Feb. 26—Hospitals and health systems paid $163.4 million to settle healthcare fraud allegations in FY13, the Office of Inspector General (OIG) reported this week.

The settlements by 71 hospitals and health systems represented a relatively small share of the $4.3 billion recovered under federal healthcare anti-fraud efforts. 

Federal Actions Itemized

There are no reliable estimates of the amount of fraud in Medicare, according to OIG.  Yet federal officials touted their FY13 results, which included winning or negotiating more than $2.6 billion in healthcare fraud judgments and settlements. Total recoveries included $2.85 billion in Medicare funds and more than $576 million in federal Medicaid money.

Federal officials obtained convictions of 718 defendants for healthcare fraud-related crimes during FY13. The Justice Department opened 1,083 new civil healthcare fraud investigations and had 1,079 civil healthcare fraud matters pending at the end of the fiscal year.

OIG also excluded from Medicare 3,214 individuals and entities, such as providers criminally convicted for Medicare- or Medicaid-related crimes.

Hospital Actions Detailed

The health system and hospital cases settled in FY 13 included cases against Shands Healthcare in Florida and Intermountain Health Care Inc.

Shands provided the largest settlement of the fiscal year when it paid $26 million to the state of Florida and the federal government. That payment settled allegations that six of its healthcare facilities submitted false claims to Medicare, Medicaid, and other federal healthcare programs for inpatient procedures that should have been billed as outpatient services.

The fraud collections did not include funds recovered by contract auditors, such as recovery audit contractors (RACs). In FY10 and FY11, RACs identified half of all claims they reviewed as having resulted in improper payments, totaling $1.3 billion. 

The federal watchdog agency urged CMS to provide better guidance to hospitals explaining that Medicare requires a clinical condition requiring inpatient care to exist for hospitals to bill for Part A prospective payments for elective surgeries that were canceled. The request for more guidance followed OIG’s examination of a claims sample that led it to conclude that Medicare paid $38.2 million in Part A inpatient hospital payments in 2009 and 2010 for short-stay, canceled, elective surgery admissions that were not reasonable and necessary.

The OIG also urged CMS to require supporting documentation from selected hospitals to verify the self-reported information used to qualify for Medicare electronic health record incentive payments. The agency found CMS does not verify the accuracy of hospitals’ self-reported information prior to payment “because data necessary for verifications are not readily available.” The incentive program paid $19.2 billion by the end of 2013 to a variety of providers, including 88 percent of eligible hospitals, CMS announced earlier this month.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter @rdalyhealthcare.


Publication Date: Wednesday, February 26, 2014