Settlement amounts up in health care fraud cases

Doctors are rarely the subject of False Claims Act inquiries.

By David Glendinning, AMNews staff. May 9, 2005.

Washington -- Investigations into health care fraud continue to recover substantial amounts of money for the federal government, which is on track to collect significantly more money this year than it did last year.

In the first six months of fiscal 2005 alone, settlements and judgments under the False Claims Act totaled nearly $900 million, according to the Dept. of Justice and the watchdog group Taxpayers Against Fraud. That figure is almost as much as enforcement of the act produced in all of fiscal 2004.

Although the act allows federal officials to prosecute any kind of fraudulent government billing, health care fraud remains the largest single chunk. Out of the 43 cases that resulted in a settlement or judgment since the fiscal year began last October, 30 involved Medicare or Medicaid billing.

In these cases, the federal investment is paying off in spades, according to health care economist Jack Meyer, who recently conducted a study of recoveries under the act for Taxpayers Against Fraud. Using data from fiscal years 1999 through 2003, Meyer estimated that every dollar the government spends pursuing civil health care fraud results in $13 in net recoveries, up from $8 two years ago.

"Civil health care fraud is surely one area of the federal budget where the government is running a substantial surplus," said Meyer, president of the Economic and Social Research Institute, a nonpartisan research organization in Washington, D.C.