HCFAC 2014: A Drop in Recoveries and in New Cases

The Health Care Fraud and Abuse Control Program (HCFAC), the key funding source for DOJ and HHS/OIG in fighting health care fraud, issues detailed yearly reports that are viewed by many to be a barometer of fraud and abuse enforcement efforts.  While conclusions can’t be reached based solely on the numbers reported in a single year, since DOJ and OIG regularly issue press releases  announcing “Record Years” or “Record Settlements,” side by side comparisons of the yearly numbers — such as those made in this article — are fair game.
HCFAC 2014 Reports that False Claims Act Recoveries Were Down Almost 25%

According to HCFAC 2014, DOJ and OIG won or negotiated $3.3 billion in 2014 as compared to $4.2 billion and $4.3 billion in the prior two years.  Health care fraud judgments and settlements also dropped, though not quite as steeply, from $3.0 billion in 2012 and $2.6 billion in 2013 to $2.3 billion in 2014.  The amounts returned to Medicare and Medicaid, the critical numbers in the view of many, dropped proportionately to $1.9 from $2.3 billion and from $835.7 million to $523 million for Medicare and Medicaid comparing 2012 to 2014.    There may, of course, be several explanations for the  drop, but it is worth keeping an eye on the numbers to see what, if anything, it means — particularly when one considers that …

New Civil and Criminal Health Care Investigations Also Dropped in 2014

Whereas the lower recoveries were not a big surprise to health care observers as 2014 had been shaping up as an “off” year for awhile, but the same cannot be said for the across the board drops in new civil and criminal health care fraud investigations that was found in HCFAC 2014.  New DOJ civil investigations in 2014 declined by 20% as compared to 2013 and by about 10% as compared to 2012 (there were 782 new investigations in 2014 compared to 1083 and 885 in the prior two years), and new criminal investigations found similar drops with only the years being reversed.  That is, DOJ opened 924 new criminal health care fraud investigations in 2014 which represented about a 20% drop from the 1131 in 2012 and 10% from the 1013 new cases opened in 2013.

Can Conclusions be Reached from these Numbers?

The short answer is “NO.”  But, on the other hand, speculation and a wait and see attitude is probably an appropriate response.  Perhaps recoveries are lower simply because the Mega  Pharma settlements are dwindling and it’s not easy to replace billion dollar settlements, or perhaps it is just a temporary “blip” on the radar; but would either necessarily mean enforcement efforts are lagging?   Similarly, do the decreases in the new cases reflect a meaningful change in approach, or can they be explained by a redeployment of enforcement resources or a shifting focus to certain high impact, but low “number” areas?  These are just some of the questions HCFAC 2014 raises; questions that won’t be answered in the immediate future.

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