and 
optical practices; and entities themselves. This category includes 
centers, clinics, and facilities that are not otherwise specified in 
the other categories such as medical clinics, hospitals, nursing 
homes, or mental health centers or clinics. 

Entity: Pharmaceutical manufacturers or suppliers; 
Types of providers included: Includes employees and management who are 
employed by or operate pharmaceutical manufacturing or supplying 
companies; and entities that are pharmaceutical manufacturers or 
suppliers themselves. 

Entity: Pharmacies; 
Types of providers included: Includes employees, management, and 
pharmacists who are employed by or operate pharmacies; 
and entities that are pharmacies themselves. 

Source: GAO analysis of data obtained from the Department of Health 
and Human Services' Office of Inspector General, U.S. Attorney's 
Offices, and the Department of Justice's Civil Division. 

[End of table] 

To assess the reliability of the data we received from HHS-OIG, USAOs, 
and DOJ's Civil Division, we interviewed officials from each of those 
agencies about the quality of the data, reviewed relevant 
documentation, and examined the data for reasonableness and internal 
consistency. We found these data were sufficiently reliable for the 
purposes of our report. 

[End of section] 

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. Using data about MFCUs collected by the Department of Health 
and Human Services' Office of Inspector General (HHS-OIG), we selected 
the 10 state MFCUs that collectively accounted for the majority of 
open fraud investigations, fraud indictments or charges, fraud 
convictions, MFCU grant expenditures, and number of MFCU staff for all 
MFCUs in fiscal year 2010. The state MFCUs we selected also 
represented over 40 percent of the civil settlements and judgments--
though we were not able to analyze fraud-specific civil settlements 
and judgments because the HHS-OIG data available do not separate out 
fraud settlements and judgments from abuse and neglect case 
settlements and judgments. The 10 selected MFCUs were in California, 
Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 
Texas, and Virginia.[Footnote 40] The 10 selected MFCUs accounted for 
66 percent of MFCU grant expenditures. (See table 19 for additional 
information about the MFCUs.) 

Table 19: Information about Health Care Fraud Handled by 10 State 
Medicaid Fraud Control Units (MFCU), Fiscal Year 2010: 

States: California; 
Open fraud investigations: 840; 
Fraud indictments/charges: 113; 
Fraud convictions: 104; 
Civil settlements/judgments[A]: 52; 
MFCU grant expenditures: $27,703,377; 
Number of MFCU staff: 185. 

States: Florida; 
Open fraud investigations: 628; 
Fraud indictments/charges: 73; 
Fraud convictions: 54; 
Civil settlements/judgments[A]: 73; 
MFCU grant expenditures: $15,629,601; 
Number of MFCU staff: 166. 

States: Illinois; 
Open fraud investigations: 186; 
Fraud indictments/charges: 15; 
Fraud convictions: 23; 
Civil settlements/judgments[A]: 18; 
MFCU grant expenditures: $10,063,030; 
Number of MFCU staff: 69. 

States: Indiana; 
Open fraud investigations: 562; 
Fraud indictments/charges: 7; 
Fraud convictions: 14; 
Civil settlements/judgments[A]: 34; 
MFCU grant expenditures: $4,250,731; 
Number of MFCU staff: 44. 

States: Louisiana; 
Open fraud investigations: 276; 
Fraud indictments/charges: 79; 
Fraud convictions: 40; 
Civil settlements/judgments[A]: 30; 
MFCU grant expenditures: $4,616,945; 
Number of MFCU staff: 51. 

States: Massachusetts; 
Open fraud investigations: 278; 
Fraud indictments/charges: 16; 
Fraud convictions: 4; 
Civil settlements/judgments[A]: 36; 
MFCU grant expenditures: $4,710,043; 
Number of MFCU staff: 40. 

States: New York; 
Open fraud investigations: 588; 
Fraud indictments/charges: 83; 
Fraud convictions: 102; 
Civil settlements/judgments[A]: 124; 
MFCU grant expenditures: $40,520,980; 
Number of MFCU staff: 306. 

States: Ohio; 
Open fraud investigations: 457; 
Fraud indictments/charges: 105; 
Fraud convictions: 95; 
Civil settlements/judgments[A]: 42; 
MFCU grant expenditures: $5,346,883; 
Number of MFCU staff: 57. 

States: Texas; 
Open fraud investigations: 1,262; 
Fraud indictments/charges: 128; 
Fraud convictions: 80; 
Civil settlements/judgments[A]: 17; 
MFCU grant expenditures: $16,950,656; 
Number of MFCU staff: 183. 

States: Virginia; 
Open fraud investigations: 246; 
Fraud indictments/charges: 11; 
Fraud convictions: 11; 
Civil settlements/judgments[A]: 11; 
MFCU grant expenditures: $5,913,594; 
Number of MFCU staff: 70. 

States: 10-state total; 
Open fraud investigations: 5,323; 
Fraud indictments/charges: 630; 
Fraud convictions: 527; 
Civil settlements/judgments[A]: 437; 
MFCU grant expenditures: $135,705,840; 
Number of MFCU staff: 1,171. 

States: Total of all state MFCUs; 
Open fraud investigations: 9,710; 
Fraud indictments/charges: 1,048; 
Fraud convictions: 839; 
Civil settlements/judgments[A]: 1,077; 
MFCU grant expenditures: $205,500,671; 
Number of MFCU staff: 1,827.5. 

States: Percentage of national total represented by 10 selected MFCUs; 
Open fraud investigations: 54.8%; 
Fraud indictments/charges: 60.1%; 
Fraud convictions: 62.8%; 
Civil settlements/judgments[A]: 40.6%; 
MFCU grant expenditures: 66.0%; 
Number of MFCU staff: 64.1%. 

Source: GAO analysis of the Department of Health and Human Services' 
Office of Inspector General (HHS-OIG) MFCU statistical data for fiscal 
year 2010. 

[A] Civil settlements and judgments data may include other cases in 
addition to health care fraud cases because the available HHS-OIG data 
includes both fraud cases and abuse and neglect cases. 

[End of table] 

We collected data from the state MFCUs by developing a standardized 
data-collection instrument based on the HHS-OIG's Quarterly 
Statistical MFCU Report Template and accompanying 
definitions.[Footnote 41] (See table 20 for additional information 
about the definitions for the categories of provider types.) 

Table 20: Categories of Provider Types Used in Data Collection 
Instrument Sent to State Medicaid Fraud Control Units for Analysis of 
Health Care Fraud Case Subjects: 

Entity: Management service providers; 
Types of providers included: Includes managed care organizations, or 
other entities providing health care on an arranged, prepaid fixed 
amount; organizations or individuals providing Medicaid program 
administration support; billing companies that prepare and submit 
health care claims for payment on behalf of a health care provider or 
providers; 
and other program related services. 

Entity: Dentists; 
Types of providers included: Includes those licensed by the state to 
provide professional dentistry services to individuals, and 
partnerships or other formal organization of dentists. 

Entity: Durable medical equipment suppliers; 
Types of providers included: Includes persons or facilities that sell 
or lease disposable or nondisposable medical equipment or supplies. 

Entity: Health care practitioners; 
Types of providers included: Includes physicians and doctors of 
osteopathy licensed to provide medical care, regardless of specialty, 
partnerships or other formal physician organizations; and nurses, 
physician assistants, dental hygienists, and nurse practitioners, and 
other providers of health care services, not otherwise listed, who are 
regulated by the state in some manner through professional licensure 
or registration. 

Entity: Home health care providers; 
Types of providers included: Includes home health agencies and home 
health care aides--nonprofessionally licensed individuals providing 
homemaker, housekeeping, or personal services to individuals, that are 
reimbursed by federally-funded health care programs. May also include 
in-home care providers, personal care aides, and relative care givers. 

Entity: Hospitals and other medical facilities; 
Types of providers included: Includes hospitals; radiology--a person 
or organization (other than radiologists, who would be reported as 
physicians) who provides X-ray, MRI, or other radiology imaging 
services; and substance abuse treatment centers. 

Entity: Nursing homes; 
Types of providers included: Includes all nursing facilities, licensed 
to provide skilled or intermediate care for individuals age 21 years 
or older, and other long-term care facilities such as those 
residential settings that provide nursing or personal care services 
for residents, regardless of age. 

Entity: Other health care services; 
Types of providers included: Includes podiatrists, optometrists and 
opticians, chiropractors, other practitioners, labs, mental health 
centers, clinics and facilities, including counselors and 
psychologists, and medical transportation providers. 

Entity: Pharmaceutical manufacturers; 
Types of providers included: Includes manufacturers of 
medicines/controlled substances that bill to federally funded health 
care programs. 

Entity: Pharmacies; 
Types of providers included: Includes a person or organization 
operating a facility where medicine is compounded and dispensed, 
including pharmacists. 

Source: GAO analysis of Department of Health and Human Services' 
Office of Inspector General documents. 

[End of table] 

Before finalizing the data-collection instrument, we asked officials 
from two MFCUs to review the instrument to determine if the instrument 
would elicit appropriate responses, and to identify any data that 
would be particularly challenging for a MFCU to provide. 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. 

We collected data for closed health care fraud cases only--meaning 
that agencies were no longer actively investigating or prosecuting a 
case--to avoid concerns about analyzing or reporting information about 
open cases. We requested data from the state MFCUs for any actions--
such as indictments, convictions, or penalties--that occurred on a 
subject's fraud case in 2005 or 2010. For example, if a subject was 
indicted in 2004 and sentenced in 2005, the MFCU data would only 
include information about the subject's sentencing in 2005, because 
the indictment occurred in a year outside of our data request. We 
requested aggregate subject-level data, rather than case-level data, 
from the MFCUs using a standardized data-collection 
instrument.[Footnote 42] The MFCUs reported information on the total 
number of fraud subjects they investigated and prosecuted, and did not 
provide detailed information for each instance of fraud. Because the 
state MFCUs may work together on certain cases that cross state lines, 
it is possible that duplicate data are included in our analysis. We 
relied on the data as reported by the 10 MFCUs and did not 
independently verify these data. However, we reviewed the data for 
reasonableness and followed up with state officials for clarification 
when necessary. We found that these data were sufficiently reliable 
for the purposes of our report. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Kathleen M. King, (202) 512-7114 or kingk@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, key contributors to this 
report were Martin T. Gahart, Assistant Director; Christie Enders; 
Jawaria Gilani; Dan Lee; Drew Long; Dawn Nelson; and Monica Perez-
Nelson. 

[End of section] 

Footnotes: 

[1] The Centers for Medicare & Medicaid Services (CMS)--an agency 
within the Department of Health and Human Services (HHS)--oversees 
Medicare, Medicaid, and CHIP. Medicare is the federal health insurance 
program for persons aged 65 or over, certain disabled individuals, and 
individuals with end-stage renal disease. Medicaid and CHIP are joint 
federal-state programs that finance health insurance coverage for 
certain categories of low-income adults and children. 

[2] In fiscal year 2011, Medicare expenditures totaled approximately 
$565.6 billion; federal Medicaid expenditures were nearly $275 
billion; and federal expenditures for CHIP were about $8.6 billion. 

[3] Fraud involves an intentional act or representation to deceive 
with the knowledge that the action or representation could result in 
gain. The Health Care Fraud and Abuse Control Program received just 
over $608 million in fiscal year 2011. See Department of Health and 
Human Services and Department of Justice, Health Care Fraud and Abuse 
Control Program Annual Report for Fiscal Year 2011: February 2012. The 
program, which is under the joint direction of the Attorney General 
and the Secretary of HHS, is designed to coordinate federal, state, 
and local law enforcement activities with respect to health care fraud 
and abuse. Additional funds to combat health care fraud spent by HHS 
and the Department of Justice (DOJ) are not included in this figure. 

[4] Subjects of health care fraud cases can be individuals, such as a 
dentist or a nurse; an organization, such as a pharmaceutical 
manufacturer; or a facility, such as a hospital. 

[5] See GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: February 
2011). 

[6] In this report, we use the term outcome to refer to the 
disposition of civil and criminal cases, which can include, among 
other things, convictions, monetary penalties, dismissals, and the 
decision not to pursue investigation or prosecution. 

[7] We have previously reported that although there have been 
convictions for multimillion dollar schemes that defrauded the 
Medicare program, the extent of the problem is unknown. There are no 
reliable estimates of the extent of fraud in the Medicare program or 
for the health care industry as a whole. See GAO, Medicare: Progress 
Made to Deter Fraud, but More Could Be Done, [hyperlink, 
http://www.gao.gov/products/GAO-12-801T] (Washington, D.C.: June 8, 
2012). 

[8] The USAOs are a division within DOJ that litigates both civil and 
criminal health care fraud cases in their districts throughout the 
country. Although the Federal Bureau of Investigation (FBI) 
investigates health care fraud and DOJ's Criminal Division prosecutes 
health care fraud, we did not obtain data from them because officials 
told us that the FBI and DOJ's Criminal Division primarily work on 
health care fraud cases jointly with the HHS-OIG or USAOs. Officials 
indicated that the vast majority of health care fraud cases handled by 
FBI and DOJ's Criminal Division would be entered in databases used 
either by HHS-OIG or USAOs. As a result, we did not request data from 
DOJ's Criminal Division or the FBI. 

[9] We chose calendar year 2010 since HHS-OIG and DOJ and its 
divisions received additional funding for health care fraud activities 
in fiscal year 2010 and it was the most-recent complete year of data 
available at the time of our request. We chose calendar year 2005 to 
compare data we received for 2010 because this was before the Deficit 
Reduction Act was enacted, which increased funding for antifraud 
activities. We use the term "cases" throughout this report to refer to 
any suspected fraud information that was received by HHS-OIG, USAOs, 
or DOJ's Civil Division regardless of whether the case was formally 
investigated or prosecuted. Additionally, we refer to any cases 
received by HHS-OIG as investigations regardless of the level of 
resources expended on the case. 

[10] For example, the subject of a fraud case could be a durable 
medical equipment supplier because the company billed for equipment 
that it did not provide, or could be an individual affiliated with the 
entity, such as an employee of a durable medical equipment supplier 
that billed for equipment not prescribed by a physician. In both of 
these examples, the entity involved is the durable medical equipment 
supplier, but in the first example the subject is the entity itself 
while in the second example the subject is an individual affiliated 
with the durable medical equipment supplier. In our analysis, we refer 
to subjects of fraud cases as the entities they are or the entities 
with which the individuals are affiliated. 

[11] Nationwide, in fiscal year 2010 the selected state MFCUs 
accounted for 54.8 percent of open fraud investigations; 60.1 percent 
of fraud indictments and charges; 62.8 percent of fraud convictions; 
40.6 percent of civil settlements and judgments; 66.0 percent of MFCU 
grant expenditures; and 64.1 percent of MFCU staff. 

[12] We did not receive complete CHIP fraud data from Florida, New 
York, and Texas because the MFCUs in these states do not investigate 
fraud in CHIP. In the other seven states, data on CHIP fraud were 
included. 

[13] We requested data from the state MFCUs for any actions--such as 
indictments, convictions, or penalties--that occurred on a subject's 
fraud case in 2005 or 2010. For example, if a subject was indicted in 
2004 and sentenced in 2005, the MFCU data would only include 
information about the subject's sentencing in 2005, because the 
indictment occurred in a year outside of our data request. 

[14] CMS and its contractors also conduct activities related to health 
care fraud. For example, CMS oversees the work of Zone Program 
Integrity Contractors, which are responsible for investigating 
potential fraud in Medicare fee-for-service in their assigned 
geographic area. These contractors identify suspect claims and 
provider billing patterns, investigate fraud leads, and refer 
suspected fraud cases to HHS-OIG. 

[15] The False Claims Act (FCA) prohibits certain actions, including 
the knowing presentation of a false claim for payment by the federal 
government. 31 U.S.C. § 3729(a)(1)(A). FCA claims may be brought by 
private persons--"relators" or "whistleblowers"--in the name of the 
government, alleging the submission of false claims. A qui tam case is 
a civil action brought by the relator for the person and for the 
government though the action is in the name of the government. In 
these qui tam cases, the relator can receive a portion of a monetary 
settlement, and reasonable expenses and attorneys' fees and costs. 31 
U.S.C. § 3730(b),(d). 

[16] Providers and individuals can be excluded for a variety of 
reasons other than for a health care fraud conviction, including 
licensure suspension, surrender, or revocation, patient abuse/neglect 
conviction, or felony controlled substance conviction. Under section 
1128 of the Social Security Act, exclusions from federal health 
programs are mandatory under certain circumstances and permissive in 
others. 42 U.S.C. § 1320a-7. 

[17] DOJ has to review and decide whether to intervene in qui tam 
cases within a statutorily specified amount of time. 

[18] The statutes included here provide examples of those that may be 
relevant to health care fraud cases. Other statutory provisions, 
including those located in title 18 of the United States Code, may 
also be relevant to such cases. See, e.g., 18 U.S.C. §§ 669 
(concerning theft or embezzlement in connection with health care ), 
1035 (concerning false statements relating to health care matters), 
and 1347 (concerning health care fraud). 

[19] 42 U.S.C. § 1320a-7a. 

[20] 42 U.S.C. § 1320a-7b. 

[21] 42 U.S.C. § 1320a-7b(b). 

[22] The Social Security Act prohibits payments to states for Medicaid 
services that would be prohibited by Medicare under the Stark law. 42 
U.S.C. § 1396b(s). 

[23] 42 U.S.C. § 1395nn(a)(1). 

[24] 21 U.S.C. § 331(a). 

[25] 31 U.S.C. §§ 3729-3733. 

[26] As previously mentioned, each fraud case can have more than one 
subject involved. According to 2010 data, there were 4,709 criminal 
cases and 1,024 civil cases. 

[27] The data we received from the USAOs and DOJ's Civil Division did 
not contain information on the source of the fraud case. However, 
officials from DOJ indicated that they generally receive fraud cases 
from HHS-OIG, the FBI, or from relators who have filed claims under 
the False Claims Act. 

[28] Subjects of the fraud cases could be the entities themselves, 
such as a durable medical equipment supplier that billed for equipment 
that it did not provide, or individuals affiliated with an entity, 
such as an employee of a durable medical equipment supplier that 
billed for equipment not prescribed by a physician. In both of these 
cases, the entity involved is the durable medical equipment supplier, 
but in the first example the subject is the entity itself while in the 
second example the subject is an individual affiliated with the 
durable medical equipment supplier. We generally refer to the subjects 
of fraud cases as the entities with which they are affiliated. 

[29] Subjects involved in cases where there was another outcome 
included subjects that had pretrial diversions, were charged in other 
cases, or were involved in cases that were transferred to another 
district. 

[30] An official at HHS-OIG told us that it captures information on 
whether the subjects were sentenced to be incarcerated but does not 
capture information on whether the subjects were sentenced to serve 
that term in jail or prison, and a USAO official indicated that 
subjects sentenced to incarceration serve those sentences in prison. 

[31] According to 2010 data from HHS-OIG, subjects of criminal cases 
were ordered to pay about $395 million in fines and $565 million in 
restitution. Although the subjects were ordered to pay these amounts, 
the amounts actually recovered from them may be less than what was 
ordered. HHS-OIG also receives recoveries, which is money returned 
administratively--such as through self-disclosure, demand letters, or 
prepayment prior to disposition--rather than settlements or judgments. 

[32] Nearly 15 percent of subjects were involved in cases where the 
case had another outcome, such as the case was transferred from the 
district or the court dismissed the case on a motion. Additionally, 
1.6 percent of subjects were involved in qui tam cases where there was 
a judgment for the opposing party. 

[33] According to 2010 data from HHS-OIG, subjects of civil cases were 
to pay about $633.4 million in fines and $1.474 billion in 
restitution. HHS-OIG also receives recoveries, which is money returned 
administratively--such as through self-disclosure, demand letters, or 
prepayment prior to disposition--rather than settlements or judgments. 

[34] As previously noted, HHS-OIG can exclude individuals and entities 
from program participation for a variety of reasons other than for a 
health care fraud conviction, including license suspension, surrender, 
or revocation. The exclusions data we received from HHS-OIG contains 
all exclusions, not those exclusively related to health care fraud 
convictions. 

[35] Additionally, HHS-OIG has the authority to impose a civil 
monetary penalty on anyone who employs an excluded individual or 
entity. 

[36] Each instance of fraud in the data submitted by the 10 MFCUs 
represents one individual, facility, or organization that is referred 
to as the subject of the fraud case. Fraud case subjects may be an 
individual, such as a dentist or a nurse; an organization, such as a 
pharmaceutical manufacturer; or a facility, such as a hospital. 
Several subjects may be investigated in one fraud case; however, in 
the 10 states' MFCU data submitted, each subject in a fraud case is 
counted separately. Home health care providers include home health 
agencies and home health care aides; and health care practitioners 
include physicians, doctors of osteopathy, nurses, physician 
assistants, and nurse practitioners. 

[37] Other criminal case outcomes may include deferred sentences, 
limits on future employment, or limits on contact with certain 
individuals. 

[38] Although the Federal Bureau of Investigation (FBI) investigates 
health care fraud, and DOJ's Criminal Division prosecutes health care 
fraud, we did not request data from them because officials told us 
that the FBI and DOJ's Criminal Division primarily work on health care 
fraud cases jointly with the HHS-OIG or USAOs. Officials indicated 
that the vast majority of health care fraud cases handled by FBI and 
DOJ's Criminal Division would be entered in databases used either by 
HHS-OIG or USAOs. 

[39] PACER is an electronic public access service that allows users to 
obtain case and docket information from federal appellate, district, 
and bankruptcy courts via the Internet. 

[40] We did not receive complete CHIP fraud data from Florida, New 
York, and Texas because the MFCUs in these states do not investigate 
fraud in CHIP. In the other seven states, data on CHIP fraud were 
included. 

[41] MFCUs are required to submit data to the HHS-OIG quarterly 
regarding the number of investigations, open investigations by 
provider type, criminal and civil case results, administrative actions 
ordered, and monetary collections resulting from criminal and civil 
judgments or settlements. 

[42] Each instance of fraud in the data submitted by the 10 MFCUs 
represents one individual, facility, or organization that is referred 
to as the subject of the fraud case. Fraud case subjects may be an 
individual such as a dentist or a nurse, an organization such as a 
pharmaceutical manufacturer, or a facility such as a hospital. Several 
subjects may be investigated in one fraud case; however, in the 10 
states' MFCU data each subject in a fraud case is counted separately. 

[End of section] 

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