Testimony of:  
Daniel R. Levinson 
Inspector General  
U.S. Department of Health and Human Services  
______________________________________________________________________________ 
 
Good morning, Chairman Baucus, Ranking Member Hatch, and other distinguished Members of 
the Committee.  Thank you for the opportunity to testify about the Office of Inspector Generals 
(OIG) role in the prevention, investigation, and prosecution of fraud, waste, and abuse in the 
Federal health care programs.   
 
In September 2011, the Department of Health and Human Services (HHS) and the Department of 
Justice (DOJ) announced indictments against 91 defendants, including doctors, nurses, and other 
medical professionals, for their alleged participation in Medicare fraud schemes involving 
approximately $295 million in false billing.  At that time, this coordinated takedown involved the 
highest amount of false Medicare billings in a single takedown in Strike Force history.  My 
testimony provides an inside view of how OIG conducts health care fraud investigations and 
coordinates national Strike Force takedowns. 
 
OIG and Its Partners Are Leading the Fight Against Health Care Fraud 
 
Recordbreaking Recoveries Through the Health Care Fraud and Abuse Control Program  
 
In fiscal fear (FY) 2011, the work of OIG, the Centers for Medicare & Medicaid Services 
(CMS), and DOJ resulted in criminal health care fraud charges against more than 1,430 
defendants, 743 criminal convictions, 977 new investigations of civil health care fraud, and 
recoveries of nearly $4.1 billion in taxpayer dollars.  This is the highest annual amount ever 
recovered from individuals and companies through the Health Care Fraud and Abuse Control 
(HCFAC) Program. 
 
Accomplishments such as this are the result of collaboration and innovation in the fight against 
health care fraud.  HHS-DOJ collaborative efforts are rooted in the HCFAC Program.  The 
HCFAC return-on-investment is at an all-time high.  Over the past 3 years, for every $1 spent on 
the HCFAC Program, the Government has returned an average of $7.20.  From 1997 to 2011, 
HCFAC activities have returned more than $20.6 billion to the Medicare Trust Funds.  In FY 
2011, for the second consecutive year, coordinated interdepartmental anti-fraud efforts have 
resulted in more than $4 billion in recoveries.    
   
The Health Care Fraud Prevention and Enforcement Action Team (HEAT) has been integral to 
these successes.  The HEAT initiative marshals significant resources across the Government to 
prevent health care fraud, waste, and abuse; crack down on those who commit fraud; and 
enhance existing partnerships between HHS and DOJ.  
 
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012  Medicare Fraud Strike Forces Are a Proven Success in Fighting Fraud 
 
Medicare Fraud Strike Force Teams are an essential component of HEAT.1  Strike Force teams 
are designed to identify and investigate fraud and prosecute perpetrators quickly.  Strike Force 
teams are composed of dedicated prosecutors from DOJ and U.S. Attorneys Offices and Special 
Agents from OIG; the Federal Bureau of Investigation (FBI); and, in some cases, State and local 
law enforcement agencies.  These on the ground enforcement teams are supported by data 
analysts and CMS program experts.  This coordination and collaboration has accelerated the 
Governments response to criminal health care fraud, substantially decreasing the average time 
from the start of an investigation to its prosecution. 
 
Strike Force Teams use sophisticated data analysis and a collaborative approach to focus 
enforcement resources in geographic areas at high risk for fraud.  Strike Force cases are data 
driven to pinpoint fraud hot spots through the identification of suspicious billing patterns as they 
occur in real time.  The Strike Force model has proven highly successful.  Since their inception 
in 2007, Strike Force operations in 9 cities have led to charges against more than 1,200 
individuals for fraud schemes involving approximately $3.7 billion in claims.   
 
Case Study: ABC Home Health and Florida Home Health 
The fraud scheme involving ABC Home Health and Florida Home Health (ABC/Florida) 
provides a case study of the investigative underpinnings of Strike Force activities.2  In 
ABC/Florida, more than 50 individuals were convicted in connection with a $25 million fraud 
scheme relating to home health and physical therapy services.  ABC/Florida billed the Medicare 
program for expensive physical therapy and home health services that were not medically 
necessary, were never provided, or both.   
The scheme involved kickbacks and bribes paid to patients, patient recruiters, and doctors.  
Doctors were paid up to $300 per prescription, plan of care, and medical certification for 
medically unnecessary therapy and services.  These providers falsified patient files with 
descriptions of nonexistent medical conditions, such as hand tremors, unsteady gait, and poor 
vision, to make it appear that beneficiaries qualified for home health and therapy services.  
Patients were paid up to $1,500 per month to attest to services that were not medically necessary 
or were never rendered.  Patient recruiters were paid up to $500 per patient to keep patients 
enrolled with the home health agency. 
Initial Phase of the Investigation 
In late 2008, the Miami Strike Force team began investigating ABC/Florida based on a lead from 
a law enforcement source.  The ABC/Florida case, as do most of our Strike Force cases, 
                                                 
1 OIG and DOJ launched their Strike Force efforts in 2007 in south Florida to identify, investigate, and prosecute 
DME suppliers and infusion clinics suspected of Medicare fraud.  Building on the success in Miami, Strike Force 
teams have been established in eight more locationsLos Angeles; Detroit; Houston; Brooklyn; Baton Rouge; 
Tampa; and, most recently, Dallas and Chicago. 
2 Press releases available at  http://www.justice.gov/usao/fls/PressReleases/111206-02.html and 
http://www.justice.gov/usao/fls/PressReleases/110204-03.html.    
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012  followed an investigative model that has proven highly successful in these cases:  (1) analyze 
and evaluate Medicare claims data, (2) obtain the Medicare enrollment application, (3) identify 
the medical biller, (4) obtain and analyze relevant banking information, and (5) identify the 
true owner of the Medicare provider that is under investigation as well as suspected co-
conspirators.  As part of this process, we analyzed Medicare billing data to look for billing 
anomalies, examined bank records for evidence of kickback payments, and interviewed 
witnesses and cooperators with inside information.  Through this process, we developed an 
investigative snapshot of the suspected fraudulent activity. 
 
As part of the investigation, we conducted time analysis reports; for example, a report flagged as 
an indicator of potential fraud might show a home health aide billed for visits to 15 people 3 
times per day.  Analyzing such data could reveal that it is physically impossible to actually 
conduct that many visits because of traffic considerations, complexity of services, and the 
number of hours in the day.  We also learned that different home health agencies were billing for 
the same beneficiariespatient recruiters sometimes shop beneficiaries to different home health 
providers in an attempt to get more money. 
 
We also worked with cooperating medical providers who reviewed the data with the 
investigating agents and helped determine whether billings matched what was actually on patient 
charts.  The investigation revealed falsified patient files and aberrant billing patterns attributable 
to ABC/Florida.  Bank records showed large sums of money transferred to sham companies and 
subsequently turned into cash.   
 
Within about 6 months, we had built a strong enough case to obtain indictments for eight 
subjects, including two owners of ABC/Florida.  These indictments included charges of health 
care fraud, conspiracy to commit health care fraud, kickbacks, and conspiracy to commit money 
laundering.   
 
These indictments are not the end of the story, but rather led to a series of follow-up 
investigations and indictments based on evidence obtained from search warrants executed at 
ABC/Florida and owner Gladys Zambranas home.  Agents discovered incriminating evidence at 
both locations, including payment kickback ledgers and cash payments designated for heath care 
personnel and patient recruiters.  After procuring this evidence, we continued to analyze billing 
data, medical records, financial records, and interviews with cooperators to ferret out co-
conspirators in the fraud.   
 
Simultaneously, we worked with CMS to guard against similar fraud schemes.  ABC/Floridas 
scheme exploited Medicares outlier paymentsadditional payments to home health for 
beneficiaries who incur unusually large costs.  ABC/Florida and its conspirators were claiming 
that beneficiaries were sicker than they really were to cash in on undue outlier payments.  OIG 
took a broader look and found that ABC/Florida was not an isolated case.  In fact, in 2008, 
Miami-Dade County accounted for 52 percent of the $1 billion Medicare paid nationally in home 
health outlier payments, while only 2 percent of all Medicare beneficiaries receiving home health 
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012  services resided there.3  To address these abuses, CMS set a limit on the percentage of outlier 
payments that each home health agency may claim.   
Claims data indicate that these program integrity efforts have had a significant impact.  In 
Miami, Medicares total home health payments dropped by more than a third and its home health 
outlier payments dropped by more than 90 percent from 2009 to 2011. 
As the investigation continued from June 2009 through December 2011, agents secured 
cooperation from ABC/Florida personnel who had been indicted.  Actionable intelligence 
developed from these cooperators revealed that many other home health agencies were engaged 
in frauds similar to ABC/Florida.  
 
This intelligence, coupled with medical record reviews and analysis of financial and billing data, 
helped agents identify additional co-conspirators, which in turn led to supplementary indictments 
in the February 2011 national Strike Force roundup. 
 
As a result of additional intelligence from cooperating witnesses, search warrants were executed 
at Courtesy Medical Center (Courtesy Medical), which was instrumental in perpetuating the 
ongoing fraudthe attending physician (Dr. Dweck) at Courtesy Medical was responsible for 
prescribing home health services for beneficiaries billed by ABC/Florida.  Agents obtained a 
ledger from Courtesy Medical that detailed all the home health agencies that were paying 
kickbacks to Courtesy Medical and Dr. Dweck for home health prescriptions.  The foregoing led 
to additional indictments that were part of the September 2011 national Strike Force takedown.4  
 
September 2011 Takedown 
On September 7, 2011, HHS and DOJ announced a nationwide Strike Force takedown in 8 cities 
resulting in charges against 91 defendants, including doctors, nurses, and other medical 
professionals, for their alleged participation in Medicare fraud schemes involving approximately 
$295 million in false billing.  At that point, this coordinated takedown involved the highest 
amount of false Medicare billings in a single takedown in Strike Force history. 
The schemes included submitting claims to Medicare for treatments that were medically 
unnecessary and often were never provided.  In many cases, patient recruiters, Medicare 
beneficiaries, and other co-conspirators were paid cash kickbacks in return for supplying 
beneficiary information to providers so that the providers could submit fraudulent billing to 
Medicare for services that were medically unnecessary or were never provided.   
In Miami, over 40 defendants, including 1 doctor and 1 nurse, were charged for their 
participation in various fraud schemes involving a total of $159 million in false billings for home 
health care, mental health services, occupational and physical therapy, durable medical 
equipment (DME), and HIV infusion.  In some instances, beneficiaries who were residents of 
halfway houses were allegedly threatened with eviction if they did not agree to attend the mental 
health center. 
                                                 
3 http://oig.hhs.gov/oei/reports/oei-04-08-00570.pdf.  
4 http://www.justice.gov/opa/pr/2011/September/11-ag-1148.html.  
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012  Additional defendants were charged in Houston, Baton Rouge, Los Angeles, Brooklyn, Detroit, 
and Chicago for schemes involving home health and DME.  One defendant allegedly sold 
beneficiary information to 100 different Houston-area home health care agencies in exchange for 
illegal payments. 
Orchestrating a Strike Force Round Up 
 
The September 2011 takedown exemplifies the numerous benefits of conducting large-scale 
operations.  Because of the viral nature of health care fraud, it is more effective to make multiple 
arrests on the same day in particular geographic areas with high volumes of fraud.  Once it 
becomes public that a subject has been arrested, others that may be involved in the criminal 
activity may try to flee to avoid arrest or send their illegal proceeds off-shore.  Executing 
searches and arrests of numerous suspects simultaneously helps law enforcement maintain the 
element of surprise.  In addition, we can save money and increase efficiency when we leverage 
resources from local law enforcement partners in these fraud-intense areas, instead of 
transporting agents from across the country.  Finally, the national recognition given to large-
scale nationwide operations serves as a deterrent. 
 
Once DOJ determines that numerous cases are nearing indictment, senior officials with OIG and 
DOJ coordinate with the Strike Force teams to plan the execution of search and arrest warrants.  
Coordination meetings may begin on weekly basis and ramp up to daily briefings nearing the 
date of a takedown.   
 
Close coordination among the takedown cities is critical.  For example, prior to the September 
2011 operation, subjects of cases worked by the Detroit Strike Force were determined to be 
living in Miami, necessitating coordination between the two Strike Forces.   
 
Senior officials ensure that the Strike Force teams have the necessary tools and appropriate 
number of agents to safely and efficiently carry out the operation.  We may also request 
personnel assistance from other Inspector General (IG) offices, through the Mutual Assistance 
Program, to help execute search and arrest warrants.  During the September 2011 operation, we 
were assisted by 14 agents from IGs of 5 different agencies, including the United States Postal 
Service, the Department of Homeland Security, the Social Security Administration, the 
Department of Transportation, and the Railroad Retirement Board. 
 
The scale of a roundup, i.e., the number of people who will be arrested and the number of search 
warrants executed, evolves throughout the planning process based on investigative case 
developments.   
 
Agents On the Ground 
 
Agents planning large-scale strike force operations are responsible for locating subjects to be 
arrested and verifying where those individuals reside.  This includes researching subjects 
background for criminal history; weapons possession; and other information, such as family 
members that may be encountered during the arrest.  Agents may also conduct surveillance of the 
arrest location.  
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012   
Each lead case agent develops an operational plan, which includes information about the subjects 
to be arrested, including criminal history and background; team assignments; emergency 
information, including the address to the nearest hospital; and detailed information about the 
location where the search and/or arrest warrant will be executed.   
 
Prior to the execution of the operation, the case agent is responsible for securing arrest and/or 
search warrants.  The agent must also coordinate with the U.S. Marshals Service and Pre-Trial 
Services for support with prisoner processing.     
 
The lead case agent also conducts an operational briefing for arrest teams, often the evening prior 
to an operation.  Agent assignments are given during this time on the basis of particular agents 
skill sets and operational needs.  For example, assessments are made regarding the need for 
weapons and tactical support, linguistic skills for witness interviews, and computer forensics.  
This intricate, detailed planning is done to not only ensure a successful operation, but also to 
guarantee the safety of all participants.  
 
On the day of an operation, we typically hold a predawn meeting proximate to the place where 
the warrant will be executed.  During these meetings, agents review information with a focus on 
safety, such as whether arrest subjects have violent criminal histories and whether firearms are 
known to be at the location.   
 
Arrest warrants are often served in conjunction with search warrants.  Evidence seized during an 
operation might include billing ledgers, phone records, receipts, computers, thumb drives, and 
other electronic and nonelectronic evidence.  Criminals are increasingly using technology to 
defraud Medicare.  We have a team of expert computer forensic examiners to seize and analyze 
electronic evidence.   
 
After an arrest, the suspect is processed, which includes taking photographs, taking fingerprints, 
and obtaining basic biographical information.  We may also conduct postarrest interviews to 
obtain additional information related to the alleged scheme.  Once the prisoner is processed, he 
or she appears before a Magistrate for an initial appearance, typically on the same day as the 
arrest.  
 
After the arrest, OIG agents are still on the job providing pretrial support, such as preparing 
witnesses for trial, ensuring that witnesses are available for interviews, reviewing evidence, 
gathering additional evidence, preparing evidence for trial, and ultimately testifying at trial.  
 
Dedicated, Resourceful, and Well-Trained Agents Are the Cornerstone of Every Investigation 
 
Highly specialized and advanced training underpins our successful investigations and operations.  
OIG Special Agents participate in a rigorous 12-week basic training program at the Federal Law 
Enforcement Training Center (FLETC).  That regimen, known as the Criminal Investigator 
Training Program, trains Special Agents in various skills, including interviewing; surveillance; 
undercover operations; criminal case management; legal training; writing and executing search 
and arrest warrants; providing courtroom testimony; physical techniques and conditioning; 
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012  tactical training; firearms skills, vehicle-handling skills; processing physical evidence; and the 
other essential knowledge, skills, and abilities needed by new Special Agents. 
 
Upon completion of FLETC basic training, OIG Special Agents complete 6 weeks of specialized 
training geared toward OIGs health care mission.  OIG is the only agency focusing full time on 
combating fraud, waste, and abuse in Medicare and Medicaid, and OIG Special Agents develop 
extensive subject matter expertise in health care fraud investigations.  This specialized training 
covers, among other things, an indepth education on Medicare and Medicaid, a wide range of 
health care fraud schemes and current trends, medical identity theft, organized criminal activity 
in health care fraud, undercover operations related to health care fraud, and advanced law 
enforcement training in areas such as firearms and defensive tactics.   
 
As OIG continues to encounter more sophisticated and dangerous criminal enterprises in health 
care fraud, OIG Special Agents hone their defensive skills through quarterly firearms and 
defensive tactics training.  Many OIG Special Agents undergo advanced technical training in 
investigative technology, data analysis, advanced tactics, and use of the law enforcement rifle 
system during enforcement operations.  
 
The Future of Fraud Fighting 
 
We are at a turning point in our fight against fraud.  For typical Strike Force cases, we have 
significantly decreased the average time from the start of an investigation to its prosecution.  Our 
specialized training and advanced data analytics have changed the way we investigate cases.  
Historically, we had built cases from the bottom up, investigating individual criminals and 
working our way to the top of the pyramid.  Data analytics now enable us to more quickly 
identify the head of a criminal enterprise from which we can also more swiftly identify the co-
conspirators and related schemes.   
 
With new enforcement tools in the Affordable Care Act, payment suspensions will help ensure 
that the Government can effectively stop perpetrators from absconding with ill-gotten program 
funds.  Important changes to the False Claims Act, the Federal anti-kickback statute, OIGs 
administrative authorities, and the Federal Sentencing Guidelines, among others, will help the 
Government more effectively prosecute those who defraud or abuse Federal health care 
programs.   
 
As we continue to fight fraud in the face of technologically sophisticated criminals, we must 
continually build on our capabilities to maintain our success.  We will utilize our resources to 
develop knowledgeable professionals able to collect and analyze the growing volume of 
computer and other electronic evidence seized during search warrants.  As we confront 
increasing violence and weapons in the field, we will continue to provide our Special Agents the 
training and equipment necessary to ensure their safety.  Finally, we will continue to use data 
analytics to identify the locations and program areas most vulnerable to fraud and allocate our 
resources accordingly.  This strategy has resulted in significant accomplishments, including 
achieving a return on investment of more than $7 to $1 over the past 3 years.    
 
 
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012  Conclusion 
 
Our fraud investigations are one essential tool among many that OIG brings to bear to protect 
HHS programs, beneficiaries, and taxpayers.  OIG employs a comprehensive and holistic 
approach to: 
 
  prevent and detect health care fraud, waste, and abuse; 
  ensure that programs are run efficiently and effectively;  
  promote compliance by health care providers and suppliers;5  and 
  hold accountable those who defraud Medicare or Medicaid.   
 
Through the dedicated efforts of OIG professionals and our collaboration with HHS and DOJ 
partners, we have achieved substantial results in the form of recoveries of stolen and misspent 
funds, enforcement actions taken against fraud perpetrators, improved methods of detecting 
fraud and abuse, and recommendations to remedy program vulnerabilities.6  Finally, we have 
enhanced tools and authorities and have engaged in new initiatives aimed at achieving our 
mission.  Thank you for your support of this mission.   
                                                 
5 More information on OIGs compliance initiatives is available at http://oig.hhs.gov/compliance/.  
6 More information on OIGs program integrity activities can be found in OIGs Semiannual Report to Congress, at 
http://oig.hhs.gov/reports-and-publications/semiannual/index.asp, Compendium of Unimplemented 
Recommendations at http://oig.hhs.gov/reports-and-publications/compendium/2011.asp, Top Management And  
Performance Challenges Identified By Office Of Inspector General at http://oig.hhs.gov/reports-and-
publications/top-challenges/2011/, and the Annual Health Care Fraud and Abuse Control Program Report at 
http://oig.hhs.gov/reports-and-publications/hcfac/index.asp.  
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The United States Senate Committee on Finance  Anatomy of a Fraud Bust: From Investigation to Conviction     
April 24, 2012