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What prompted the government to launch
its campaign against healthcare billing
fraud and abuse?
The genesis goes back to 1994, when Congress
received a variety of reports to the effect that
millions and millions—if not billions—of
dollars were being lost to the Medicare and
Medicaid programs through fraud and abuse.
One of the things that came out of the
congressional hearings was the enactment
of the Health Insurance Portability and
Accountability Act of 1996. HIPAA created
a series of new laws to deal with healthcare
fraud and abuse; it also provided a great deal
of funding for the Office of Inspector General
[OIG], the Department of Justice and the FBI
to deal with the problem.
With the financial resources that became
available, every U.S. Attorney’s office in the
country put together a healthcare fraud unit,
as did every major FBI field office. If my
memory serves me correctly, roughly 400
new prosecution slots and 1,000 new agent
slots resulted directly from HIPAA.
How widespread an impact has the
I believe the most recent available report is
for fiscal year 2002. That year, there were 361
criminal indictments involving 480 defendants,
more than 1,500 civil matters pending and 221
new civil cases filed. Also, the Department of
Health and Human Services excluded almost
3,500 individuals and entities from participating
in the Medicare and Medicaid programs.
The overall campaign reportedly will cost
at least $1 billion. Why has such an enor-
mous amount been invested in this?
When the campaign’s enforcement mechanism
was being set up, the OIG promised that for
every dollar devoted to enforcement, the
government would get back $10 from fines,
penalties, forfeitures and reimbursement.
And that is pretty much how it turned out.
In 2002 alone, for example, the government
continued on page 2 >
Uncle Sam’s War on Billing Fraud
How Any Physician Can Become a Target
Second Quarter 2005