The HHS-OIG report reveals its efforts to recover billions of dollars from healthcare fraud and abuse cases, as well as to identify deficiencies in nursing home compliance
The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) reports it could recoup billions of dollars in “misspent Medicare, Medicaid, and other health and human services funds,” according to its latest report, which was released in early June.
The Spring 2024 Semiannual Report to Congress highlights more than $2.76 billion in expected recoveries resulting from agency audits and investigations conducted during the reporting period of October 1, 2023, through March 31, 2024.
During this period, the OIG reported:
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- 712 criminal and civil actions;
- 1,795 exclusions from federally funded programs;
- 195 recommendations issued to reduce fraud, waste, and abuse; and
- 1,201 referrals to federal and state prosecutorial partners.
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“To hold wrongdoers accountable, OIG doggedly pursues criminals whose schemes put federal funds at risk and endanger the public,” said Christi A. Grimm, HHS Inspector General, in the report. “These enforcement cases often involved egregious fraud, including false billing, costly kickback schemes, and failures to provide care.” Further, OIG enforcement efforts “consistently yields a positive return on investment of around $10 returned to every $1 invested,” according to the report.
OIG enforcement highlights
As part of its report, the OIG highlighted a number of healthcare fraud and abuse enforcement actions against the most egregious fraudsters and regulatory compliance failures. The actions include drug diversion, COVID-19 fraud, Stark Law violations against self-referrals, state long-term care survey deficiencies, and Medicare patient abuse and neglect.
Some of the cases highlighted included:
Mark Murphy, a pain management physician, and his wife, Jennifer Murphy, “conspired to unlawfully dispense and distribute controlled substances, including Fentanyl and Oxycodone, through prescriptions that were not issued for legitimate medical purposes,” the report stated. In addition, the Alabama couple submitted fraudulent claims to federal healthcare programs and private insurers. They were found guilty of conspiracy to distribute controlled substances and healthcare fraud. The trial court sentenced them to 20 years in prison and ordered them to pay approximately $52 million in restitution. The OIG also excluded them from participating in federally funded programs for 70 years.
Mark Schena, president of Arrayit Corp., a medical technology company, was sentenced to eight years in prison and ordered to pay $24 million in restitution in the first criminal securities fraud case related to the COVID-19 pandemic and the first criminal COVID-19 healthcare fraud case brought to trial. Arrayit defrauded investors by claiming his “revolutionary technology” could “test for virtually any disease using a single drop of blood.” In meetings with investors, he and his publicist claimed he was the “father of microarray technology” and was on the “shortlist for the Nobel Prize.” Arrayit also “ran tests on every patient for 120 different allergens” regardless of medical necessity.
He also falsely said the company had a COVID-19 test and claimed that the government required individuals being tested for COVID-19 also be tested for allergies. He also “orchestrated a deceptive marketing plan that falsely claimed the company’s test was highly accurate” as well as paying kickbacks to marketers.” Schena concealed from investors that the U.S. Food and Drug Administration (FDA) found Arrayit’s COVID-19 test was not accurate enough to receive an emergency-use authorization.
Community Health Network, Inc., a healthcare network headquartered in Indianapolis, agreed to pay $345 million to resolve allegations that it violated the U.S. False Claims Act by “knowingly submitting claims to Medicare for services that were referred in violation of the Stark Law.” Beginning in 2008 and 2009, senior management at the healthcare network engaged in an “illegal scheme to recruit physicians for employment” in order to capture their “lucrative downstream referrals.”
Community Health recruited hundreds of local specialists by paying salaries that were as much as double what they were making in their own private practices. In order to hide its scheme, the network knowingly provided false compensation figures to a valuation firm so that it rendered a favorable opinion on the compensation it planned to pay the recruited specialists. In addition to the excessively high compensation, the network also paid bonuses to the physicians when they reached a set target number of referrals to the network.
Nursing homes and Medicare fraud
Further, the OIG found 1,973 deficiencies among 98 nursing homes in its audit of five states’ oversight of nursing home compliance with federal requirements for life safety, emergency preparedness, and infection control. The OIG found that Colorado, Ohio, and Oklahoma did not adequately ensure that nursing homes within the state were complying with federal requirements. (States are required to survey long-term care facilities for compliance issues.)
The OIG also found that the state of Washington did not ensure compliance with federal requirements and identified deficiencies in all 20 nursing homes it audited in the state, including “91 deficiencies related to life safety, 155 deficiencies related to emergency preparedness, and 279 deficiencies related to infection control,” the report noted.
The OIG also completed work during this reporting period that found 30,258 Medicare claims for services provided in 2019 and 2020 contained diagnosis codes that “indicated the treatment of injuries potentially caused by abuse or neglect of Medicare enrollees.” The OIG estimated that 91% of Medicare claims with injury diagnoses “contained evidence of potential abuse or neglect.” The agency also found that 24% of incidents were not reported to law enforcement, 12% of incidents occurred in medical facilities, and 8% were “allegedly perpetrated by health care workers.”
The OIG oversees more than $2 trillion in HHS spending, almost 24% of the federal budget. Its enforcement and recovery efforts are considered necessary to safeguard taxpayer dollars.
