Forensics Journal - Stevenson University 2015 | Page 71

FORENSICS JOURNAL

supervision, auditing and security maintenance of other departments
and programs, their primary responsibility lies with overseeing and
monitoring the Medicaid and Medicare programs and policing any
associated internal or external fraud, waste and abuse (Teplitzky &
Holden, 1990, p. 789).

HIPPA language was crafted to improve upon the efficiency and
effectiveness of healthcare systems while simultaneously reducing
fraud and waste within healthcare by making it easier to detect.
The ultimate goal was to protect the sensitive nature of healthcare
documentation while reducing administrative costs and wasted
expenditures (Chaikind, 2004, p. 3). One of HIPAA’s most wellknown functions is its Health Care Fraud and Abuse Control
(HCFAC) program, which apportions money to fund HHS,
Department of Justice (DOJ) and OIG healthcare fraud research,
detection and mitigation. Money recovered from health care fraud
cases funds the HCFAC program and the multi-agency participation
helps facilitate multi-directional and strength-in-numbers approaches
to combating healthcare fraud. In its first year alone, the HCFAC
program was earmarked to receive approximately $65 million in fraud
recovery monies. Even larger than the HCFAC program was HIPPA’s
establishment of the Medicare Integrity Program that allocates
funds and grants authority to CMS to contract with private entities
to perform financial audits and medical reviews as well as provide
regulation and policy education to healthcare providers participating
in the Medicare program. In its first year, the Medicare Integrity
Program was earmarked to receive approximately $450 million to
operate (Swendimen & O’Sullivan, 2002, p. 95).

Within the decade after the creation of HHS and OIG and the
passage of anti-kickback updates, very few kickback-related cases
were prosecuted by the Federal government because any instances
other than the most classic or egregious models of kickbacks were
difficult to prove and the Federal government was stretched thin
over other priorities. Due to this absence of successful prosecution
and conviction, kickbacks remained a firm presence within the
Medicaid and Medicare programs. It wasn’t until 1989 when a
stricter regulatory climate combined with OIG’s issuance of a
heightened fraud alert that providers became more conservative
with their use and involvement in kickback schemes (Rodwin,
1993, p. 121).
While the anti-kickback updates were less than successful at curbing
any worthwhile amount of program waste and abuse, other legislation
and regulations have been better situated to address past and present
issues with the programs and continue to evolve present-day. Both
the civil False Claims Act (FCA) and the Health Insurance Portability
and Accountability Act (HIPAA) are older pieces of legislation that
continue to undergo newer interpretations and development to
bring them into modern-day healthcare fraud combat. The FCA
was first enacted in 1863 after President Abraham Lincoln urged
Congress to create a solution to deter individuals from fraudulently
billing the U.S. government for supplies during the Civil War
(Truelson, 2001, p. 414). Today, the FCA is most known for its qui
tam provision that allows individuals to serve as whistleblowers – on
behalf of the government – who bring to light acts of fraud against
the government. Within 15 years of several 1986 amendments to
the FCA that updated protections for whistleblowers, $1.8 billion
was recovered by the U.S. Treasury due to whistleblowers (2001, p.
407). The largest ever whistleblower recovery of Federal dollars came
after a small, independent pharmacy in Florida notified officials of
over $2.2 billion Medicaid and Medicare dollars spent on drugs with
artificially inflated purchase prices sold by a group of pharmaceutical
manufacturers. A portion of the money recovered was awarded to the
Florida pharmacy responsible for bringing the inflated reimbursement
scheme to the attention of the government (Rollins & Perri, 2014,
p. 173). What makes the policy so effective at detecting fraud is the
whistleblower’s right to a percentage of the money recovered thus
incentivizing whistleblowers to alert authorities on potential fraud
schemes they have discovered.

The Medicare Integrity Program is one of several entities to use both
government and privately contracted resources to increase Medicaid
and Medicare provider oversight and compliance. Similar to Medicare
Integrity contractors are Recovery Audit Contractors (RACs) who
are hired and provided with Medicare provider and beneficiary data
from the government to mine for potential paid claims errors. The
contractors utilize algorithms to detect potential errors or fraud and
are then paid a percentage of the money they recover from providers.
The RAC program was mandated in 2003 as part of the Medicare
Prescription Drug, Improvement, and Modernization Act. When the
RAC program was created, Medicare was processing over 1.2 billion
annual claims submitted by over one million healthcare providers
(Green & Rowell, 2006, p. 119). Zone Program Integrity Contractors
work with the government to obtain claims data associated with
Medicare providers who submit more claims or bill at a higher rate
than most other Medicare providers within their community or
area. The contractors also explore Medicare drug claims for potential
overpayment, fraudulent activity or drug diversion schemes. A similar
program exists to measure improper payments within the Medicare
fee-for-service program that uses calculated error rates to identify
billing areas the OIG may want to target and explore (Fordney &
French, 2002, p. 44).
While Medicare received the most fraud prevention attention from
government regulation and legislation prior to the 2000s, fastgrowing Medicaid fraud, waste and abuse resulted in concentrated
action. Because the Federal government ݅́