Health care fraud crackdown nets $4 billion

By Parija Kavilanz, senior writer


NEW YORK (CNNMoney) -- The government collected a whopping $4 billion last year -- the largest sum ever recovered in a single year -- through its health care fraud prevention and enforcement efforts, according to a new report Monday.

"This is the highest annual amount ever recovered from people who attempted to defraud seniors and taxpayers," the Department of Health & Human Services said in a statement.

HHS and the Justice Department jointly created the Health Care Fraud Prevention & Enforcement Action Team (HEAT) in 2009, with the intention to prevent waste, fraud and abuse in programs such as Medicare and Medicaid.

"Through this initiative, we are working in partnership with government, law enforcement, industry leaders, and the public to protect taxpayer dollars, control health care costs, and ensure the strength and integrity of our most essential health care programs," associate Attorney General Thomas Perrelli, said in a statement.

The agencies said $4 billion was stolen between Oct. 1 2009 and Sept. 30, 2010.

The HEAT task force issued 140 indictments against 284 defendants who fraudulently billed Medicare more than $590 million.

Federal prosecutors opened 1,116 criminal health care fraud investigations and a total of 726 defendants were convicted. 146 defendants were imprisoned, averaging more than three years of jail time.

But the biggest chunk of money collected came not from individual fraudsters but from large drugmakers -- accounting for half of the $4 billion recovered.

Botox-maker Allergan (AGN, Fortune 500), Inc. agreed to pay the government $600 million last year to resolve criminal and civil liability arising from its marketing of Botox for treatment of headaches and other issues that were not approved by the Food and Drug Administration.

Novartis (NVS) agreed to pay $422.5 million to resolve criminal and civil liability arising from the illegal marketing of certain pharmaceutical products.

In April 2010, AstraZeneca (AZN) paid $520 million to resolve allegations that the company marketed the anti psychotic drug, Seroquel, for uses not approved by the FDA and paid kickbacks to doctors.

Tougher rules ahead: In 2011, HHS said the screening process for Medicare providers and suppliers will become tougher "to help keep bad actors out of Medicare, Medicaid and CHIP [Children's Health Insurance]" programs.

Among the new steps: More rigorous screening for providers and suppliers to check for previous fraudulent activity; providers that have been kicked out of Medicare, Medicaid or CHIP programs in one state will be barred from all Medicaid and CHIP programs.

Also, the government will temporarily halt payments to providers and suppliers being investigated for fraud. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,461.32 -153.49 -0.92%
Nasdaq 4,382.85 -36.63 -0.83%
S&P 500 1,927.11 -14.17 -0.73%
Treasuries 2.23 0.02 0.95%
Data as of 2:46am ET
Company Price Change % Change
Bank of America Corp... 16.40 -0.20 -1.20%
Yahoo! Inc 42.00 1.82 4.53%
Apple Inc 102.99 0.52 0.51%
Facebook Inc 78.37 -0.32 -0.41%
Boston Scientific Co... 12.32 0.29 2.41%
Data as of Oct 22

Sections

Las Vegas might have first class shopping, dining and nightlife. But for serious gambling, head to Macau. More

The midterm elections are around the corner, and the economy remains a top concern. With unemployment down and inflation low, why do people still feel the economy stinks? More

Uber canceled its free rides with hot girls promotion in Lyon, France before it ever launched. More

Startups focusing on "ag tech," or agricultural technology, are gaining the attention of farmers and investors More

Dressing up in crazy costumes, traveling the world, posing for photos -- and getting paid to do it. Here are journal entries from a day in the life of professional "cosplay" character, Linda Le. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.