Health Care Fraud Is Big And Growing Business Only Violent Crime Ranks Higher In Justice Department Priorities

Federal investigations of the booming business of health care fraud have quadrupled in four years, with the government chasing schemes ranging from false billing to the sale of unapproved heart catheters that killed patients, the Justice Department reported Thursday.

Health care fraud ranks behind only violent crime as a Justice Department priority, and the government has shifted substantial resources from financial crimes to health fraud.

The health abuses are widespread, Gerald Stern, the department’s special counsel for health care fraud, told reporters as he disclosed the first annual report on the issue. “It’s small providers, it’s large companies,” he said. “It is even those who are not in the health care industry itself but prey upon the system, not providing health care but creating scams.”

The government’s evaluation will “demonstrate to you that it’s an across-the-board problem, and we’re attacking it across the board,” Stern said.

“We have investigated fraudulent schemes by medical equipment dealers, ambulance companies, laboratories, hospitals, nursing homes and others,” Stern said.

The FBI had 1,500 cases under investigation in the past fiscal year, up from 1,051 a year before and a dramatic rise from 365 four years ago.

Stern is coordinating efforts between the Justice Department and other federal agencies to pursue fraud, using a variety of measures, including criminal and civil prosecutions, administrative sanctions or punishments.

Local U.S. attorneys who might otherwise have placed health care issues far down the list of potential cases are paying more attention because Washington has focused great intensity on the issue, making more FBI agents available for investigations, officials said.

The department’s report cited a wide variety of abuses, including:

False claims by laboratories for unnecessary blood tests.

Kickbacks to a doctor for prescribing a growth hormone drug.

Inflated bills to Medicare by a doctor who claimed to perform expensive laser procedures in eye surgery, but did nothing but remove simple sutures.

Kickbacks to doctors for referring patients to psychiatric hospitals.