The fight against health care fraud in the United States is a complex and ongoing battle, with billions of dollars recovered and prevented each year. At the heart of this effort is the Health Care Fraud and Abuse Control (HCFAC) Program, a critical initiative designed to protect both consumers and taxpayers from the detrimental effects of fraud, waste, and abuse within the health care system. Understanding the origins of this program is key to appreciating its significance and the profound impact it has had on safeguarding the integrity of American healthcare. So, Who Created The Health Care Fraud And Abuse Control Program, and why is it so vital?
The HCFAC Program was established through the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This landmark legislation, primarily known for its provisions on patient data privacy and security, also included crucial measures to combat health care fraud and abuse. Recognizing the growing financial strain and ethical concerns posed by fraudulent activities, Congress included Section 201 of HIPAA, mandating the creation of the HCFAC Program. This program was designed to coordinate federal, state, and local law enforcement agencies in their efforts to detect, investigate, and prosecute health care fraud offenses.
The Genesis of HCFAC: HIPAA and the Need for Reform
The 1990s witnessed a significant rise in health care expenditures, accompanied by increasing concerns about fraud and abuse within the system. Prior to HIPAA and the HCFAC Program, efforts to combat health care fraud were often fragmented and lacked the coordinated approach necessary to effectively tackle sophisticated fraud schemes. HIPAA, signed into law by President Bill Clinton, aimed to modernize the healthcare system, and a critical component of this modernization was addressing financial vulnerabilities and ensuring accountability.
By creating the HCFAC Program, HIPAA provided a dedicated funding mechanism and a framework for collaboration among key government agencies. This marked a significant shift towards a proactive and preventative approach to combating health care fraud, moving beyond a reactive “pay and chase” model to one focused on prevention and early detection.
Key Agencies at the Forefront of HCFAC
Since its inception in 1997, the HCFAC Program has been spearheaded by a collaborative effort involving several crucial government bodies. These agencies work in tandem to leverage their unique expertise and resources to maximize the program’s effectiveness. The primary agencies involved include:
- The Department of Health & Human Services Office of Inspector General (HHS-OIG): HHS-OIG is the leading agency in the fight against fraud and abuse in HHS programs, including Medicare and Medicaid. They conduct audits, evaluations, and investigations to identify and address fraud, waste, and abuse. HCFAC funding supports HHS-OIG’s enhanced data analysis capabilities, allowing for proactive detection of fraudulent schemes.
- The Centers for Medicare & Medicaid Services (CMS): CMS plays a vital role in administering Medicare and Medicaid, the two largest government-funded health care programs. CMS is responsible for implementing fraud prevention strategies within these programs, including advanced fraud detection technologies like the Fraud Prevention System (FPS).
- The Department of Justice (DOJ): The DOJ is the primary law enforcement agency responsible for prosecuting health care fraud cases. Through the HCFAC Program, the DOJ works closely with HHS-OIG and other agencies to bring criminal and civil actions against individuals and entities engaged in fraudulent activities.
The Impact and Success of the HCFAC Program
The HCFAC Program has demonstrably strengthened the government’s ability to combat health care fraud. Its success is evident in the billions of dollars recovered and returned to the Medicare Trust Funds, as well as the significant return on investment it provides to taxpayers.
In Fiscal Year 2016 alone, the government recovered over $3.3 billion due to health care fraud judgments, settlements, and administrative impositions. Since its inception, the HCFAC Program has returned over $31 billion to the Medicare Trust Funds. Furthermore, in FY 2016, for every dollar invested in the HCFAC program, $5.00 was returned, highlighting the program’s remarkable efficiency and financial benefits.
Key Initiatives Under the HCFAC Program
Several key initiatives operate under the umbrella of the HCFAC Program, each designed to address specific aspects of health care fraud and abuse:
- Health Care Fraud Prevention and Enforcement Action Team (HEAT): HEAT is a joint initiative between HHS, OIG, and DOJ, focusing on coordinated efforts to combat health care fraud. A crucial component of HEAT is the Medicare Fraud Strike Force, an interagency team targeting emerging and migrating fraud schemes. Since 2007, the Medicare Fraud Strike Force has charged over 3,018 individuals involved in more than $10.8 billion in fraud.
- The False Claims Act: This powerful legal tool allows the government to recover damages and penalties from individuals and companies that have defrauded federal health care programs. In 2016, the DOJ secured over $2.5 billion in settlements and judgments from civil cases involving fraud under the False Claims Act.
- State-of-the-Art Fraud Detection Technology: HCFAC funding supports the continuous enhancement of data analysis capabilities for detecting health care fraud. HHS-OIG utilizes predictive analytics, trend evaluation, and modeling to identify suspicious billing patterns and target oversight effectively. CMS’s Fraud Prevention System (FPS), implemented in 2011, uses similar technology to analyze Medicare fee-for-service claims in real-time, identifying and preventing fraudulent payments before they are disbursed.
- Enhanced Provider Screening and Enrollment Requirements: CMS has implemented stricter provider screening and enrollment procedures to prevent ineligible providers from billing Medicare. These measures, including site visits and revalidation processes, have led to the deactivation and revocation of over 652,000 enrollment records since 2011.
- Health Care Fraud Prevention Partnership (HFPP): The HFPP is a collaborative effort between the government and private insurers, states, and associations to share information and best practices in fraud prevention. With over 70 partner organizations representing over 65 percent of covered lives in the U.S., the HFPP facilitates data exchange and coordinated actions to combat fraud across the public and private sectors.
Ongoing CMS Fraud Prevention Efforts
Beyond the initiatives directly funded by the HCFAC Account, CMS undertakes numerous other program integrity activities. These include measuring improper payment rates, operating the Recovery Audit Program, and implementing prior authorization initiatives. CMS also actively integrates Medicare and Medicaid fraud prevention efforts, provides guidance to states and providers, and conducts investigations and audits.
Furthermore, CMS utilizes the authority granted by the Affordable Care Act to suspend Medicare payments to providers under investigation for credible fraud allegations. In FY 2016, there were 508 active payment suspensions, with 291 new suspensions imposed during that year, demonstrating CMS’s proactive approach to preventing fraudulent payouts.
Conclusion: A Continuing Commitment to Integrity
The Health Care Fraud and Abuse Control Program, born out of the HIPAA legislation, stands as a testament to the U.S. government’s commitment to protecting the integrity of the health care system and safeguarding taxpayer dollars. Created by Congress within the framework of HIPAA, the program has evolved into a powerful force against health care fraud, waste, and abuse. Through coordinated efforts, advanced technology, and robust legal tools, the HCFAC Program continues to adapt and innovate in the face of evolving fraud schemes. Its ongoing success is critical to ensuring that health care resources are used effectively and ethically, benefiting those who rely on these vital services.
For more information and updates on CMS news and initiatives, you can visit cms.gov/newsroom.
