By James Swann
Oct. 22 --The federal government gets $20 back for every dollar invested in False Claims Act health-care fraud cases, a higher rate than indicated by the Department of Justice's reporting on FCA settlements, according to a report from the Taxpayers Against Fraud (TAF) Education Fund released Oct. 22.
The report, “Fighting Medicare & Medicaid Fraud: The Return on Investment from False Claims Act Partnerships,” said that the DOJ's reporting doesn't include criminal fines associated with FCA cases or state recoveries associated with federal FCA cases, which together accounted for $9 billion in recoveries from fiscal year 2008 through FY 2012.
As a result, the DOJ's return on investment of 16-to-1 for FCA health-care fraud cases “is an understatement of the full 'rate of return' from the federal government's anti-fraud activities,” the report said.
Overall civil, criminal and state recoveries associated with federal FCA health-care fraud cases totaled $18 billion between FY 2008 and FY 2012, the report said.
During the same time frame, the three agencies that investigate and prosecute health-care fraud FCA cases (the U.S. Attorney's Offices, the Department of Health and Human Services Office of Inspector General and the DOJ's Civil Division) received a total of $575 million from the Medicare trust fund for health-care fraud enforcement, the report said.
“While it is difficult to quantify federal and state costs associated with recovering these federal criminal and state civil dollars, we are confident that if all costs and benefits are accounted for, the benefit to cost ratio of False Claims Act law enforcement now exceeds 20:1,” the report said.
FCA cases involving health-care fraud whistle-blowers have increased dramatically since 1986, when penalties under the FCA were strengthened, the report said.
For example, from 1986 to 1992, there were 62 new health-care fraud whistle-blower referrals, investigations or actions. In comparison, there were 417 in 2011 and 412 in 2012.
In 2012, whistle-blowers received $284 million out of $2.5 billion in health-care fraud whistle-blower settlements.
The TAF report also said that criminal FCA cases are becoming increasingly important to the federal government.
“Not only do they bring in additional recoveries, but also they create the possibility of criminal conviction, which serves as a deterrent to committing fraud against the government,” the report said.
Criminal FCA cases also often are linked with civil FCA cases, the report said, as a civil investigation can lead to criminal charges.
Sen. Charles E. Grassley (R-Iowa), who wrote the 1986 amendments to the FCA, said the TAF report indicates the value of the FCA.
“The law has empowered whistleblowers to come forward, risk their careers and root out the shady characters looking to give the taxpayer a bad deal,” Grassley said in a statement released Oct. 22.
Although the focus in 1986 was on defense contractors, the FCA is “the most effective tool against health care fraud, as evidenced by the report released today,” he said.
Grassley said any attempts to weaken the FCA “should be met with skepticism by the courts and Congress.”