OIG Says Anti-Fraud Efforts Saved the Government $17 Billion

WASHINGTON–The Department of Health and Human Services Office
of Inspector General estimates that it saved the government nearly
$17 billion with its anti-fraud activities during the first half of
FY 2005.

According to the OIG’s Semiannual Report to Congress,
from Oct. 1, 2004, through March 31, the savings and expected
recoveries include $15.6 billion in implemented recommendations and
other actions to put funds to better use, $266 million in audit
receivables and $1.1 billion in investigative receivables.

During this period, 1,695 individuals and entities were excluded
from participating in Medicare, Medicaid and other federally
sponsored health programs. Additionally, 258 criminal actions and
105 civil actions were taken.

The June 13 report cited a number of DME-related examples in the
government’s efforts to combat fraud and abuse, including:

• Gambro Healthcare, a dialysis services giant, agreed to pay
  more than $350 million in fines and penalties–one of the largest
  settlements ever reached by the Department of Justice in the health
  care industry–after civil and criminal allegations of health care
  fraud in the Medicare, Medicaid and Tricare programs. The DOJ had
  accused the company of, among other things, setting up a sham DME
  company to provide equipment and supplies to home dialysis patients
  in violation of Medicare regulations and submitting bills for
  services and medications that were not medically necessary.
• Polymedica Corp. and its wholly owned subsidiaries, Liberty
  Medical Supply and Liberty Home Pharmacy Corp., agreed to pay $35
  million and enter a five-year corporate integrity agreement for
  allegedly submitting claims for diabetes and nebulizer-related
  products without proper documentation.
• In Florida, an unnamed DME sales representative was excluded
  from the Medicare program for 28 years for a criminal conviction of
  filing false claims for medically unnecessary equipment over three
  years. The representative also was sentenced to 18 months in jail
  and ordered to pay more than $2 million in restitution for his role
  in the scheme.
• Novartis Nutrition Corp. and OPI Properties, subsidiaries of
  Novartis Finance Corp., agreed to pay $44.7 million in civil
  damages following a kickback investigation that found the companies
  offered free enteral feeding pumps to encourage customers to
  purchase additional enteral nutrition products and submit false
  claims to Medicare. Additionally, NNC agreed to pay $160,000 for
  alleged conduct relating to obstructing a federal audit, and OPI
  agreed to pay a $4.5 million criminal fine and be permanently
  excluded from all federal health care programs.
• An unnamed DME company owner in Texas was sentenced to 46
  months of incarceration and ordered to pay $1.8 million in
  restitution for a power wheelchair scheme that included billing
  Medicare for more expensive equipment than she provided.
• In Kentucky, an unnamed DME owner agreed to pay $708,000 in a
  civil suit and was ordered to pay a $1,000 special assessment for
  paying a doctor and his associate kickbacks in exchange for
  qualifying patients for oxygen and referring them to his company.

  The OIG also noted that its recommendations to reduce Medicare
  payments for oxygen–as outlined in the Balanced Budget Act of
  1997–saved the government $900 million, and its recommendation to
  reduce what it called “inherently unreasonable” payments for
  enteral and parenteral nutrition, equipment and supplies, saved
  $500 million.

  Other suggestions by the OIG still in the works include
  educating beneficiaries on ways to reduce financial liability for
  DME and tightening required documentation for blood glucose test
  strips.

  The report is posted on the OIG Web site, available by
  clicking here.