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CCH® BENEFITS — 02/12/10

Health Care Fraud Costs U.S. More Than $60 Billion Annually: DOJ

from Spencer’s Benefits Reports: Health care fraud remains a significant problem, estimated to cost the public and private sectors more than $60 billion each year, U.S. Attorney General Eric Holder said at the first National Summit on Health Care Fraud on January 28. The event convened by the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) was held at the National Institutes on Heath with participants from health insurers, law enforcement agencies, and medical providers.

“The scope of the problem is simply shocking,” Mr. Holder said. The more than $60 billion estimated to be lost to health care fraud each year “is a staggering amount of money. It’s half the entire economy of [HHS] Secretary [Kathleen] Sebelius’ home state of Kansas. It’s more than the net worth of America’s eight largest private foundations. And it’s 33 times the amount of money that Avatar–now the highest-earning movie of all time–has made at the box office. Losses on this scale affect all of us. Fraud isn’t just a drain on the Medicare or Medicaid program; it drives up the price that all Americans must pay for health care.”

In May 2009, the DOJ and the HHS joined forces and established the Health Care Fraud Prevention & Enforcement Action Team (HEAT). In 2009, the DOJ reached an all-time high in the number of health care fraud defendants charged, more than 800. It also obtained more than 580 convictions and, under the False Claims Act, recovered more than $2.2 billion, an impressive amount but still a small fraction of the estimated amounts lost.

Since HEAT was launched, the Medicare Fraud Strike Forces, a component of HEAT, in the last eight months filed more than 60 cases, charged 200 offenders, secured more than 50 guilty pleas, and uncovered more than$250 million in fraudulent billings, Mr. Holder revealed.

Furthermore, for fiscal year 2011, beginning on October 1, the Obama Administration’s “fraud-fighting budget will increase from nearly $200 million to more than $300 million,” Mr. Holder continued. “This may seem like a lot of money—and it is. But I assure you that it’s a sound and prudent investment. For every dollar we spend combating health care fraud, we’re able to return four dollars to the U.S. Treasury and the American taxpayers.

“Our agencies will continue to work with Congress to identify and pursue the legislative and regulatory reforms necessary to prevent, deter, and prosecute health care fraud,” Mr. Holder concluded. “These reforms range from removing barriers that impede information-sharing to increasing sanctions and penalties.”

For more information, visit http://www.healthcarefraudsummit.com/.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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