OIG Semiannual Report to Congress Includes Largest Health Care Fraud Case in History

Posted by Frank Strafford on December 10, 2017 in Exclusions, Industry News, Uncategorized,

The HHS Office of the Inspector General (OIG) had a busy and fruitful six months from April to September of 2017, according to the Fall 2017 OIG semiannual report to Congress. The Health and Human Services (HHS) watchdog improved its own efficiency by using more sophisticated data analytics to protect program integrity for Medicaid and Medicare.

During FY 2017, OIG’s expected recoveries were about $4.13 billion for all HHS programs, with over $1.62 billion recouped in latter half of the year (April to September 2017). During the year, 881 individuals or entities faced criminal charges, 826 faced civil actions and 3,244 were subject to exclusion. This reflects the intense focus OIG has placed on detecting and prosecuting fraud this year. From April to September of 2017 alone, there were 373 criminal and 360 civil actions against individuals or entities for fraud related to health care.

Largest Fraud Case in History

Improved data collection and analytics are helping OIG detect patterns that show systematic, multistate fraud schemes. This capacity was a pivotal factor in what the OIG has called “the largest national health care fraud takedown in history.” Together with state and federal law enforcement partners, OIG orchestrated a massive investigation that resulted in criminal charges against over 400 defendants, including 115 licensed medical professionals, in July 2017. The case, which involved over $1.3 billion in fraudulent Medicare and Medicaid billing, spanned 41 out of 94 federal districts. Improved data analytics allowed investigators to connect dots to form a pattern that would have been difficult to see in the past.

Part of this case involved charges related to questionable opioid prescription patterns. The report reflects OIG’s commitment to doing its part to curb the opioid addiction epidemic.

Major Program Exclusions

During this reporting period, over 1,800 individuals and entities were excluded from participating in federal health care programs.

Many exclusions are the result of prescription drug fraud or illegal kickbacks. In one case, the defendants bought prescription drugs for and resold them, receiving reimbursement from Medicaid and Medicare. The four defendants are subject to a combined 102-year exclusion from participating in federal health care programs. In Michigan, a case involving the fraudulent prescription of controlled substances resulted in prison time for the 27 defendants, and a combined total of 371 years of exclusion. In New York, an entity that provides outpatient drug rehabilitation was excluded for 50 years after it agreed to settle on charges for illegal kickbacks.

Some exclusions are the result of patient abuse or neglect. In one example, a nursing assistant was sentenced to eight years in prison and excluded from participation for 20 years when he was convicted of sexual assault against a patient in a Minnesota nursing facility.

OIG also uses suspensions and debarments to prevent the federal government from working with people who have engaged in contract fraud or other breach. In one case during the reporting period, the CEO of an Alabama health center was convicted of embezzlement and consequently debarred.

Civil Monetary Penalties and Affirmative Exclusions

Exclusions can also be the result of wrongdoing by individuals and entities that result in a settlement. Entities and individuals are subject to penalties if they hired someone who they knew – or should have known –was excluded from participating in federal health care programs.

Entities of all kinds make the mistake of hiring excluded individuals – not only medical providers, but clerical and administrative staff as well. Just in the time period covered by this report, the following organizations paid settlements for hiring someone on the exclusion list:

  • In November, an ear, nose, throat practice was required to pay over $51,000 for hiring a medical records clerk who was excluded
  • In October, a mental health provider paid nearly $100,000 for employing a program director who was excluded
  • In October, a medical staffing company paid over $93,000 for employing a per diem worker who was excluded
  • In August, a dermatology practice paid over $125,000 for employing an excluded individual
  • In August, a pharmacy paid nearly $340,000 for employing an excluded pharmacist

Cases like these show how important it is for organizations to have a rigorous process for vetting employees at every level to make sure they are not excluded from participating in federal health care programs.

During the reporting period, OIG wrapped up cases that resulted in $22.8 million in assessments and penalties.

Building State Capacity for Medicaid Fraud Control

OIG has an interest in supporting state Medicaid Fraud Control Units (MFCUs) because they are essential partners in controlling fraud, waste and abuse. The multistate fraud takedown in July 2017 was done with the assistance of 31 MFCUs. To improve the ability of MFCUs to partner with OIG on such efforts, OIG started onsite reviews of MFCU programs and offered training for MFCU managers and staff.

OIG continues to refine its ability to prevent, detect and control Medicare and Medicaid fraud, waste and abuse in the context of increased political scrutiny of these programs. Health care entities must be vigilant and proactive to ensure that service delivery, hiring and billing practices follow all laws and regulations.

About Frank Strafford

About Frank Strafford

Related Articles

VIDEO PODCAST: Building Your Personal Brand ...

August 9, 2023

Uncover the Hidden Gems of Healthcare Compliance Networking! In our latest podcast episode, we unlock the vault to success for healthcare compliance professionals. Mary Shirley, a renowned fig...

Texas OIG Quarterly Report Highlights: Texas ...

July 12, 2021

The COVID-19 pandemic drove significant changes and expansion in care delivery practices. The federal government and the State of Texas implemented policy and treatment flexibility to ensure continued...


June 1, 2021

AN OVERVIEW of THE OIG’S LIST OF EXCLUDED INDIVIDUALS AND ENTITIES Since 1977, the federal government has maintained a list of individuals and entities that are excluded from participation in any...

Understanding OIG Exclusions

OIG Exclusions Screening Process

Exclusion FAQS

Quick OIG Exclusion Basics

Employing Excluded Individuals

Consequences to Employing an Excluded Individual

OIG Compliance Law

Laws and Publications on OIG Compliance

More Compliance Resources

Our Culture

We build the best, so you can perform at your best.

Trusted for Good Reason

  • ✓ Guaranteed accurate
  • ✓ Certified Secure
  • ✓ Audit Proof
  • ✓ Feature-rich reporting
  • ✓ Round the clock real-time-data
  • ✓ Processing fully automated

Security First

  • ✓ Cloud hosted
  • ✓ Encrypted data
  • ✓ Real-time backups

Trusted for Accuracy

  • ✓ Physical security
  • ✓ Restricted access
  • ✓ Single sign-on
  • ✓ Password security
  • ✓ Certified secure
  • ✓ Cross checking




Average workload reduction by implementing the Streamline Verify program



Establishments trust Streamline Verify nationwide



Serving the healthcare industry’s unique compliance needs since 2011



Setting standards with hourly synchronization to primary source data