Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 17,081.89 -49.97 -0.29%
Nasdaq 4,796.61 -42.03 -0.87%
S&P 500 2,003.69 -13.77 -0.68%
Treasuries 2.06 -0.03 -1.67%
Data as of 10:17pm ET
Company Price Change % Change
Bank of America Corp... 15.52 0.00 0.00%
EMC Corp 27.55 -0.80 -2.82%
General Electric Co 27.87 -0.22 -0.78%
Alcoa Inc 10.03 -0.05 -0.50%
Intel Corp 32.04 -0.17 -0.53%
Data as of 4:02pm ET


JPMorgan's earnings report on Tuesday show how the late summer market chaos and low interest rates hurt its business. More

A big tax hike on the rich won't reduce inequality in America much, new study finds. More

American and British police have managed to stop a massive hacking operation that infected computers worldwide, stealing at least $10 million from the United States alone. More

This pension fund mistakenly overpaid 589 retirees, and now demands that they pay it back -- with interest. More