Feds Recover $2.9 Billion from Health Care Fraud; Cracking Down on Pain Drugs
Medicare drug plans to withhold payment when they see suspicious activity related to OxyContin, Percocet, other narcotics,
Dec. 14, 2011 - The Department of Justice recovered over $5.6 billion in total fraud in 2011, up 167 percent since 2008,
and more than half of this - $2.9 billion – was health care fraud, according to an announcement yesterday by Vice President Joe Biden to a
Cabinet meeting focused on the Administration’s effort to cut waste and eliminate misspent dollars.
Deputy Attorney General James Cole added that the Department of Health and Human Services (HHS) will further prevent
Medicare fraud by telling prescription drug plans to withhold payment when they see signs of suspicious activity related to OxyContin,
Percocet, and other narcotics and painkillers.
Biden said the record setting fraud recovery was driven in part by unprecedented cooperation between the Department of
Justice and the Department of Health and Human Services to detect and halt fraud earlier.
Medicare Fraud Strike Force
Specifically, the Obama Administration reports it has greatly expanded the use of Medicare Fraud Strike Forces,
specialized teams of agents and prosecutors who focus on catching health care fraud.
The teams monitor Medicare data in real time and works
together to prosecute fraud much more quickly than before. It now often takes months, not years, to bring a case to resolution.
At the start of the administration, there were two Strike Force teams. Now, there are Strike Force teams in nine
different cities. And they have been effective: in 2008, they brought cases involving $384 million in fraudulent claims.
This year, they
brought cases involving over $1 billion in fraudulent claims. For every dollar spent on this effort, the administration has recovered seven
The Department of Justice has also recovered $15 billion in total fraud since 2009. Some of this money has gone back to
states, whistleblowers, or into strengthening important programs like Medicare and Medicaid. Other funds have been returned to the Treasury
for deficit reduction. Of the $15 billion recovered since 2009, $8.4 billion was in health care fraud alone.
The Department of Justice also announced they doubled fraud recoveries between 2008 and 2011 in 21 states, the District
of Columbia, and the Virgin Islands. This includes Alaska, Arkansas, Colorado, Florida, Georgia, Kansas, Massachusetts, Maryland, Michigan,
Minnesota, Mississippi, Nevada, Ohio, Oklahoma, South Dakota, Tennessee, Virginia, Vermont, Washington, West Virginia, and Wisconsin, as well
as the District of Columbia and the Virgin Islands.
In fact, 15 of these states quadrupled recoveries and 19 of these tripled recoveries. Click
HERE to see the state by state numbers.
This increase in recovering fraud comes as the administration is decreasing the amount of fraud that occurs in the first
place. Government-wide improper payment rates – which include fraudulent payments and other types of errors – were cut by 11 percent this
year, keeping $18 billion in taxpayer funds from going to the wrong people or for the wrong purposes.
“All across the country, the Department of Justice continues to move aggressively to protect the American people from
fraud. In this past fiscal year, we recovered more money from fraudsters than ever before, over $5.6 billion,” said Deputy Attorney General
“These efforts not only send the message that those who commit fraud will be held accountable, they also result in more
dollars in the national treasury and demonstrate a high rate of return on the American taxpayers’ investment in the Justice Department.”
Steps to Prevent Fraud with OxyContin, Percocet, Other Prescription Drugs
As a next step in an aggressive campaign to crack down on Medicare fraud, HHS will direct all Medicare prescription drug
plans to use every tool at their disposal to prevent fraud. Patients sometimes “doctor shop,” visiting numerous doctors to get multiple
prescriptions for OxyContin, Percocet, and other painkillers and narcotics. In some cases, these medicines are abused by the patients, in
others, patients sell the extra drugs.
OxyContin and Percocet abuse, prescription drug fraud, and so-called “doctor shopping” are major problems. The Government
Accountability Office recently reported that “170,000 Medicare beneficiaries received prescriptions from five or more” doctors for drugs that
are frequently abused, like OxyContin and Percocet.
While not all of these cases are fraudulent, some are. In 2008, for example, one Medicare beneficiary “received
prescriptions for a total of 3,655 oxycodone pills [such as OxyContin]…from 58 different prescribers.”
HHS announced yesterday they have urged insurance companies to take every step possible to prevent such fraud.
Specifically, HHS’ guidance tells prescription drug plans to withhold payment on suspicious claims, including when enrollees use multiple
doctors to obtain painkillers and narcotics.
Companies that offer prescription drug plans already process each of a patient’s prescriptions. While HHS generally
requires prompt payment, today’s guidance clarifies that if a plan sees signs of suspicious activity, it should withhold payment to pharmacies
until it verifies the claim is valid.
This guidance to prescription drug plans also explains how plans can use tools like prior authorization, retrospective
medical review, and prescribing for less than 30 days (with the cooperation of prescribing practitioners) to root out fraud and ensure
appropriate coverage in Medicare.
“Prescription drug misuse has a serious human and financial cost,” said Health and Human Services Secretary Kathleen
“The Obama Administration is making unprecedented strides in cracking down on fraud that contributes to this problem
while costing taxpayers dollars. With these actions, we are going to continue to stop fraud before it happens and make sure that those who do
defraud taxpayers are held accountable.”
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