Despite Budget Increase, Health Care Fraud Cases Decline

With the U.S. Department of Justice getting more money to fight health care fraud, one might expect an increase in convictions.

However, as the Center for Public Integrity reports, things didn’t work out that way last year. In 2009, despite a budget boost of $200 million, the number of criminal convictions for health care fraud actually edged down slightly, to 583, from 588 in 2008.

To be sure, the federal government has extracted a long string of huge fraud settlements from drug makers in the last couple of years, including $2.3 billion from Pfizer.

Still, figures show that not only did the number of convictions decline last year, but also the filing of new cases. According to a letter from Sen. Charles Grassley, R-Iowa, to Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius, the number of new criminal prosecutions, 481, was down 21 from the level of the previous year. Grassley’s letter requested further details about federal authorities’ efforts to crack down on health care fraud.

Addressing health care fraud has been a focus of the past two presidential administrations, with the aim of making Medicare and Medicaid more efficient. According to some estimates, up to 20 percent of Medicare spending is lost due to fraud and abuse.

In response, Holder and Sebelius created an interagency task force to build health care fraud cases in 2009. The new anti-fraud group, known by the acronym HEAT (Health Care Fraud Prevention and Enforcement Action Teams), had some high-profile successes, but did not lead to an increase in convictions.

This provoked the letter from Grassley, in which he wondered, “This raises a question of whether the focus of the HEAT initiative is actually redirecting resources away from overall criminal enforcement of health care laws.”

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