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the health care fraud unit


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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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