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Efforts to curb Fraud, Waste and Abuse in healthcare take many forms and employ many tools. This page is devoted to linking explanations and resources related to the most frequently employed ones.

The Antikickback Act - This federal statute makes it a crime to offer or pay “remuneration” , directly or indirectly, in exchange for referrals of federal healthcare program business. Payments between healthcare providers and between providers and beneficiaries are both prohibited. As with the Stark law there are a number of exceptions and there are also “Safe Harbor regulations” that have been published by the Department of Health and Human Services’ Office of the Inspector General (DHHS OIG) . That Office also has a process which allows prospectively seeking an “Advisory Opinion” on a proposed arrangement to ensure that it will not violate the statute.

Some recent exemplar prosecutions:

  • Omnicare, a long-term care pharmacy, paid $4.19 M to settle claims that is "solicited and received" kicksbacks in various forms from drug manufacturer Amgen Inc. to participate in a "therapeutic exchange" program that took Medicaid patients off of a competitor's drug and put them on Amgen's Aranasp. (February 2014)

  • Carefusion Corp. will pay $40.1 Million to settle allegations that it paid more than $11Million in kickbacks to a physician with a key role at a standard setting organization , the National Quality Forum, in exchange for the physician's support of "off label" uses of one of its products.(January 2014)

  • Abbott Laboratories agreed to pay $5.475 Million to settle claims that it "knowingly paid prominent physicians for teaching assignments, speaking engagements and conferences" in exchange for use of the company's products at the hospitals the physicians were affiliated with. Notably the "prominent physicians" are not part of the settlement. (December 2013)

  • A Los Angeles physician will spend one year in federal prison and pay more the $1M for accepting kickbacks in exchange for fraudulent referrals of Medicare patients for homecare services they did not need or qualify for (December 2012)

  • Another Los Angeles physician paid $530,000 to settle civil charges in a similar, related matter (June 2012)

  • Sanofi-Aventis U.S paid $109M to settle allegations that its sales representatives gave free product samples and lavish dinners to physicians to induce them to administer and bill for the product (December 2012)

  • Novartis Pharmaceuticals Corp., which is currently operating under a Corporate Integrity Agreement, was recently sued for alleged kickbacks to doctors including "educational" presentations that took place at Hooters restaurants and aboard fishing boats.

  • Kickbacks result in False Claims - CR Bard, Inc. will pay more the $46M to settle allegations that various forms of payments to hospitals and physicians tainted subsequent claims for Bard braychytherapy "seeds" to the federal healthcare programs. Besides that theory one of the unique terms of the deal is the company's agreement to specific revisions of its corporate compliance program.

  • Doctors going to prison - Although many kickback cases focus on the person or company paying the illegal incentive, the Orange MRI prosecution has been marked by the convictions and subsequent prison terms of many, like this cardiologist, who accepted cash payments for their referrals. Similarly, this San Diego physician will spend 5 months in prison and another five months in a halfway house for writing prescriptions for unneeded power wheelchairs in exchange for cash.

Many states also have Antikickback Acts, some identical to the federal provisions, some not.

False Claims – Civil and Criminal

The federal False Claims Act was first passed in 1863 to provide a way to charge those intent on selling the same horse to the government more than once. The law has been amended several times since, increasing the penalties for false claims. Here's a description of the government's authority from a recent settlement announcement:

  • "Enacted during the Civil War, the False Claims Act is the government’s primary civil tool to combat fraud and abuse in federal programs and procurement. The Act allows the government to recover triple the amount of its actual damages, plus a civil penalty of $5,500 to $11,000 for each false claim and permits the payment of a portion of any settlement or judgment under the Act to individuals who bring fraud to the attention of authorities."

The Department of Justice publishes a “primer” which is a good place to start understanding the law which applies not only in healthcare but whenever a claim is submitted to the federal government. A speech from a Principal Deputy Assistant Attorney General also describes how the different aspects of false claims cases work together.

Civil Monetary Penalties (CMPs)

CMPs are assessed for self-referral schemes, EMTALA Violations, knowing submission of false claims and other program violations. Here’s the OIG’s description of its authority and how it is used.

  • Here's a settlement of a civil false claim action for alleged failure to provide required physician supervision while conducting a radiology procedure - and then billing as though the physician was present.

  • This settlement with a University teaching hospital was based on claims to the Medicare program for items that clinical trial sponsors agreed - and in some cases did - pay for.


Each year thousands of individuals are “excluded” from participation in the Medicare, Medicaid and other federal healthcare programs. Exclusion may come as the result of license revocation (the most frequent cause), conviction of a program related crime, patient abuse or neglect or defaulting on federally insured education loans. During the period of their exclusion (generally at least three years) not only may these individuals not bill the programs but they may not be employed by those that do, creating a periodic “exclusion checking” responsibility for healthcare providers everywhere. For example, in February 2013 three different providers found their settlements on the OIG's list related to "False and Fraudulent claims" because they had each employed an excluded individual. The OIG also has the authority to waive exclusion, except for patient neglect or abuse, when requested by the administrator of a State of federal health program.

The OIG maintains a database on its website where the list of the excluded can be viewed, searched or downloaded. The Office also published a update of its Special Advisory Bulletin (SAB) about exclusion duties in May 2013.

Health Care Fraud and Abuse Control Program

Started in 1996 by the HIPAA Act, the HCFACP is under the joint direction of the US Attorney General and the Secretary for Health and Human Services and focused on fraud and abuse in the federal healthcare programs, particularly Medicare, Medicaid and CHIP (the Children’s Health Insurance Programs). An appropriation from the Medicare Trust Funds and other discretionary spending authorized by Congress pay for the program’s activities.

Each year these agencies compile and submit to Congress a report detailing the amounts their efforts have recovered through criminal fines, asset forfeitures and civil monetary penalties and the cost of those efforts. The Report describes many enforcement actions taken by the agencies and also program integrity efforts of the Centers for Medicare and Medicaid Services. The FY 2012 report described over $3B in recoveries for $600M spent on the program, although the three year rolling average return on investment calculation shows an average return of $7.80 for each dollar spent.

HEAT - One of the Program’s principal activities is the Health Care Fraud Prevention & Enforcement Action Team (HEAT) which since May 2009 has coordinated law enforcement efforts, attorneys and auditors from both the Department of Justice and HHS. The “Medicare Fraud Strike Force” teams that have focused on criminal fraud activities in 9 cities are part of HEAT. As well as improved information sharing for enforcement the HEAT initiative also contains a training component for providers, certain groups of program beneficiaries and prosecutors.

Qui Tam Relators -

Some of the federal government's success in in this area is due to civil law suits filed on its behalf by private citizen "relators" who are then entitled to a share of any verdicts or settlements. For example, in 2008 two former employes of Kyphon Inc. (now owned by Medtronic) filed such a suit alleging that the company for seven years (2001 - 2008) had "counseled" hospitals to treat patients receiving a minimally invasive spinal surgery that used Kyphon's products as inpatients rather than outpatients. This "counseling" earned the company a $75 million settlement in 2008 and a Corporate Integrity Agreement.. It has also earned the government - and the two relators - a series of settlements with hospitals who followed Kyphon's advice. As of July 2013 , 91 hospitals had settled kyphoplasty false claims allegations for more than $147 million. The two relators' share of those settlements has topped $23 million. Here are the press releases: May 2009, September 2009 , May 2010, May 2011, February 2012, July 2013.

The announcement that the government has joined a "qui tam" case is a signal that it believes in its merit and the potential for a recovery.

Training FWA Away -

As part of their contracts with the government, companies offering Medicare Part D (prescription drug) benefits and Medicare Advantage (Part C) are required to train their subcontractors on Fraud, Waste and Abuse. This has resulted in a number of approaches, such as:

Other FWA Resources on the Web:

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