Testimony Before the United States House of Representatives 
Committee on Ways and Means: 
Subcommittee on Oversight 
 
 
 
 
Fraud in Medicare  
 
Testimony of: 
 
Gary Cantrell 
Deputy Inspector General for Investigations 
Office of Investigations 
Office of Inspector General  
U.S. Department of Health and Human Services 
 
 
 
 
March 24, 2015 
10 a.m. 
Location: Rayburn House Office Building, Room B-318  
   
Testimony of: 
Gary Cantrell 
Deputy Inspector General for Investigations 
 U.S. Department of Health and Human Services, Office of Inspector General 
 
Good morning Chairman Roskam, Ranking Member Lewis, and other distinguished 
members of the Oversight Subcommittee.  I am Gary Cantrell, Deputy Inspector General for 
Investigations for the Office of Inspector General (OIG), U.S. Department of Health and 
Human Services (HHS).  I appreciate the opportunity to testify about OIGs efforts to 
combat Medicare fraud, a top priority.  OIG is a leader in the fight against Medicare fraud.  
We use data analytics to detect and investigate Medicare fraud and to target our resources 
for maximum results.  Those results have included, for example, almost $15 billion in 
investigative receivables and more than 2,700 criminal actions in the past 3 years.  Data-
driven efforts are key to staying ahead of the evolving Medicare fraud schemes we uncover, 
which can involve complex criminal networks and too often cause patient harm in addition 
to financial loss.  Our partnerships with other Government entities and the private sector 
are also invaluable to our enforcement successes.  But we are not focused solely on 
enforcement.  The best way to combat fraud is by preventing it in the first place, and OIGs 
oversight efforts support all aspects of program integrity.  We also strive to cultivate a 
culture of compliance in the industry through various efforts, including guidance. 
 
 OIG IS A LEADER IN THE FIGHT AGAINST MEDICARE FRAUD 
 
OIGs mission is to protect the integrity of the HHS programs and operations and the health 
and welfare of the people they serve.  Fighting fraud in Medicare is a critical component of 
that mission.  Medicare spending in 2013 totaled almost $583 billion, and the program 
served more than 52 million aged and disabled individuals.1  Protecting those beneficiaries 
and the integrity of that Federal spending is paramount.   
 
OIG advances our mission through a robust program of audits, evaluations, investigations, 
enforcement actions, and compliance efforts.  In todays testimony, I focus on our 
investigation and enforcement activities, led by OIGs Office of Investigations, in 
collaboration with our attorneys, evaluators, auditors, and data analytics experts.  The 
Office of Investigations is the law enforcement component of OIG and investigates fraud 
                                                           
1 Data from Medicare Trustees Report 2014, available at http://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2014.pdf. 
2  House Committee on Ways and Means  Subcommittee on Oversight 
  and abuse against HHS programs and holds wrongdoers accountable for their actions.  Our 
special agents have full law enforcement authority and affect a broad range of actions, 
including the execution of search warrants and arrests.2  We use state-of-the art 
investigative techniques and innovative data analytics to fulfill our mission.   
 
OIG investigations have produced record-setting results.  During the last 3 fiscal years 
(FY2012-FY2014), OIG investigations have resulted in $14.8 billion in investigative 
receivables (dollars ordered or agreed to be paid to government programs as a result of 
criminal, civil, or administrative judgments or settlements); 2,709 criminal actions; 1,172 
civil actions; and 10,363 program exclusions. 
 
 
The return on investment for our work is significant.  OIG and our HHS and Department of 
Justice (DOJ) partners have returned $7.70 for every $1 invested in the Health Care Fraud 
and Abuse Control Program (HCFAC).3  HCFAC is OIGs largest funding source.  Since 
HCFACs inception in 1997, the HCFAC program activities have returned more than $27.8 
billion to the Medicare Trust Fund.  HCFACs continued success confirms the soundness of a 
collaborative approach to identify and prosecute the most egregious instances of health 
care fraud, to prevent future fraud, and to protect program beneficiaries.   
 
OIG USES DATA ANALYTICS TO DETECT AND INVESTIGATE MEDICARE FRAUD AND 
TO TARGET OUR RESOURCES FOR MAXIMUM RESULTS  
 
OIG is a front-runner in the use of data analytics to detect and investigate health care fraud.  
We use innovative analytic methods to analyze billions of records and data points to 
identify trends that may indicate fraud, geographical hot spots, emerging schemes, and 
individual providers of concern.  At the macro-level, we analyze data patterns to assess 
fraud risks across Medicare services and provider types and geographically to prioritize 
and deploy our resources.  At the micro-level, we use data analytics, including near-real-
time data, to identify fraud suspects and conduct our investigations as efficiently and 
effectively as possible.      
 
Our approach to fighting prescription drug fraud provides an example.  Prescription drug 
abuse is a serious national problem.  OIG has been monitoring the growth in Medicare Part 
D spending for drugs, which totaled $69.7 billion in 2013 and is projected to total $171.7 
                                                           
2 Inspector General Act of 1978. 
3 Data from the FY 2014 Health Care Fraud and Abuse Control Program Report, available at 
http://oig.hhs.gov/publications/docs/hcfac/FY2014-hcfac.pdf. 
 
3  House Committee on Ways and Means  Subcommittee on Oversight 
  billion by 2023.4  These estimates alone underscore the need for strong program integrity 
and enforcement efforts.  However, that trend is just one consideration.  We combine our 
field intelligence with data analytics to assess vulnerabilities across the program and to 
deploy our special agents to investigate the most egregious cases of suspected fraud.  For 
example, we worked with OIGs evaluators to develop indicators of questionable billing for 
Part D drugs that may be associated with fraud and abuse based on our experience with 
prescription drug investigations.  OIG evaluators designed studies using sophisticated data 
analytics to identify questionable billing by retail pharmacies, prescribers with aberrant 
patterns, individuals writing prescriptions without authority to prescribe, and Schedule II 
drugs billed as refills.  These studies generated numerous law enforcement leads, resulting 
in multiple ongoing investigations.  They also identified systemic vulnerabilities in the Part 
D program and made recommendations to CMS to better prevent fraud.   
 
 
 
Data Analytics Have Been a Key Factor in the Success of Our Medicare Fraud Strike 
Force  
 
The remarkable success of the Medicare Fraud Strike Force (Strike Force) showcases the 
effectiveness of our use of data analytics to detect and investigate health care fraud.  Strike 
forces began in March of 2007.  In 2009, HHS and DOJ announced the creation of the Health 
Care Fraud Prevention and Enforcement Action Team, a joint agency initiative known as 
HEAT.  A key component of HEAT is Strike Force, which harnesses the efforts of OIG and 
                                                           
4 The Board of Trustees Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 
2014 Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, July 2014.  
4  House Committee on Ways and Means  Subcommittee on Oversight 
  DOJ, including headquarters, Offices of U.S. Attorneys, and the Federal Bureau of 
Investigation, along with State and local law enforcement, to fight Medicare fraud in 
geographic hotspots.  The Strike Force teams use near-real-time data to pinpoint fraud hot 
spots and aberrant billing as it occurs.  This coordinated and data-driven approach to 
identifying, investigating, and prosecuting fraud has produced record breaking results.  
Since their inception in March 2007, Strike Force teams have charged more than 2,097 
defendants who have collectively billed the Medicare program for more than $6.5 billion.5   
 
HEAT actions have led to a 75 percent increase in individuals charged with criminal health 
care fraud during the initial stages, and the program has maintained significant 
enforcement success throughout its history.6  Through HEAT, we have expanded Strike 
Force teams to operate in nine locations:  Miami, Florida; Detroit, Michigan; southern 
Texas; Los Angeles, California; Tampa, Florida; Brooklyn, New York; southern Louisiana; 
Chicago, Illinois; and Dallas, Texas.   
 
In a recent example, a national Strike Force operation in May 2014 resulted in charges 
against 90 individuals, including 27 doctors, nurses, and other medical professionals, for 
their alleged participation in multiple Medicare fraud schemes spanning many health care 
services.  Collectively, the doctors, nurses, licensed medical professionals, health care 
company owners and others were charged with conspiring to submit approximately $260 
million in fraudulent billings.7  The cases are currently being prosecuted and investigated 
by Strike Force teams.   
 
Our Data-Driven Approach Produces Measurable Results 
 
As a result of our data-driven enforcement efforts, we have seen strong and sustained 
declines in Medicare payments, both nationally and in specific geographical areas of 
increased enforcement.  Our criminal prosecutions and monetary recoveries have 
increased, while we have seen a measurable decrease in payments for certain fraud-prone 
health care services.  In one example, following targeted enforcement and other oversight 
activities, payments for Community Mental Health Centers (CMHCs) nationally decreased 
from $70 million to under $5 million per quarter following Federal enforcement and 
oversight action.  
                                                           
5 Data from the FY 2014 Health Care Fraud and Abuse Control Program Report, available at 
http://oig.hhs.gov/publications/docs/hcfac/FY2014-hcfac.pdf. 
6 See HEAT Task Force, available at http://oig.hhs.gov/fraud/strike-force. 
7 See Medicare Fraud Strike Force charges 90 individuals for approximately $260 million in false billing, available at 
http://www.hhs.gov/news/press/2014pres/05/20140513b.html.   
5  House Committee on Ways and Means  Subcommittee on Oversight 
  Medicare Payments for Community Mental Health Centers (CMHC)
U.S. National Trends and Miami-area CBSA 2006-2014
$80
s) $60
n
o
milli
n  $40
s (i Miami-Miami Beach-Kendall, FL
ar National
oll
D $20
$0
2006Q1 2007Q1 2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1 2014Q1
Quarter
Analysis Run Date: March 16, 2015
Note: The results of this analysis are subject to change as claims are adjusted or deleted.  Medicare timely filing requires providers to submit their claims
within 12 months of the date of service.  Medicare Claims Processing Manual, Chapter 1, Section 70.1.
 
 
Coordination between the Strike Force teams and the Centers for Medicare & Medicaid 
Services (CMS) has also contributed to a dramatic decline in payment for home health care 
in Miami and throughout Florida.  After OIG uncovered billing schemes relating to home 
health outlier payments, CMS put into effect a limit on the percentage of outlier payments 
that each home health agency (HHA) can claim.  Since 2010, Medicare payments for home 
health care nationally decreased by more than $250 million per quarter, more than $1 
billion annually. 
 
 
6  House Committee on Ways and Means  Subcommittee on Oversight 
  We have also seen sustained declines in Medicare payments for durable medical equipment 
(DME) and ambulance services in targeted areas following Federal enforcement and 
oversight action.  Total Medicare payments for ambulance services in Houston, one of the 
targeted geographic areas, are down more than 40 percent from $32 million to $18 million 
per quarter since 2010.   
 
 
 
In 2007, numerous federal oversight and administrative initiatives were launched by CMS, 
OIG, and others, including the Medicare Fraud Strike Force.  Miami-area DME payments 
decreased from over $40 million per quarter in 2007, before the Strike Forces first 
takedown, to $15 million per quarter in 2011 - with approximately $100 million in annual 
savings thereafter.  These unprecedented results highlight our continued need for strong 
data analytic efforts to detect and investigate health care fraud.   
 
Medicare Payments for DME,
Calendar Years 2006 - 2014
Miami-Miami Beach-Kendall, FL
$80
ns
Millio $60
n 
nt i $40
u
o
m
A
d  $20
ai
P
$0
2006Q1 2007Q1 2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1 2014Q1
Quarter
Analysis Run Date: March 16, 2015
Note: The results of this analysis are subject to change as claims are adjusted or deleted.  Medicare timely
filing requires providers to submit their claims within 12 months of the date of service.  Medicare Claims
Processing Manual, Chapter 1, Section 70.1.
 
7  House Committee on Ways and Means  Subcommittee on Oversight 
  MEDICARE FRAUD SCHEMES DRAIN BILLIONS OF DOLLARS AND OFTEN HARM 
BENEFICIARIES 
 
Fraud Evolves and Migrates 
 
As our health care system evolves, so do the associated fraud schemes.  OIG monitors 
Medicare payments to detect fraud schemes through data analytics and real-time field 
intelligence from our agents and program integrity partners.  Fraud schemes can recur 
over long periods of time, or emerge as new schemes develop.  For example, billing for 
home health services that are not received is a recurring fraud scheme.  By its very nature, 
this fraud is difficult to detect if both the patient and physician conspire with a fraudulent 
home health agency to bill for services that were not rendered.  An emerging variation of 
this theme is a beneficiary who receives adult daycare services billed as home health 
services.  Not only is the billing of these services misrepresented, but the services are 
neither allowed nor medically necessary.   
 
Fraud schemes also migrate.  Fraud migration can be associated with enforcement efforts, 
such as targeted Strike Force action; administrative efforts, such as billing edits and 
changes in payment policy; or simply because fraud is known to be transient.  For example, 
increased enforcement effort in a specific geographical area may result in migration of 
criminals to a different geographical area to continue their criminal activity.  Fraud also 
expands and replicates in certain geographical areas as criminals collaborate with one 
another.  If a fraud scheme is successful and continues uninterrupted, criminals will 
duplicate the scheme, even if the original criminal mastermind has moved to another area.  
OIG and other program integrity partners diligently track fraud migration of both types and 
respond as needed to the constantly evolving landscape of health care fraud.   
 
Medicare Fraud is Often Perpetrated by Complex Criminal Networks 
 
Description of Fraud Schemes 
OIG continues to investigate complex health care fraud schemes perpetrated by criminal 
networks.  These groups take a systematic, organized approach to committing fraud and 
can establish hierarchies within their networks.  Criminal networks have become a 
pervasive problem in fraud schemes involving home health, DME, prescription drugs, 
transportation, and medical clinic settings.  Criminal networks may either solicit persons to 
use as business owners for a sham corporation, or may steal physician or other identities to 
use for billing false claims to Medicare.  They often hire recruiters to buy lists of Medicare 
patient names and identification numbers or identify parties willing to participate in the 
8  House Committee on Ways and Means  Subcommittee on Oversight 
  fraud schemes.  These groups pose a huge threat to the integrity of the Medicare trust 
funds because their primary objective is to organize with the intent of stealing as much 
money from Medicare as quickly as possible.   
 
Enforcement Action 
We have worked diligently to stop criminal enterprises by strategically partnering with 
other law enforcement entities and DOJ.  In a recent Strike Force case, an organized 
criminal network perpetrated a $6.2 million Medicare fraud scheme involving Miami HHAs.  
The owners of the HHAs solicited payments from and offered bribes to other businesses to 
participate in the fraudulent billings.  The HHAs used patient recruiters to find complicit 
Medicare patients and then paid kickbacks for the use of their identities in billing Medicare 
for home health and therapy services that were never provided.  Co-conspirators included 
clinic owners, therapists, and complicit Medicare beneficiaries.  Two of the subjects in the 
case were each sentenced to serve over 5 years imprisonment, and both were ordered to 
pay over $6.2 million in restitution.  Others are awaiting sentencing in this matter.      
 
Our investigation of a Michigan pharmacist unraveled a sophisticated criminal enterprise.  
Twenty-six defendants were convicted for defrauding Medicare of nearly $58 million.  A 
pharmacist concealed his ownership of 26 pharmacies through the use of straw-owners 
consisting of physicians, fellow pharmacists, and associates.  The pharmacy owners offered 
and paid kickbacks, bribes, and other inducements to prescribers in exchange for their 
writing fraudulent prescriptions for Medicare patients.  The leader behind the criminal 
enterprise was sentenced to 17 years in prison and ordered to pay $18.9 million in 
restitution, and 5 of his co-conspirators have been sentenced to a combined 19 years in 
prison and ordered to pay more than $8.4 million in restitution.    
 
Along with our law enforcement partners and DOJ, we investigated the largest Medicare 
fraud scheme ever perpetrated by a single criminal enterprise successfully charged by DOJ.   
Armenian nationals established phantom medical clinics using stolen physician identities 
to submit entirely fictitious bills to Medicare.  Patients did not receive treatments and 
doctors did not perform services in these phantom clinics.  The criminals successfully 
operated over 118 phantom clinics responsible for submitting $163 million in false claims 
to Medicare.  One of the leaders of this fraud scheme was sentenced to 125 months in 
prison, and over 28 defendants were charged in total.   
 
 
 
 
9  House Committee on Ways and Means  Subcommittee on Oversight 
  Medical Identity Theft Harms Medicare and Its Beneficiaries 
 
Description of Fraud Schemes 
Medical identity theft in relation to Medicare occurs when a beneficiarys personally 
identifiable information (PII) is stolen and then used to fraudulently bill Medicare for 
medical services, equipment, or prescription drugs.  Medical identity theft is on the 
increase;8 it is rampant and is a key element in many of the health care fraud schemes 
investigated by OIG. 
 
Medical identity theft is often accomplished with the use of recruiters or marketers.  
Recruiters entice beneficiaries to give their identifying information (including their 
Medicare numbers or Health Insurance Claim Numbers) by promising the beneficiaries 
some kind of kickback.  This can be in the form of money, services, equipment, 
prescriptions, or narcotics.  Other avenues of illegally acquiring beneficiary PII include the 
use of insiders who may work in the health care profession and have access to large 
amounts of beneficiary PII.  These insiders steal large volumes of beneficiary PII and then 
sell it to co-conspirators who have the ability to bill Medicare using this information. 
 
Enforcement Action 
Although it may be difficult to predict when and where a fraudulent entity will commit 
Medical identity theft in the furtherance of health care fraud, OIG has had successes in 
ensuring that such entities are investigated and prosecuted for these actions. 
 
OIG investigated an HHA owner who paid illegal kickbacks to patient recruiters to obtain 
the information of Medicare beneficiaries; this information was then used to submit over 
$12 million in false claims to Medicare for home health services that were not medically 
necessary or were not provided.  The HHA owner also created fake patient files in an 
attempt to fool a Medicare auditor and make it appear as though home health services 
were provided and were medically necessary.  This subject has pleaded guilty to Medicare 
fraud and tax fraud. 
 
OIG investigated a hospice health care fraud case in which the owner paid another 
individual large sums of money to illegally obtain names and PII for multiple Medicare 
beneficiaries.  The hospice owner then used that illegally obtained beneficiary information 
                                                           
8 Ponemon Institute, Fifth Annual Study on Medical Identity Theft, February 2015, p. 2, available at 
http://medidfraud.org/wp-content/uploads/2015/02/2014_Medical_ID_Theft_Study1.pdf. 
 
10  House Committee on Ways and Means  Subcommittee on Oversight 
  to fraudulently bill Medicare for millions of dollars of hospice services that were never 
provided or were for beneficiaries who were not eligible for the hospice services.  The 
hospice owner was sentenced to 70 months imprisonment and 3 years of supervised 
release.  The individual who sold the beneficiary PII for illegal use was sentenced to 14 
months imprisonment and 3 years of supervised release for her part in the conspiracy.  
 
OIG investigated a pharmacy chain owner who engaged in a health care fraud scheme by 
submitting false claims for prescription refills.  The pharmacy owner billed Medicare and 
Medicaid for prescription refills when the beneficiaries had not requested refills and 
indeed did not receive the refills.  The medications targeted for these refills were often 
expensive HIV and cancer medications intended for very ill customers.  The pharmacy 
owner, along with co-conspirators, falsely used the names and PII of hundreds of 
beneficiaries to conduct this fraud.  This subject was convicted by jury of health care fraud 
and aggravated identity theft. 
 
OIG Prioritizes Fraud Cases That Jeopardize Patients Health or Safety 
 
Description of Fraud Schemes 
As previously noted, expenditures in Medicare Part D are increasing significantly.  The sales 
of most medications occur legally and go to patients with a documented need.  However, 
OIG is seeing an increasing amount of fraud in Part D and has a wide portfolio of work 
involving pharmaceutical matters, including prescription drug diversion.9  The prescription 
fraud schemes are complex crimes involving many co-conspirators, including health care 
professionals, patient recruiters, pharmacies, and complicit beneficiaries.  Often it  involves 
other crimes, such as criminal enterprises and medical identity theft.  OIG has made Part D 
fraud one of its top priorities.  Our concern is prompted not only by program financial 
losses, but also by the predictable patient harm that occurs when prescription drugs are 
not used in their intended manner. 
 
Enforcement Action 
In an egregious example of patient harm, a 34 year-old traveling health care technician 
accessed Fentanyl while on duty.  Fentanyl is a powerful pain medication and anesthetic 
and is a controlled substance.  The technician was aware he was infected with the hepatitis 
C virus.  While on duty, he would take the syringes of Fentanyl, inject himself with the drug, 
refill the syringes with saline, and replace them for use on unsuspecting patients.  During 
this process, he contaminated the syringes with his infected blood.  The syringes, now 
                                                           
9 See Spotlight on Drug Diversion, available at http://oig.hhs.gov/newsroom/spotlight/2013/diversion.asp. 
11  House Committee on Ways and Means  Subcommittee on Oversight 
  tainted with hepatitis C, were injected directly into patients, thereby infecting them with 
the virus.  At least 45 of the patients contracted hepatitis from these injections.  After an 
investigation by OIG and law enforcement partners, he received a 39-year sentence. 
 
Another example of controlled drug fraud involved a physician who wrote illegal 
prescriptions for complicit beneficiaries, who were transported by the vanload to his 
practice.  There they received medically unnecessary prescriptions for oxycodone-based 
products.  The pseudo-patients used Medicare, Medicaid, and private insurance cards to 
pay for the prescriptions, then passed more than 700,000 pills to 6 different drug 
trafficking organizations.  The physician along with 61 of his associates received a 
combined 253 years in prison.  The physician himself received 20 years and was ordered to 
forfeit $10 million. 
 
Prescription drug fraud and diversion are not limited to controlled substances, but also 
involve expensive, non-controlled substances, which are often not dispensed by the 
pharmacy.  Both medication groups lead to patient harm when the drugs are not used in 
medically necessary or approved manner.   
 
An example of non-controlled drug fraud involved a Detroit area hematologist-
oncologist.  The physician prescribed and administered aggressive chemotherapy and 
other infusion therapies to patients who did not need them or did not have cancer.  He 
exploited vulnerable patients with a fearful diagnosis, solely to increase billings to 
Medicare and private insurers.  Approximately $225 million in claims were submitted to 
Medicare over 6 years.  The physician has pleaded guilty, and is awaiting sentencing. 
 
OIG COLLABORATES WITH GOVERNMENT AND PRIVATE SECTOR PARTNERS 
DOMESTICALLY AND GLOBALLY TO COMBAT HEALTH CARE FRAUD 
 
OIG continuously looks for ways to enhance the relevance and impact of our work by 
engaging and working with domestic and international partners.  For example, because of 
the need for international assistance to locate and apprehend fugitives from our health care 
investigations that have left the United States, OIG partners with lNTERPOL, the Bureau of 
Diplomatic Security, and other law enforcement agencies.  We currently have over 170 
fugitives from our health care fraud investigations.  In 2011, OIG established a Most 
Wanted Fugitive Web site to assist in locating fugitives who are running from health care 
fraud charges.  Since OIGs Most Wanted Fugitives Web site was launched, more than 50 
fugitives have been captured.   OIG is also actively engaged in the Global Health Care Anti-
Fraud Network (GHCAN), which was founded in 2011 to promote partnership and 
12  House Committee on Ways and Means  Subcommittee on Oversight 
  communication between international organizations in order to reduce and eliminate 
health care fraud around the world.10     
 
Domestically, OIG collaborates with internal and external stakeholders to combat health 
care fraud, as demonstrated by our leadership in both the Healthcare Fraud Prevention 
Partnership (HFPP)11 and The National Health Care Anti-Fraud Association (NHCAA).  
HFPP is a groundbreaking partnership between the Federal and private sectors to share 
data and information for purposes of detecting and combating fraud, waste, and abuse in 
health care.  The HFPP was created as a voluntary public-private partnership, between the 
Federal Government, State officials, private health insurance organizations, and health care 
anti-fraud associations.  NHCAA is the leading national nonprofit organization focused 
exclusively on combating health care fraud and abuse.12  The NHCAA mission is to protect 
and serve the public interest by increasing awareness and improving the detection, 
investigation, civil and criminal prosecution, and prevention of health care fraud and abuse.   
 
OIG RECOMMENDS PROGRAM INTEGRITY IMPROVEMENTS TO HELP PREVENT 
MEDICARE FRAUD 
 
Bringing fraud perpetrators to justice is fundamental to OIGs mission; however, 
enforcement alone will not solve the problem.  The most effective way to fight fraud is to 
prevent it from occurring.  One of the ways OIG seeks to achieve that goal is by making 
recommendations to address fraud vulnerabilities and better safeguard the Medicare 
program and its beneficiaries.  Below are highlights of key OIG recommendations to help 
prevent some of the fraud schemes outlined in my testimony.  For further details and 
additional OIG recommendations, see OIGs Compendium of Unimplemented 
Recommendations issued earlier this month.13 
 
  Prescription Drug Abuse:  CMS should restrict certain Part D beneficiaries to a 
limited number of pharmacies or prescribers.  This practice, known as lock-in, is 
currently used by some State Medicaid programs and could help reduce inappropriate 
drug utilization by Part D beneficiaries.14 
 
                                                           
10 For more information on GHCAN, visit: http://www.ghcan.org/. 
11 For more information on HFPP, visit: http://hfpp.cms.gov/. 
12 For more information on NHCAA, visit: http://www.nhcaa.org/. 
13 The Compendium is available online at http://oig.hhs.gov/reports-and-
publications/compendium/files/compendium2015.pdf.  
14 Part D Beneficiaries With Questionable Utilization Patterns for HIV Drugs, OEI-02-11-00170, August 2014. 
13  House Committee on Ways and Means  Subcommittee on Oversight 
    Medicare Part C and D Fraud Reporting:  CMS should require Medicare Part C 
(Medicare Advantage) and Part D plan sponsors to report fraud and abuse 
incidents.  Oversight of Medicare Part C (Medicare Advantage or MA) and Medicare 
Part D is hampered by a lack of accurate, timely, and complete data on fraud and abuse 
incidents that would facilitate oversight efforts.15 
 
  Inappropriate Home Health Care:  CMS should enhance its oversight mechanisms 
to improve compliance with the home health face-to-face requirement.  HHAs 
are required to obtain documentation that the provider who certifies that a Medicare 
beneficiary needs home health care had a face-to-face encounter with that beneficiary.  
This safeguard is intended to reduce inappropriate payments for home health care, but 
OIG found high rates of noncompliance.16 
 
  Social Security Numbers on Medicare Cards:  Removing Social Security numbers 
from Medicare cards is one step that would help protect the PII of Medicare 
beneficiaries.17  Experts in health care program integrity advise that Medical Identity 
Theft is a prevalent and increasing crime that is closely linked to Medicare fraud, and 
additional safeguards are needed to protect the identities of beneficiaries.   
 
CONCLUSION 
 
The need to protect the Medicare program and the beneficiaries it serves from fraud and 
harm has never been more important.  OIG, working with our internal and external 
partners, will continue using data analytics to target our resources for maximum results.   
We would like to express our appreciation to Congress for their sustained commitment 
towards our mission and appreciate the Committees interest in the vital issue of protecting 
our Medicare program from fraud.  This concludes my testimony.  I would be happy to 
answer your questions.  Thank you. 
 
                                                           
15 MEDIC Benefit Integrity Activities in Medicare Parts C and D, OEI-03-11-00310, January 2013. 
16 Limited Compliance With Medicares Home Health Face-to-Face Documentation Requirements, OEI-01-12-00390, 
April 2014. 
17 CMS Response to Breaches and Medical Identity Theft, OEI-02-10-00040, October 2012.  
14  House Committee on Ways and Means  Subcommittee on Oversight