6 major healthcare fraud cases costing millions in 2016 + 9 key statistics

This year alone the healthcare industry has seen major healthcare fraud lawsuits, with hospitals and payers alike paying millions of dollars.

6 major 2016 healthcare fraud cases this year
1. In May 2016, various Indiana surgery centers filed nearly two dozen lawsuits against UnitedHealthcare, a subsidiary of UnitedHealth, for allegedly failing to pay for services the center's physicians rendered to patients, thereby violating state and federal law. In the suit, the surgery centers claim UnitedHealthcare deducted what the payer considered past overpayments from current patients' bills. UnitedHealthcare maintains it complied with all the appropriate state and ERISA laws and regulations, and utilized "cooperative overpayment recoveries."  

2. More than six years ago, Hooper, Lundy and Bookman filed a class action against UnitedHealth on behalf of California ASCs. The class action claimed UnitedHealth and several of its corporate subsidiaries, including Optum, failed to properly calculate the reasonable and customary amounts for out-of-network ASCs. In September 2015, UnitedHealth agreed to the $9.5 million settlement fund, and in May, the U.S. District Court for the Central District of California granted final approval for the $9.5 million settlement with UnitedHealth Services.

3. In April, a California jury ruled in favor of Aetna in a medical billing fraud case involving Northern California ambulatory surgery centers. The jury found Bay Area Surgical Management and its three co-founders overbilled Aetna for out-of-network procedures by giving referring physicians a substantial kickback. The jury awarded the payer $37.4 million in damages. Aetna claimed Bay Area Surgical Management cost the insurer $23 million for around 1,900 procedures in the past two years — $20 million more than it should have been charged.

4. Dallas-based Forest Park Medical Center co-founder Richard F. Toussaint Jr., MD, was found guilty of committing a $10 million healthcare fraud scheme. The anesthesiologist began submitting falsified claims to Blue Cross Blue Shield of Texas, United Healthcare, the Federal Employees Health Benefits Program and others, in 2009 through 2010. Dr. Toussaint submitted claims for procedures that took place while he was out of the state or at other hospitals. He also filed a claim for a procedure that he was undergoing. Dr. Toussaint was found guilty on seven counts of fraud.

5. Boston Medical Center agreed to pay the federal government $1.1 million for Medicare and Medicaid fraud allegations. Prosecutors charged the hospital and two of its physician groups for billing Medicare for more units of the cancer drug Rituxan than it actually used as well as for billing Medicare and Medicaid for services at a presurgical center which other fees covered. The hospital and physician group also faced charges for submitting claims to Medicare for outpatient podiatry services deemed unnecessary.

6. In May 2016, Florida family practitioner Ona M. Colasante, MD, was charged with committing 210 counts of healthcare fraud and money laundering. The physician allegedly submitted fraudulent claims for unnecessary tests, bought drugs from outside the United States that are not approved for use and administered those drugs to patients without their knowledge or consent. The physician faces up to 10 years in prison for each of the healthcare fraud counts, up to three years for each of the FDA counts and up to 10 years for each of the money laundering counts.

Key statistics
7. In 2015, the Medicaid Fraud Control Units recovered almost $745 million. Each year, the federal government spends more than $845 billion on Medicare and Medicaid.

8. Improper payments cost CMS nearly $40 billion annually. Louisiana has the highest overbilling rate of 19.4 percent, followed by Texas at 17.3 percent.

9. In 2015, the Department of Justice received more than $1.9 billion in settlements and judgments from civil healthcare fraud cases. Since 2009, DOJ has recovered more than $17.1 billion, according to CMS.

10. A Government Accountability Office report found fraudulent billing makes up nearly 68 percent of all resolved healthcare fraud cases. The GAO found other common schemes comprised healthcare fraud including falsifying records (25 percent), kickbacks (21 percent) and fraudulently obtaining controlled substances or misbranding prescription drugs (21 percent).

11. In the GAO report, healthcare providers were complicit in 62 percent of the cases, and beneficiaries were complicit in 14 percent of the cases.

12. Fraudulent billing accounts for nearly 42 percent of convictions and judgments, and is deemed the most prevalent form of healthcare fraud.

13. In 2015, Medicare had a 40 percent improper payment rate for durable medical equipment, prosthetics, orthotics and supplies, resulting in $3.2 billion losses.

14. Insufficient documentation is the most common DMEPOS billing error and accounted for $2.6 billion in Medicare losses.

15. A Council for Medicare Integrity report found podiatrists were the most responsible for improper billing and overbilled nearly 67 percent of the time.

More articles on coding & billing:
The complex nature of healthcare fraud — 5 highlights
Medicare loses $3.2B from DMEPOS improper medical billing — 8 key points
Donald Trump, GOP agree ACA issue to emerge before 2016 presidential elections — 5 takeaways


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