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MISSION
One of the primary missions of the Health Care Fraud Unit, established
in 1992 as a separate unit within the Financial Crimes Section
of the Criminal Investigative Division, is to insure the success
of investigations which have a national impact on the health
care fraud crime problem. We endeavor to accomplish this by concentrating
our investigative resources on multi-district investigations
of large health care corporations suspected of committing fraud
against both public and private payers of health care benefits,
and by coordinating these investigations with other law enforcement
and regulatory agencies.
These federal
agencies include, but are not limited to, the Department of Health
and Human Services Office of Inspector General (HHS-OIG) and
the Health Care Financing Administration, which administers both
the Medicare and Medicaid Programs. The private sector also plays
a role in these investigations. Through our liaison efforts,
we seek to identify new and emerging fraud schemes and insure
that our field offices are addressing the most current crime
problems.
No investigations
are actually conducted by the Health Care Fraud Unit. The Unit's
primary function is to support and provide guidance to our field
offices. Anyone with information on health care fraud is encouraged
to contact their local FBI field office and ask to speak with
the Health Care Fraud Supervisor. Anyone with information on
health care fraud, waste or abuse may also call the HHS - OIG
hotline, 1-800-HHS-TIPS.
RESPONSE TO CRIME PROBLEM
In
1999, annual health care expenditures in the United States totaled
nearly $1.1 trillion. Losses attributable to fraud and abuse
have been estimated, by some, to be as much as ten percent of
the nation's total annual health care expenditure.
Many of the FBI's
56 field offices rank health care fraud as their number one white
collar crime problem. Health care fraud offenses are being investigated
in every one of the FBI's field offices and many of our larger
offices have squads of agents whose sole responsibility is to
investigate health care fraud.
Due, in large
part, to the funding received as a result of the passage of the
Health Insurance Portability and Accountability Act of 1996 (HIPAA),
the FBI has been able to increase the number of Agents assigned
to health care fraud from 112 in 1992 to nearly 500 in 1999.
During this same time period, the number of active health care
fraud investigations has increased from 592 to over 3,000. Convictions
for health care related offenses increased from 116 to 548.
The measurement
of the FBI's success in addressing health care fraud cannot be
measured solely by convictions obtained but can be better measured
by the deterrent effect that our efforts have on those who may
be contemplating fraud. Recent reports have indicated that partially
due to the increased federal enforcement efforts, Medicare spending
did not rise to anticipated amounts last year.
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CAPABILITIES
The
FBI, as the principal investigative agency of the Department
of Justice, has authority to investigate all fraud committed
against the United States government. The FBI's authority to
investigate health care fraud extends beyond specified federal
programs such as Medicare and Medicaid, to include all victims
of the crime, whether government programs or private insurance
companies, business entities or individuals. Because health care
fraud investigations usually involve labor intensive record reviews
and interviews or the use of proactive investigative techniques
such as undercover operations, telephone intercepts, or video
and audio surveillance, the FBI is uniquely qualified to conduct
these types of investigations.
In addition to
traditional criminal investigations, the FBI has become increasingly
involved in the investigation of Qui Tams, or civil false claim
law suits, filed under seal by individuals, referred to as relators,
who allege fraud against the United States. The successful investigation
of these cases, by the FBI and other agencies, has returned hundreds
of millions of dollars to the Medicare Trust Fund. The next segment
will provide a synopsis of some recent FBI investigations wherein
the investigative techniques that have been discussed were used
to bring about successful resolutions.
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RECENT CASE SUMMARIES
In
one particular case, 20 individuals were convicted for their
involvement in a massive and sophisticated scheme to defraud
Medicare. The convictions arose from an approximately five-year
investigation of a home health agency that was the largest certified
home health agency in Miami. The home health agency was paid
approximately $120 million in Medicare funds for reimbursement
of services, including nursing and home health aide visits. These
billed services had either not been provided, were not necessary,
or were provided to persons who were not eligible. In some cases,
individuals were deceased when the billed services were reportedly
rendered. The two highest-level agency administrators admitted
to illegal hidden partnerships in hundreds of subcontractor groups
and involvement in hundreds of thousands of dollars of illegal
payments to numerous individuals from "professional beneficiaries,"
to home health aides, nurses, and doctors. The convicted defendants
received sentences ranging from 18 months imprisonment to, in
the case of the highest level administrator, 12 years imprisonment.
A single defendant returned $1.1 million in fraudulently obtained
assets.
As part of the
FBI's national strategy to address health care fraud, the Bureau
utilizes proactive investigative techniques, including the use
of undercover operations. A major FBI lead undercover investigation
culminated in 1999, with the last of over 40 subjects either
entering guilty pleas or being found guilty at trial as a result
of their participation in a fraud scheme that robbed the Medicare
Program of millions of dollars. During this investigation, the
FBI purchased a bogus home health agency and, through various
business dealings with the subjects, uncovered a system rampant
with fraud.
Recently, Fresenius
Medical Care North America, Inc., the world's largest provider
of kidney dialysis products and services, agreed to pay the United
States government $486 million to resolve a sweeping investigation
of health care fraud at National Medical Care, Inc. (NMC), Fresenius'
kidney dialysis subsidiary. This investigation related to the
conduct of NMC subsidiaries prior to its acquisition in 1996
by Fresenius Medical Care Holdings, Inc., a German corporation.
A three count indictment charging conspiracy and conspiracy to
defraud the United States by obtaining payment of false or fraudulent
claims was filed, and three NMC subsidiaries pled guilty to these
violations. A total criminal fine of $101 million and a civil
settlement of $385 million was announced. This amount is the
largest civil fraud recovery in history. Two former Vice Presidents
of the company have pled to criminal informations and three other
executives have been indicted and are awaiting trial. The criminal
violations related to the submission of claims for medically
unnecessary tests and the payment of kickbacks for referrals.
In another case,
Beverly Enterprises of California (BEC), a subsidiary of Beverly
Enterprises, Inc. (Beverly), pled guilty to a criminal information
charging BEC with criminal mail fraud and making false statements
to Medicare. Beverly will also pay a five million dollar criminal
fine. Additionally, a civil settlement was also announced, whereby
Beverly will pay the United States government $170 million and
selected Beverly nursing homes will divest from the company.
Beverly was required to pay $25 million within 30 days with the
remaining $145 million payable over an eight-year period.
These four cases
illustrate the diversity of the FBI's involvement in health care
fraud enforcement. As is true of many FBI investigations, these
cases were the result of joint investigations with other agencies.
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