The Government Accountability Office (GAO) issued an interesting report in September that analyzed civil and criminal healthcare fraud cases.  The report is based on 2010 data from the various agencies in the federal government charged with investigating and pursuing healthcare fraud.  For purposes of this blog entry, I’m going to focus on some key numbers on the civil side. 

In 2010, the government investigated a total of 10,187 “subjects.”  Subjects included entities such as hospitals, medical clinics, and pharmacies, as well as individuals that provide services at these entities.

  • Of the 10,187 subjects investigated, 2,339 of the subjects were related to civil investigations, rather than criminal investigations.
  • Of the 2,339 civil investigations, nearly 20% of these were hospitals.  Medical centers or clinics made up another almost 18% of the total 2,339 civil investigations.
  • Of the total 2,339 civil investigations, the government actually pursued cases against 1,087.
  • Of the 1,087 civil cases the government pursued, the government either settled with, or won a judgment against, 55% of these subjects.
  • Of the 55% civil cases that either settled or resulted in a judgment for the government, 44% of these subjects were hospitals or medical facilities (medical practices or clinics).

These numbers are interesting because it shows that hospital or medical facilities make up over one third of all civil investigations and almost half of all settlements.  It is also interesting to look at the number of investigations that were based on qui tam filings.  A qui tam is a civil False Claims Act case brought by a private citizen, “relator” or “whistleblower,” on behalf of the government.  Once a case is filed, the Department of Justice and the Office of Inspector General are charged with investigating and making a determination about whether the government should pursue the case by becoming a party to the litigation.  In many cases, if the government believes the allegations have merit, the government will attempt to settle before actually litigating.

  • Of the total 2,339 civil investigations, 88% were investigated after a qui tam case was filed, and 602 of these resulted in a settlement or judgment for the government.
  • Lastly, of the 602 cases, 27% were hospitals and 17% were medical facilities.

These numbers show that a high percentage of investigations are based on qui tam cases, and that this is a serious risk to hospitals and medical facilities.  This should not be surprising given the incentive a whistleblower has in bringing a successful qui tam case: 15-30% of the total recovery.

Our Insight. Your Advantage.  When interpreting these numbers, keep in mind that the government recovered approximately $4 billion in FY 2010 through civil and criminal healthcare fraud enforcement. Of the $4 billion recovered, approximately 60% was through civil enforcement.  This is striking when considering that the total civil investigations, per the GAO report, only made up approximately 30% of all fraud investigations.  Thus, the government is getting quite the bang for its buck in the civil fraud enforcement arena.  Moreover, based on the data, the government is getting most of its return on the civil enforcement side through cases against hospitals and other medical facilities.  The evidence of this trend is seen in my earlier postings about the federal government/private partnership and a DOJ/HHS warning letter to hospital industry groups.  Moreover, the newly released 2013 OIG Work Plan includes 11 new reviews of hospital and medical facility issues.  Thus, it is abundantly clear that the enforcement efforts against hospitals and medical facilities will continue to rise.  Act now to address your risk and you may be able to prevent your facility from becoming one of the above statistics.