March 22, 2011

OIG Fraud and Abuse Testimony Highlights Medicaid and Medicare Fraud Strike Forces, and Greater Use of Exclusionary Remedies for Officers and Management

On Wednesday March 2, 2011, several members of the Office of Inspector General (“OIG”) within the U.S. Department of Health and Human Service (“HHS”), including Inspector General Daniel R. Levinson, headed to Capitol Hill to testify before several House and Senate Committees on the topic of the OIG’s efforts to combat Medicare and Medicaid fraud and abuse.   While the testimony covered a broad scope of topics, from the OIG’s investigation recovery statistics to a discussion of the OIG partnership efforts with providers in combating fraud, the testimony placed special emphasis on the success of Medicare Fraud Strike Forces and the OIG’s intent to expand its use of exclusionary remedies against managers and executives of sanctioned companies.

Medicare Fraud Strike Forces are part of the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”), a collaboration between HHS and the Attorney General’s Office.  These Strike Forces are comprised of federal prosecutors from the Department of Justice and U.S. Attorneys Offices, and Special Agents from the OIG, the Federal Bureau of Investigation and, in some cases, state and local law enforcement agencies.

An important characteristic of these Medicare Fraud Strike Forces is that their investigations are largely data driven, although these teams also employ more traditional criminal intelligence gathering methods.   These Strike Forces utilize sophisticated data analysis tools to scour claims data in an attempt to identify suspicious billing patterns.    A variety of analysts, including statisticians, programmers, auditors, CMS program experts and contractors support this data analysis.  The OIG hailed these improved tools and support, as well as the ability to acquire claims data only two weeks after submission, as key factors in its efforts to combat fraud.

The testimony also clearly signaled the OIG’s intention to use its discretionary authority to exclude owners, management and officers of sanctioned companies from participating in federal health care programs “in a broader range of circumstances.”  While the OIG does not propose to exclude all such employees of a company convicted of a health care-related offense, Inspector General Levinson testified that “OIG will operate with a presumption in favor of the exclusion” of an executive if there is evidence that person “knew or should have known” of corporate wrongdoing. The OIG has published its own guidelines for implementing this “permissive exclusion” authority on its website.

While most providers already recognize the increased federal and state government resources devoted to fighting health care fraud, last week’s testimony highlights what the OIG views as the major tools and focus areas in its enforcement efforts.  One trend has already become clear: O’Connell & Aronowitz’s own Healthcare Fraud and Abuse Unit has already observed a greater emphasis on data-driven investigations in various healthcare enforcement and audit matters.

To view the testimony of HHS Inspector General Daniel R. Levinson before the Senate Committee on Finance, click here.

To view the testimony of HHS Chief Counsel to Inspector General Lewis Morris before the House Committee on Ways and Means, Subcommittee on Oversight click here.

To view the testimony of HHS Deputy Inspector General for Investigations Gerald T. Roy before the House Committee on Energy and Commerce, Subcommittee on Oversight & Investigations click here.

To view the testimony of HHS OIG Assistant Special Agent in Charge (Miami Regional Office) Omar Perez before the House Committee on Energy and Commerce, Subcommittee on Oversight & Investigations click here.

This post was contributed by David Nardolillo.