U.S. Department of Justice U.S. Department of Health and Human Services
Office of the Attorney General Office of the Secretary
Annual Report of the
Departments of Health and
Human Services and Justice
Health Care Fraud and Abuse 
Control Program FY 2021 The Department of Health and Human Services 
and 
The Department of Justice 
Health Care Fraud and Abuse Control Program 
Annual Report for Fiscal Year 2021 
July 2022   
TABLE OF CONTENTS 
 
   
I.  Executive Summary                    1 
   
II.  Statutory Background                  3 
   
III.  Program Results and Accomplishments              5 
              Monetary Results                   5 
    Expenditures                    7 
    Overall Settlements, Judgments, and Recoveries          8 
    Strike Force                     8  
    Opioid Fraud and Abuse Detection Unit             10 
    Health Care Fraud Prevention and Enforcement Action Team       11 
    Health Care Fraud Prevention Partnership           12 
    COVID-19 Pandemic-Related Enforcement           12 
    Highlights of Significant Criminal and Civil Investigations       14 
 
IV.  Department of Health and Human Services             36 
  Office of Inspector General          36 
  Centers for Medicare & Medicaid Services         61 
  Administration for Community Living             85 
  Office of the General Counsel               89
  Food and Drug Administration Pharmaceutical Fraud Program      93 
 
V.  Department of Justice                 97 
  United States Attorneys       97 
  Civil Division       99 
  Criminal Division      105 
  Civil Rights Division      110 
  Office of the Inspector General      115 
   
VI.  Appendix                    118 
  Federal Bureau of Investigation              118 
  Return on Investment Calculation             123 
  Total Health Care Fraud and Abuse Control Resources       124 
 
VII.  Glossary of Common Terms               125                                                                                     
   
   
  GENERAL NOTE 
 
All years are fiscal years unless otherwise 
stated in the text. 
  EXECUTIVE SUMMARY 
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established a national 
Health Care Fraud and Abuse Control Program (HCFAC or the Program) under the joint 
direction of the Attorney General and the Secretary of the Department of Health and Human 
Services (HHS),1 acting through the Inspector General, designed to coordinate federal, state, and 
local law enforcement activities with respect to health care fraud and abuse.  In its 25th year of 
operation, the Programs continued success confirms the soundness of a collaborative approach 
to identifying and prosecuting the most egregious instances of health care fraud, preventing 
future fraud and abuse, and protecting program beneficiaries. 
During Fiscal Year (FY) 2021, the Federal Government won or negotiated more than $5.0 billion 
in health care fraud judgments and settlements,2 in addition to other health care administrative 
impositions.  Because of these efforts, as well as those of preceding years, almost $1.9 billion 
was returned to the Federal Government or paid to private persons in FY 2021.  Of this $1.9 
billion, the Medicare Trust Funds3 received transfers of approximately $1.2 billion during this 
period, in addition to the almost $98.7 million in Federal Medicaid money that was similarly 
transferred separately to the Centers for Medicare & Medicaid Services due to these efforts.  
Enforcement Actions 
In FY 2021, the Department of Justice (DOJ) opened 831 new criminal health care fraud 
investigations.  Federal prosecutors filed criminal charges in 462 cases involving 741 defendants.  
A total of 312 defendants were convicted of health care fraud related crimes during the year.  
Also, in FY 2021, DOJ opened 805 new civil health care fraud investigations and had 1,432 civil 
health care fraud matters pending at the end of the fiscal year.  Federal Bureau of Investigation 
(FBI) investigative efforts resulted in over 559 operational disruptions of criminal fraud 
organizations and the dismantlement of the criminal hierarchy of more than 107 health care fraud 
criminal enterprises.  
In FY 2021, investigations conducted by HHSs Office of Inspector General (HHS-OIG) resulted 
in 504 criminal actions against individuals or entities that engaged in crimes related to Medicare 
and Medicaid, and 669 civil actions, which include false claims and unjust-enrichment lawsuits 
filed in federal district court, and civil monetary penalty (CMP) settlements.  HHS-OIG also 
excluded 1,689 individuals and entities from participation in Medicare, Medicaid, and other 
federal health care programs.  Among these were exclusions based on criminal convictions for 
crimes related to Medicare and Medicaid (569) or to other health care programs (267), for 
beneficiary abuse or neglect (145), and as a result of state health care licensure revocations 
(536).   
1 Hereafter, referred to as the Secretary. 
2 The amount reported as won or negotiated only reflects the federal settlements and judgments and therefore does 
not reflect state Medicaid monies won or negotiated as part of any global federal-state settlements. 
3 The Medicare Trust Funds is the collective term for the Medicare Hospital Insurance (Part A) Trust Fund and the 
Supplemental Medical Insurance (Part B) Trust Fund. 
1  Sequestration Impact 
Sequestration of mandatory funding generally results in DOJ, FBI, HHS, and HHS-OIG having 
fewer resources to fight fraud and abuse of Medicare, Medicaid, and other health care programs.  
Due to sequester suspension, no funds were sequestered from the HCFAC program in FY 2021.4  
However, a combined total of $150.6 million in mandatory funds have been sequestered in the 
past nine years.  Including funds sequestered from the FBI ($70.0 million in the past nine years), 
$220.6 million has been sequestered from mandatory HCFAC funds since FY 2013. 
4 Section 3709 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Public Law (P.L.) 116-
136) suspended Medicare sequestration from May 1, 2020, through December 31, 2020; the Consolidated 
Appropriations Act, 2021 (P.L. 116-260) extended this suspension to March 31, 2021; the Medicare sequester 
moratorium included in P.L. 117-7 extended the suspension again until December 31, 2021.  This sequester 
adjustment was meant to provide an economic boost to Medicare providers treating patients during the COVID-19
public health emergency (PHE) and has resulted in additional funding for the HCFAC program.  The three bills 
overlap to cover the entirety of FY 2021.  The FY 2022 sequester amount will reflect a pro-rated period from 
October 1, 2021, to December 31, 2021.
2  STATUTORY BACKGROUND
The Annual Report of the Attorney General and the Secretary detailing expenditures and 
revenues under the Health Care Fraud and Abuse Control Program for FY 2021 is provided as 
required by Section 1817(k)(5) of the Social Security Act.  
The Social Security Act Section 1128C(a), as established by HIPAA (P.L. 104-191, or the Act), 
created the Health Care Fraud and Abuse Control Program, a far-reaching program to combat 
fraud and abuse in health care, including both public and private health plans.   
As was the case before HIPAA, amounts paid to Medicare in restitution or for compensatory 
damages must be deposited in the Medicare Trust Funds.  The Act requires that an amount 
equaling recoveries from health care investigations  including criminal fines, forfeitures, civil 
settlements and judgments, and administrative penalties  also be deposited in the Trust Funds. 
The Act appropriates monies from the Medicare Hospital Insurance Trust Fund to an expenditure 
account, called the Health Care Fraud and Abuse Control Account (the Account), in amounts that 
the Secretary and Attorney General jointly certify as necessary to finance anti-fraud activities.  
The maximum amounts available for certification are specified in the Act.  Certain portions of 
these sums are to be used only for activities of the HHS-OIG, with respect to the Medicare and 
Medicaid programs.  In FY 2006, the Tax Relief and Health Care Act (TRHCA) (P.L 109-432, 
303) amended the Act so that funds allotted from the Account are available until expended.
TRHCA also allowed for yearly increases to the Account based on the change in the consumer
price index for all urban consumers (all items, United States city average) (CPI-U) over the
previous fiscal year for fiscal years 2007 through 2010.5  In FY 2010, the Patient Protection and
Affordable Care Act, as amended by the Health Care and Education Reconciliation Act,
collectively referred to as the Affordable Care Act (P.L. 111-148, ACA) extended permanently
the yearly increases to the Account based upon the change in the consumer price index for all
urban consumers, or CPI-U.
In FY 2021, the Secretary and the Attorney General certified $321.6 million in mandatory 
funding to the Account.  (This reflects sequester suspension per footnote four.)  Additionally, 
Congress appropriated $807.0 million in discretionary funding.  A detailed breakdown of the 
allocation of these funds is set forth later in this report.  HCFAC appropriations generally 
supplement the direct appropriations of HHS that are devoted to health care fraud enforcement 
and have supported almost three-fourths of DOJs health care fraud funding and over three-
fourths of HHS-OIGs appropriated budget in FY 2021.  (Separately, the FBI, which is discussed 
in the Appendix, received $152.4 million from HIPAA, after accounting for sequester 
suspension).  Under the joint direction of the Attorney General and the Secretary, the Programs 
goals are: 
5 The CPI-U adjustment in TRHCA did not apply to the Medicare Integrity Program (MIP).  Section 6402 of the 
ACA indexed Medicare Integrity Program funding to inflation starting in FY 2010. 
3  (1) To coordinate federal, state, and local law enforcement efforts relating to health care
fraud and abuse with respect to health plans;
(2) To conduct investigations, audits, inspections, and evaluations relating to the delivery of
and payment for health care in the United States;
(3) To facilitate enforcement of all applicable remedies for such fraud; and
(4) To provide education and guidance regarding complying with current health care law.
Additionally, the Act requires the Attorney General and the Secretary to submit a joint annual 
report to the Congress that identifies both: 
(1) The amounts appropriated to the Trust Funds for the previous fiscal year under various
categories and the source of such amounts; and
(2) The amounts appropriated from the Trust Funds for such year for use by the Attorney
General and the Secretary and the justification for the expenditure of such amounts.
This annual report fulfills the above statutory requirements.  
Finally, this report fulfills the requirement in the annual discretionary HCFAC appropriation 
(P.L.116-260, Consolidated Appropriations Act, 2021) that this report include measures of the 
operational efficiency and impact on fraud, waste, and abuse in the Medicare, Medicaid, and 
CHIP programs for the funds provided by this appropriation. 
4  PROGRAM RESULTS AND ACCOMPLISHMENTS 
As required by the Act, HHS and DOJ must detail in this Annual Report the amounts deposited 
to the Medicare Trust Funds and the source of such deposits.  In FY 2021, about $1.9 billion was 
deposited with the Department of the Treasury (Treasury) and Centers for Medicare & Medicaid 
Services (CMS), transferred to other federal agencies administering health care programs, or paid 
to private persons during the fiscal year.  Monetary results from these transfers and deposits are 
provided in the table below:  
Monetary Results:  Total Transfers / Deposits by Recipient FY 2021 
Department of the Treasury 
  Deposits to the Medicare Trust Fund, as required by HIPAA: 
  Gifts and Bequests  $176 
  Amount Equal to Criminal Fines        67,452,798 
  Civil Monetary Penalties        69,317,338 
  Asset Forfeiture      134,782,877 
  Penalties and Multiple Damages      385,310,565 
        Subtotal  $656,863,753 
Centers for Medicare & Medicaid Services 
 HHS/OIG Audit Disallowances:  RecoveredMedicare        68,794,312 
 Restitution/Compensatory Damages*      482,322,344 
  Subtotal  $551,116,656 
Total Transferred to the Medicare Trust Funds  $1,207,980,409 
Restitution/Compensatory Damages to Federal Agencies 
 TRICARE  $39,348,018 
 HHS/OIG    10,345,715 
 Office of Personnel Management    9,638,816 
U.S Postal Service   1,518,076 
DOJ/Drug Enforcement Administration  875,324 
Other Agencies   1,731,350 
        Subtotal   $63,457,299 
Centers for Medicare & Medicaid Services 
 Federal Share of Medicaid        98,664,671 
 HHS/OIG Audit Disallowances:  RecoveredMedicaid      295,874,233 
  Subtotal  $394,538,904 
Total  $457,996,203 
Relators' Payments**  $193,043,816 
GRAND TOTAL MONETARY RESULTS***  $1,859,020,428 
*Restitution, compensatory damages, and recovered audit disallowances include returns to both the Medicare 
Hospital Insurance (Part A) Trust Fund and the Supplemental Medical Insurance (Part B) Trust Fund.
**These are funds awarded to private persons who file suits on behalf of the Federal Government under the qui tam
(whistleblower) provisions of the False Claims Act, 31 U.S.C.  3730(b).
***State funds are also collected on behalf of state Medicaid programs; only the federal share of Medicaid funds 
transferred to CMS are represented here.
5   
The above transfers include certain collections, or amounts equal to certain collections, required 
by HIPAA to be deposited directly into the Medicare Trust Funds.  These amounts include: 
 
(1) Gifts and bequests made unconditionally to the Trust Funds, for the benefit of the 
Account or any activity financed through the Account; 
 
(2) Criminal fines recovered in cases involving a federal health care offense, including 
collections under section 24(a) of Title 18, United States Code (relating to health care 
fraud); 
 
(3) Civil monetary penalties in cases involving a federal health care offense; 
 
(4) Amounts resulting from the forfeiture of property by reason of a federal health care 
offense, including collections under section 982(a)(7) of Title 18, United States Code; 
and 
 
(5) Penalties and damages obtained and otherwise creditable to miscellaneous receipts of the 
general fund of the Treasury obtained under sections 3729 through 3733 of Title 31, 
United States Code (known as the False Claims Act, or FCA), in cases involving claims 
related to the provision of health care items and services (other than funds awarded to a 
relator, for restitution, or otherwise authorized by law). 
 
6 
   
Expenditures 
In the 25th year of operation, the Secretary and the Attorney General certified $321.6 million in 
mandatory funding as necessary for the Program, after accounting for mandatory sequester 
suspension as required by Public Law (P.L.) 116-136, P.L. 116-260, and P.L. 117-7.  In addition, 
Congress appropriated $807.0 million in discretionary funding.  Allocation by recipient is below: 
 
FY 2021 ALLOCATION OF HCFAC APPROPRIATION 
Mandatory  Discretionary  Funds  Total  
  
Allocation6  Allocation  Sequestered7  Allocation 
Department of Health and Human Services             
Office of Inspector General  $236,181,692   $99,000,000   $0   $335,181,692  
Office of the General Counsel  7,427,491  0  0  7,427,491 
Administration for Community Living  2,000,000  20,000,000  0  22,000,000 
Food and Drug Administration  6,185,790  0  0  6,185,790 
Centers for Medicare & Medicaid Services  0  596,000,000  0  596,000,000 
Assistant Secretary for Planning and 
3,000,000 
Evaluation  3,000,000  0  0 
Unallocated Funding  0  0  0  0 
   Subtotal  $254,794,973   $715,000,000   $0   $969,794,973  
              
Department of Justice             
United States Attorneys  $32,425,000   $31,064,440   $0   $63,489,440  
Civil Division8  18,308,481  27,203,412  0  45,511,893  
Criminal Division  12,534,604  21,860,434  0  34,395,038  
Civil Rights Division  3,200,000  3,656,817  0  6,856,817  
Justice Management Division  313,200  0  0  313,200  
Federal Bureau of Investigation  0  6,824,172  0  6,824,172  
Office of the Inspector General  0  1,390,725  0  1,390,725  
Unallocated Funding  0  0  0   0  
   Subtotal  $66,781,285   $92,000,000   $0   $158,781,285  
TOTAL  $321,576,258   $807,000,000   $0   $1,128,576,258  
 
 
   
 
6 As of FY 2007, mandatory funds are available until expended.  Discretionary funds are available for two years. 
7 No funds were sequestered in FY 2021 due to mandatory sequester suspension. 
8 The Elder Justice Initiative, managed by the Civil Division, is included in the Civil Division figures.   
 
7 
  Overall Settlements, Judgments, and Recoveries 
During the fiscal year, the Federal Government won or negotiated more than $5.0 billion in 
judgments and settlements and attained additional administrative impositions in health care fraud 
cases and proceedings.9  Because of these efforts, as well as those of preceding years, almost 
$1.9 billion was returned to the Federal Government or private persons.  Of this $1.9 billion, the 
Medicare Trust Funds received transfers of approximately $1.2 billion during this period; 
approximately $98.7 million in federal Medicaid money was transferred to the Centers for 
Medicare & Medicaid Services separately due to these efforts.10 
In addition to these enforcement actions, numerous audits, evaluations, and other coordinated 
efforts yielded recoveries of overpaid funds and prompted changes in federal health care 
programs that reduce vulnerability to fraud.  
The return on investment (ROI) for the HCFAC program over the last three years (20192021) is 
$4.00 returned for every $1.00 expended.  Because the annual ROI can vary from year to year 
depending on the number and type of cases that are settled or adjudicated during that year, DOJ 
and HHS use a three-year rolling average ROI for results contained in the report.  Additional 
information on how the ROI is calculated may be found in the Appendix. 
It is important to note that the ROI does not capture the full impact of the results of the Program.  
Civil and criminal enforcement that stops ongoing fraud saves the Program from future losses.  
Even actions that do not result in recoveries, for example, a search warrant, an indictment, or an 
arrest, may prevent the defendant from continuing to defraud federal health care programs.  
Therefore, this ROI calculation relies on actual recoveries and collections, and does not represent 
the effect of preventing future fraudulent payments.  Further, the threat of oversight alone can 
have a sentinel impact that deters future bad actors from defrauding Medicaid, Medicare, and 
other federal health care benefit programs.  
Strike Force  
Health Care Fraud Strike Force Teams (Strike Force) harness data analytics and the combined 
resources of federal, state, and local law enforcement entities to prosecute complex health care 
fraud matters and prescription opioid distribution and diversion schemes.  The Strike Force is 
comprised of inter-agency teams made up of investigators and prosecutors that focus on the 
worst offenders in regions with the highest known concentration of fraudulent activities.  The 
Strike Force uses advanced data analysis techniques to identify aberrant billing levels in health 
care fraud hot spotscities with high levels of billing fraudand target suspicious billing 
patterns, as well as emerging schemes and schemes that migrate from one community to another.  
9 The amount reported as won or negotiated only reflects the federal settlements and judgments and therefore does 
not reflect state Medicaid monies won or negotiated as part of any global federal-state settlement. 
10 Note that some of the judgments, settlements, and administrative actions that occurred in FY 2021 will result in 
transfers in future years, just as some of the transfers in FY 2021 are attributable to actions from prior years. 
8   
First established in March 2007, Strike Force teams currently operate in 24 districts across the 
United States, including, but not limited to:  Los Angeles, California; Miami and 
Tampa/Orlando, Florida; Chicago, Illinois; Ft. Mitchell, Kentucky; Baton Rouge and New 
Orleans, Louisiana; Detroit, Michigan; Brooklyn, New York; Newark, New Jersey / 
Philadelphia, Pennsylvania; Nashville, Tennessee; and Houston, San Antonio, and Dallas, Texas; 
along with the National Rapid Response Strike Force (NRRSF) located in Washington, D.C.     
 
The NRRSF was established in September 2020.  It is comprised of dedicated prosecutors who 
target large-scale and multi-jurisdictional schemes occurring across the country.  Since its 
creation, the NRRSF has organized and led several of the Criminal Division, Fraud Sections 
Health Care Fraud Units (HCF Unit) nationwide initiatives involving billions of dollars of fraud 
and pressing national priorities, including the telemedicine and sober homes components of the 
2020 National Health Care Fraud Takedown and the 2021 National Health Care Fraud 
Enforcement Action.  
 
The NRRSF also has led the Departments efforts to combat health care fraud arising from the 
COVID-19 pandemic.  The NRRSF leads the COVID-19 Working Group, which is chaired by 
the Criminal Divisions HCF Unit, and comprised of leadership from over 10 key government 
agencies, including Food and Drug Administration (FDA), HHS, CMS, the Small Business 
Administration (SBA), the Department of Veterans Affairs (VA), FBI, the Drug Enforcement 
Administration (DEA), and Homeland Security Investigations (HSI), among others.  The purpose 
of the Working Group is to identify, investigate, and prosecute COVID-19 health care fraud 
schemes, and enable coordination, deconfliction, and efficient staffing of COVID-19 health care 
fraud investigations.  One example is the 2021 COVID-19 Health Care Fraud Enforcement 
Action, which resulted in charges against 14 defendants in seven federal districts across the 
United States for their alleged participation in various health care fraud schemes that exploited 
the COVID-19 pandemic and resulted in over $143.0 million in false billings. 
 
Each Strike Force team brings the investigative and analytic resources of the FBI, HHS-OIG, the 
CMS Center for Program Integrity (CMS-CPI), the Defense Criminal Investigative Service 
(DCIS), the Federal Deposit Insurance Corporation Office of the Inspector General (FDIC-OIG), 
the Internal Revenue Service (IRS), and other agencies, together with the prosecutorial resources 
of the Criminal Divisions Fraud Section and the U.S. Attorneys Offices (USAOs) to bring 
cases in federal district court.  During FY 2021, Strike Force accomplishments in the areas noted 
above, as well as USAO accomplishments included:11 
 
  Filing 281 indictments, criminal informations and complaints involving charges against 
444 defendants who allegedly collectively billed federal health care programs and private 
insurers approximately $1.7 billion12;  
  Obtaining 288 guilty pleas and litigating 23 jury trials, with guilty verdicts against 21 
defendants; and 
 
11 The summary statistics in this document exclude sealed cases. 
12 This alleged loss amount figure only reflects the amounts of alleged loss in cases handled by the Criminal 
Division, Fraud Section. 
 
9 
   
  Securing imprisonment for 175 defendants sentenced, with an average sentence of over 
49 months. 
 
Since its inception, Strike Force prosecutors and USAOs in Strike Force districts filed more than 
2,400 cases charging more than 5,000 defendants who collectively billed federal health care 
programs and private insurers approximately $24.7 billion, more than 3,300 defendants pled 
guilty and over 400 others were convicted in jury trials, and more than 400 defendants were 
sentenced to imprisonment for an average term of approximately 49 months.   Medicare payment 
trends demonstrate the positive impact of Strike Force enforcement and prevention efforts. 
 
On September 17, 2021, the Criminal Divisions Health Care Fraud Unit coordinated the Health 
Care Fraud National Enforcement Action, in collaboration with USAOs, HHS-OIG, FBI, the 
DEA, and other federal and state partners.  Assistant Attorney General Kenneth A. Polite Jr. 
announced criminal charges against 138 defendants, including 42 doctors, nurses, and other 
licensed medical professionals, charged between August 1 and September 17, 2021, in 31 federal 
districts across the United States, for their alleged participation in various health care fraud 
schemes that resulted in approximately $1.4 billion in alleged losses.  The charges targeted 
approximately $1.1 billion in fraud committed using telemedicine (the use of telecommuni-
cations technology to provide health care services remotely), $29.0 million in COVID-19 health 
care fraud, $133.0 million connected to substance use treatment facilities, or sober homes, and 
$160.0 million connected to other health care fraud and illegal opioid distribution schemes across 
the country.  The charges announced as part of the 2021 National Enforcement Action continued 
to send a clear deterrent message about the Departments ongoing commitment to ensuring the 
safety of patients and the integrity of health care benefit programs, even amid the continued 
COVID-19 pandemic. 
 
In an initial April 2019 surge, and a second takedown in September 2019, Trial Attorneys in the 
Fraud Section, in conjunction with Assistant United States Attorneys (AUSAs) in more than 10 
federal districts,13 charged 73 individuals, including 64 medical professionals, with opioid-
related crimes.  Another 10 defendants were charged in FY 2021, including six medical 
professionals.  As of September 30, 2021, 55 of the Appalachian Regional Prescription Opioid 
Strike Force (ARPO) defendants have entered guilty pleas, with more pleas scheduled.  Four 
additional defendants have been convicted at trial, including one two-week trial in West Virginia 
that took place during the continued COVID-19 pandemic in May 2021.  Twenty-one ARPO 
defendants were sentenced in FY 2021.   
 
Opioid Fraud and Abuse Detection Unit 
 
The Opioid Fraud and Abuse Detection Unit (OFAD) AUSA program focuses specifically on 
opioid-related health care fraud using data to identify and prosecute individuals that are 
contributing to the prescription opioid epidemic.  In FY 2021, OFAD AUSAs handled a variety 
of investigations and prosecutions involving medical professionals.  OFAD attorneys filed 37  
 
 
13 Two non-ARPO districts also participated in the 2019 surge, bringing the district total to 12.   
 
10 
   
cases, against 90 defendants, alleging various charges including health care fraud, drug 
trafficking, and money laundering.   
 
Health Care Fraud Prevention and Enforcement Action Team (HEAT) 
 
The Attorney General and the Secretary maintain regular consultation at both senior and staff 
levels to accomplish the goals of the HCFAC Program.  The DOJ and HHS-OIG established the 
Health Care Fraud Prevention and Enforcement Action Team (HEAT) in 2009 to build and 
strengthen existing programs combatting Medicare fraud, while investing new resources and 
technology to prevent and detect fraud and abuse.  HEAT expanded the DOJ-HHS Health Care 
Fraud Strike Force program noted above, which targets emerging or migrating fraud schemes, to 
include fraud by criminals masquerading as health care providers or suppliers.  The mission of 
HEAT is: 
 
  To marshal significant resources across government to prevent waste, fraud and 
abuse in the Medicare and Medicaid programs and crack down on the fraud 
perpetrators who are abusing the system and costing the government billions of dollars. 
 
  To reduce health care costs and improve the quality of care by ridding the system of 
perpetrators who are preying on Medicare and Medicaid beneficiaries. 
 
  To target doctors and physicians who prescribe opioids outside the scope of 
legitimate medical practice and often charge Medicare and/or Medicaid for these visits 
and prescriptions.   
 
  To highlight best practices by providers and public sector employees who are 
dedicated to ending waste, fraud, and abuse in Medicare. 
 
  To build upon existing partnerships between DOJ and HHS, such as its Strike Force 
Teams, to reduce fraud and recover taxpayer dollars. 
 
Since its creation, HEAT has focused on key areas for coordination and improvement.  HEAT 
members are working to identify new enforcement initiatives and areas for increased oversight 
and prevention.  HEAT activities have also expanded to include significant involvement from 
Medicaid Fraud Control Units (MFCUs), which play a critical role in the many fraud cases 
involving both Medicare and Medicaid.  For example, eight MFCUs participated in the National 
Health Care Fraud Enforcement Action in September 2021. 
 
The DOJ and HHS have expanded data-sharing and improved information-sharing procedures in 
order to get critical data and information into the hands of law enforcement to track patterns of 
fraud and abuse and increase efficiency in investigating and prosecuting complex health care 
fraud cases.  This expanded data sharing enables the DOJ and HHS to efficiently identify and 
target the worst actors in the system.  The Departments established a cross-government health 
care fraud data intelligence sharing workgroup to share fraud trends, new initiatives, ideas, and 
success stories to improve awareness across issues relating to health care fraud.  
 
 
11 
   
Both Departments also have developed training programs to prevent honest mistakes and help 
stop potential fraud before it happens.  This includes CMS compliance training for providers, 
HHS-OIG compliance program guidance documents and trainings for providers, ongoing 
meetings at USAOs with the public and private sector, and increased efforts by HHS to educate 
specific groupsincluding elderly and immigrant communitiesto help protect them.  
Moreover, HHS-OIG offers a Compliance Resource Portal on its website, which includes 
special fraud alerts, videos, and other resources directed at various segments of the health care 
industry.  In addition, DOJ conducts, with the support of HHS, a Health Care Fraud training 
program designed to teach the Strike Force concept and case model to prosecutors, law 
enforcement agents, and administrative support teams.   
 
Health Care Fraud Prevention Partnership (HFPP) 
 
The HFPP is a voluntary public-private partnership among the Federal Government, state 
agencies, law enforcement, private health insurance plans, employer organizations, and health 
care anti-fraud associations.  The purpose of the partnership is to exchange data and information 
between the partners to help improve capabilities to fight fraud, waste, and abuse in the health 
care industry.  The number of participants has increased to 222 public, private, and state partner 
organizations at the end of FY 2021.  Collectively, these organizations represent more than 218 
million covered lives, equivalent to more than three in four insured Americans.  Sixty-six of the 
current partners are actively submitting claim level data representing more than 104 million 
individuals, or more than one in three insured Americans.   
 
The HFPP commenced or completed studies using multiple partners data to address fraud, 
waste, and abuse in FY 2021, providing partners with detailed results that can be used for 
corrective actions within their organizations.  The HFPP continued its efforts to foster 
collaboration among partners by hosting virtual information-sharing sessions (due to the Public 
Health Emergency) and initiating a new Executive Board which will meet quarterly.  These 
meetings are used to share fraud schemes and provider alerts, provide updates on law 
enforcement activities, and strategize on how to broaden the HFPPs impact in the private and 
public sectors.  See the CMS HFPP section for more information on HFPP activities. 
 
COVID-19 Pandemic-Related Enforcement 
Since the start of the COVID-19 Public Health Emergency (PHE) in March 2020, CMS has 
examined how the PHEand more specifically, the waivers and flexibilities offered by the 
Agencymay create new fraud risks in federal health programs.  CMS has developed a robust 
fraud risk assessment process, using principles outlined in the Government Accountability Office 
Fraud Risk Management Framework, to identify potential risks and vulnerabilities associated 
with PHE and potential unintended consequences of the waivers and flexibilities.  Fraud, waste, 
and abuse mitigation strategies include data analyses and studies, targeted investigations, 
development of Fraud Prevention System (FPS) models and edits, and implementation of new 
policies.  CMS, DOJ, HHS-OIG, and other law enforcement agency partners are working  
 
 
12 
   
together to investigate and prosecute frauds from identified risks and related schemes.  Examples 
of potential risks and vulnerabilities include: 
  Additional, unnecessary services:  Offering COVID-19 tests to Medicare beneficiaries in 
exchange for personal details, including Medicare information, when the services are 
unapproved and illegitimate.  Fraudsters are targeting beneficiaries in a number of ways, 
including telehealth for Evaluation and Management up-coding or services not rendered, 
telemarketing calls, text messages, social media platforms, and door-to-door visits.  
These scammers exploit the pandemic to benefit themselves, and beneficiaries face 
potential harms.  Telemedicineusing telecommunications technology to provide care 
remotelyhas been used to facilitate fraud schemes for unnecessary services.  The 
personal information collected can be used to fraudulently bill federal health care 
programs and commit medical identity theft.  If Medicare or Medicaid denies the claim 
for an unapproved test, the beneficiary could be responsible for the cost. 
 
  Unnecessary laboratory testing:  Performing additional tests when conducting COVID-19 
tests, such as expensive tests or services that may or may not be related to COVID-
19.  For example, some laboratories are billing a COVID-19 test with other far more 
expensive tests, such as Respiratory Pathogen Panels (RPP), which test for a variety of 
respiratory infections along with COVID-19, and antibiotic resistance tests.  Other 
potentially unnecessary tests being billed along with COVID-19 tests include allergy, 
genetic and cardiac panel testing.  Some laboratories are also billing respiratory, 
gastrointestinal, genitourinary, and dermatologic pathogen code tests.  
 
  Health care technology schemes:  False and fraudulent representations about COVID-19 
testing, treatments, or cures that are used to defraud federal health programs.  
 
  Fraudulently obtaining COVID-19 health care relief funds:  Filing false claims and 
applications for federal relief funds, such as those provided under the Coronavirus Aid, 
Relief, and Economic Security (CARES) Acts Provider Relief Fund, the Paycheck 
Protection Program and Health Care Enhancement Act, or the Economic Impact Disaster 
Loan (EIDL) program.  
   
 
13 
   
Highlights of Significant Criminal and Civil Investigations 
 
Our respective Departments successfully pursued Strike Force matters, as well as other criminal 
and civil investigations in a wide range of areas.  Cases are organized by type and presented in 
chronological order.  Strike Force cases are denoted by (SF) before the lead sentence.  
 
Ambulance and Transportation Services  
 
In December 2020, the owner of a New York based ambulance company (owner) was sentenced 
to 24 months of prison, followed by 24 months probation, and ordered to pay restitution in the 
amount of $10,650,670.  The owner pled guilty to one count of conspiracy to offer and pay 
health care kickbacks, and one count of conspiracy to defraud the lawful functions of the Internal 
Revenue Service.  The owner and his father paid more than $8.6 million in kickbacks to co-
conspirator companies not enrolled in the states Medicaid program for the referral of 
beneficiaries recruited by those co-conspirators, so that the ambulance company (company) 
could falsely bill Medicaid as if the company had transported those beneficiaries to various 
clinics in Brooklyn and Queens.  The defendants then falsely reported to the IRS that the illegal 
kickback payments were legitimate business expenses, thereby under-reporting business income 
and claiming false deductions. 
 
Clinics 
 
In October 2020, after a two-day sentencing hearing, the owner of multiple health care clinics 
and medical research companies in Richland, Washington, was sentenced to 340 months 
imprisonment, over $1.9 million in restitution, and over $5.6 million in criminal forfeiture.  The 
sentencing followed a three-week jury trial in November 2019 in which the defendant was 
convicted on 47 counts of fraud, conspiracy, and controlled substance offenses in connection 
with his falsification of human clinical research trial data and fraudulent obtaining and 
dispensing of opioids, including hydrocodone and morphine.  Evidence during trial and at 
sentencing demonstrated that the defendant not only falsified data from dozens of studies of 
experimental medications designed to treat diabetes, heart disease, drug addiction, and other 
medical conditions, but falsely posed as a medical doctor in order to convince real patients to 
participate in his fraudulent trials, putting them at significant risk because their participation was 
not being appropriately monitored by a licensed medical professional.  The evidence at trial and 
at sentencing further demonstrated that the defendant waged a campaign of threats, retaliation, 
intimidation, and harassment in order to keep his scheme from coming to light, and that the 
defendant and his companies, which were also convicted, received over $5.6 million from the 
fraud.  In sentencing the defendant to the longest-ever sentence for health care fraud in the 
Eastern District of Washington, the court noted the serious risk of grave harm to the public 
created by the defendant, both to his research patients as well as to the general public, given that 
the fraudulent and corrupted research data was intended to be submitted to the U.S. Food and 
Drug Administration to make approval decisions about experimental medications.    
 
In October 2020, a pain clinic co-owner who operated several pill mills in Tennessee and Florida 
was sentenced to more than 33 years and ordered to forfeit $3.6 million in the Eastern District of 
 
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Tennessee. Then in December 2020, three pain clinic nurse practitioners were sentenced to 
prison terms ranging from 30 to 42 months for maintaining a drug-involved premises.  The clinic 
co-owner and the three nurse practitioners had been convicted following a three-month trial for 
their roles in the operation of four separate pain clinics.  The trial evidence showed that they 
operated the pain clinics as pill mills inviting abuse by providers, employees, customers, and 
drug traffickers with awareness that patients travelled long distances to illegally obtain controlled 
substances and requested prescriptions for large quantities of Schedule II Controlled Substances.  
The clinics distributed over 11 million tablets of oxycodone, oxymorphone, and morphine that 
generated over $21.0 million in clinic revenue, with a street value of $360.0 million.  
 
(SF) In May 2021, the owner and operator of a purported medical clinic (clinic) in Texas was 
sentenced to 25 years in prison and ordered to pay $250,000 in restitution for participating in an 
$11.0 million Medicare fraud scheme in which fraudulent medical documents were sold to 
home-health agencies in and around Houston.  According to the evidence presented at trial, from 
October 2012 through August 2015, the owner and others conspired to defraud Medicare by 
selling Plans of Care and other medical documents signed by a doctor, through the clinic to 
various home-health services, resulting in approximately $11.0 million in false and fraudulent 
claims for home-health services billed to Medicare.  The evidence at trial showed that home-
health agencies billed Medicare for home health services that were not medically necessary and, 
in many instances, not provided. 
 
Diagnostic Testing 
 
In July 2021, national electroencephalography (EEG) testing company Alliance Family of 
Companies LLC (Alliance) and private investment company Ancor Holdings LP (Ancor), both 
based in Texas, agreed to pay more than $14.8 million combined to resolve civil FCA allegations 
that kickbacks and other misconduct resulted in the submission of false claims to federal health 
care programs.  The settlement resolved allegations that Alliance induced physicians to order the 
companys EEG testing by providing kickbacks in the form of free EEG test-interpretation 
reports, thereby enabling primary care physicians who were not neurologists to bill the 
government as if they had interpreted the tests, and that Alliance used an inaccurate billing code 
for certain EEG testing to generate higher reimbursements and billed for a specialized digital 
analysis that it did not actually perform.  The settlement also resolved allegations that Ancor 
learned of the kickbacks based on due diligence it performed prior to investing in Alliance and 
then caused false claims by allowing that conduct to continue once it entered into an agreement 
to manage Alliance.  In addition to the federal recovery, Alliance and Ancor agreed to pay more 
than $540,000 combined to resolve state Medicaid claims.  In connection with the settlement, 
Alliance entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG. 
 
Drug Companies 
 
In October 2020, certain individual members of the Sackler family who were shareholders and 
board members of opioid manufacturer Purdue Pharma LP (Purdue) agreed to pay $225.0 million 
to resolve civil FCA allegations that from 2013 to 2018, the individuals caused false and/or 
fraudulent claims for its opioid products OxyContin and Hysingla to be submitted to federal 
 
15 
   
health care programs.  The settlement resolved allegations that, in 2012, the individuals knew 
that the legitimate market for Purdues opioids had contracted, but they nevertheless requested 
that Purdue executives recapture lost sales and increase Purdues share of the opioid market.  As 
part of this strategy, shortly after the end of Purdues CIA in 2013, the individuals approved a 
new marketing program through which Purdue sales representatives intensified their marketing 
of OxyContin to extreme, high-volume prescribers, causing health care providers to prescribe 
opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to 
abuse and diversion.  The settlement further resolved allegations that from approximately 2008 
to 2018, at the individual family members request, Purdue transferred assets into family holding 
companies and trusts that were made to hinder future creditors, and/or were otherwise voidable 
as fraudulent transfers. 
 
In November 2020, opioid company Purdue Pharma LP pled guilty in the District of New Jersey 
to three felony offenses:  one count of a dual-object conspiracy to defraud the United States and 
to violate the Food, Drug and Cosmetic Act (FDCA), and two counts of conspiracy to violate the 
Federal Anti-Kickback Statute (AKS).  With respect to the first count, Purdue admitted that it 
conspired to defraud the United States by impeding the lawful function of the DEA by 
representing that Purdue maintained an effective anti-diversion program when, in fact, Purdue 
continued to market its opioid products to health care providers whom the company had good 
reason to believe were diverting opioids, and by reporting misleading information to the DEA to 
boost Purdues manufacturing quotas.  With respect to the AKS counts, Purdue admitted that 
between June 2009 and March 2017, Purdue made payments to two doctors through Purdues 
speaker program to induce those doctors to write more prescriptions, and from April 2016 
through December 2016, Purdue paid electronic health records developer Practice Fusion Inc. 
nearly $1.0 million in exchange for creating and installing a prompt in its software with the 
intent to cause doctors to refer, recommend, and arrange for the ordering of Purdues opioid 
products.  In connection with the Purdue investigation, the District of Vermont additionally 
prosecuted and convicted Practice Fusions Director of National Accounts with attempting to 
obstruct a grand jury investigation.  Purdue agreed to the imposition of an allowed, unsubor-
dinated, general unsecured bankruptcy claim for a criminal fine of more than $3.5 billion and an 
additional $2.0 billion in criminal forfeiture, up to approximately $1.8 billion of which the DOJ 
agreed to credit against recoveries by state and local government creditors in the Purdue 
bankruptcy.  As part of the same resolution, in October 2020, Purdue agreed to an allowed, 
unsubordinated, general unsecured bankruptcy claim for $2.8 billion to resolve civil FCA 
allegations that Purdue promoted its opioid drugs to health care providers it knew were 
prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that 
often led to abuse and diversion, and to resolve allegations that Purdue paid kickbacks to doctors, 
Practice Fusion, and certain specialty pharmacies to induce prescriptions.  Purdue incorporated 
the criminal and civil settlements into its plan of reorganization.  The district court subsequently 
reversed a bankruptcy court order confirming the plan and litigation over the plan continues. 
 
In November 2020, Indivior Solutions (Indivior) was sentenced to pay $289.0 million in criminal 
penalties after pleading guilty to a one-count felony information in connection with the 
marketing of the opioid-addiction-treatment drug Suboxone, which is a formulation of 
buprenorphine.  In connection with its guilty plea, Indivior admitted to making false statements 
 
16 
   
to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid 
program (MassHealth) relating to the safety of Suboxone Film around children.  Under the civil 
settlement, Indivior Inc. and Indivior plc agreed to pay an additional $300.0 million ($209.3 
million to the Federal Government and $90.7 million to the states) to resolve allegations that 
from 2010 through 2015, Indivior companies knowingly:  (a) promoted the sale and use of 
Suboxone to physicians who were writing prescriptions that were not for a medically accepted 
indication and that lacked a legitimate medical purpose, were issued without any counseling or 
psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, 
and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state 
Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to 
diversion and abuse than other buprenorphine products and that Suboxone Film was less 
susceptible to accidental pediatric exposure than tablets; and (c) took steps to delay the entry of 
generic competition for Suboxone to improperly control pricing of Suboxone.  In connection 
with the criminal and civil resolutions, Indivior Inc. executed a five-year CIA with HHS-OIG.  In 
addition, Indivior Inc. agreed to pay $10.0 million to resolve claims that it engaged in unfair 
methods of competition in violation of the Federal Trade Commission Act.  Further, Indivior 
plcs former CEO and former medical director each pled guilty to a one-count misdemeanor 
information related to Indiviors misrepresentations to MassHealth, with the former receiving a 
six-month term of incarceration and $600,000 in fines and forfeiture, and the latter receiving a 
six-month term of home detention, 100 hours of community service, and a $100,000 fine. 
 
In December 2020, pharmaceutical company Biogen, Inc. (Biogen), based in Cambridge, 
Massachusetts, agreed to pay $22.0 million to resolve civil FCA allegations that it illegally used 
foundations as a conduit to pay the copays of Medicare patients taking Biogens multiple 
sclerosis drugs Avonex and Tysabri.  The settlement resolved allegations that Biogen engaged in 
a prohibited kickback scheme by using two foundations, which claim 501(c)(3) status for tax 
purposes, as conduits to pay the copay obligations of Medicare patients to induce patients to 
purchase Medicare-reimbursed Avonex and Tysabri prescriptions.  The government alleged that 
as part of the scheme, Biogen identified for its vendor certain patients in Biogens Avonex or 
Tysabri free drug program, and then worked with the vendor to transfer these patients to the 
foundations, which received contemporaneous payments from Biogen and covered the costs of 
Medicare copays for most or all of these patients, while Medicare paid the remaining portion of 
the patients Avonex or Tysabri claims.  The government alleged that Biogen engaged in this 
conduct in the first quarter of 2011 for certain Avonex patients, and in the second and third 
quarters of 2012 and 2013 for certain Tysabri patients.  
 
In April 2021, Bristol-Myers Squibb (BMS) agreed to pay the United States and participating 
states a total of $75.0 million to resolve civil FCA allegations that it knowingly underpaid 
rebates owed under the Medicaid Drug Rebate Program, under which drug manufacturers are 
required to pay quarterly rebates to state Medicaid programs in exchange for Medicaids 
coverage of the manufacturers drugs.  The settlement resolved allegations that BMS 
underreported Average Manufacturer Prices (AMPs)  for some of its drugs by improperly 
reducing the reported AMPs for service fees paid to wholesalers, and by improperly excluding 
from the reported AMPs additional value it received pursuant to price appreciation provisions in 
its contracts with wholesalers, thereby underpaying quarterly rebates owed to the states and 
 
17 
   
causing the United States to be overcharged for its payments to the states for the Medicaid 
program.  BMS agreed to pay more than $41.3 million to the United States pursuant to the 
settlement, and the remainder to states participating in the settlement. 
In September 2021, generic pharmaceutical manufacturers Taro Pharmaceuticals USA, Inc. 
(Taro), Sandoz Inc. (Sandoz), and Apotex Corporation (Apotex), respectively headquartered in 
New York, New Jersey, and Florida, agreed to pay a total of $447.2 million pursuant to three 
separate settlements to resolve civil FCA allegations that they participated in conspiracies to fix 
the price of various generic drugs that resulted in higher drug prices for federal health care 
programs and beneficiaries.  The settlements resolved allegations that between 2013 and 2015, 
the three companies paid and received compensation prohibited by AKS through arrangements 
on price, supply, and allocation of customers with other pharmaceutical manufacturers for certain 
generic drugs manufactured by the companies.  Under the settlements, Taro agreed to pay $213.2 
million, Sandoz agreed to pay $185.0 million, and Apotex agreed to pay $49.0 million.  In 
connection with the settlements, each company also entered a five-year CIA with HHS-OIG.  
The CIAs include unique internal monitoring and price transparency provisions and require the 
companies to implement compliance measures.  All three companies previously entered into 
deferred prosecution agreements to resolve related criminal charges.  Under the deferred 
prosecution agreements, Taro paid a criminal penalty of $205.6 million and admitted to 
conspiring with two other generic drug companies to fix prices on certain generic drugs, Sandoz 
paid a criminal penalty of $195.0 million and admitted to conspiring with four other generic drug 
companies to fix prices on certain generic drugs, and Apotex paid a criminal penalty of $24.1 
million and admitted to conspiring to increase and maintain the price on pravastatin.  The civil 
settlement payments were in addition to the criminal penalties paid by the companies.    
 
Durable Medical Equipment (DME)  
 
(SF) In October 2020, the owner of a telemarketing company was convicted of one count of 
conspiracy to pay and receive for her role in an illegal kickback scheme involving medically 
unnecessary DME and cancer genetic testing in which Medicare was billed at least $20.2 million 
and paid $6.9 million for kickback-tainted orthotic braces.  In September 2021, the owner was 
sentenced to 36 months imprisonment. 
In December 2020, DME provider Apria Healthcare Group, Inc. and its affiliate Apria 
Healthcare LLC (collectively Apria), based in New York, agreed to pay $40.5 million to resolve 
civil FCA allegations that it submitted false claims to federal health programs, including 
Medicare and Medicaid, by seeking reimbursement for the rental of costly, medically 
unnecessary non-invasive ventilators (NIVs) to program beneficiaries and improperly waiving 
patient co-insurance payments.  The settlement resolved allegations that Apria routinely billed 
Medicare and other programs when it did not know whether NIVs were still being used by 
patients, which would have supported medical necessity, and that even when Apria had 
information indicating that patients were no longer using their NIVs, it often continued to bill the 
federal health programs.  In connection with the settlement, the company also entered into a CIA 
with HHS-OIG.  
 
18 
   
(SF) In March 2021, the president of a purported telemedicine company pled guilty to 
conspiracy to commit health care fraud and wire fraud, for his role in a conspiracy to defraud 
Medicare through the submission of false and fraudulent orthotic brace orders.  This individual 
admitted that he solicited illegal kickbacks and bribes in exchange for medically unnecessary 
orders for orthotic braces and caused the submission of over $56.0 million in false and fraudulent 
claims for which the suppliers of durable medical equipment were paid over $10.0 million. 
 
(SF) In June 2021, a jury convicted the owners of two DME supplier companies in Texas of 
charges resulting from their involvement in a scheme to defraud Medicare.  According to court 
documents, from approximately March 2016 through January 2019, the defendants paid 
kickbacks and bribes in exchange for signed doctors orders for orthotic braces that were not 
medically necessary.  To conceal the kickbacks and bribes, the defendants and their co-
conspirators executed sham contracts and created fake invoices appearing to be for legitimate 
marketing or business process outsourcing services.  The defendants DME companies 
collectively billed Medicare Parts B and C over $59.0 million.  On December 15, 2021, the 
defendants were each sentenced to 151 months in prison, three years supervised release, and 
ordered to pay $27,104,359 in restitution. 
 
In June 2021, a nurse practitioner in Florida was sentenced to 12 months and 1 day in prison, two 
years supervised release, and ordered to pay $23,880,678 in restitution.  The defendant pled 
guilty on October 13, 2020 to one count of conspiring to solicit and receive illegal kickbacks and 
one count of executing a health care fraud scheme.  Between 2017 and 2019, the defendant 
received illegal kickbacks from telemedicine and other companies to sign orders and 
prescriptions for medically unnecessary DME, genetic testing and prescription medications for 
patients identified through mass marketing.  Telemarketers in the United States and elsewhere 
solicited patients through media ads and cold calls and then contacted the patients to obtain their 
insurance information.  Although the telemarketers were not health care professionals, they 
completed order forms and sometimes encouraged patients to exaggerate the extent of their pain 
or need for braces and pain creams.  The orders were then sent to telemedicine doctors or nurse 
practitioners, who were typically paid $30-$50 for each patient for whom they signed orders and 
prescriptions.  The defendant did not have a prior doctor-patient relationship with the patients for 
which she signed orders and prescriptions, did not evaluate or assess the patients needs for the 
items, and in most cases had no contact with the patients, who lived in states distant from her.  
The defendant received numerous complaints from patients, indicating that they had not 
requested and did not want or need the DME.  Between 2017 and 2019, the defendant was paid 
$681,114 for signing orders and prescriptions for patients for whom she never determined a 
medical need for the ordered items and services.  Federal health care benefit programs paid 
$23,880,678 for the false and fraudulent orders and prescriptions signed by the defendant.  
 
In July 2021, a doctor in Florida was sentenced to 74 months of incarceration, followed by three 
years of supervised release.  The doctor had previously pled guilty to one count of conspiracy to 
commit healthcare fraud.  The doctor was involved in the Operation Brace Yourself takedown 
that occurred in April 2019.  The doctor owned and operated several DME companies, many of 
which were operating in nominee owner names, that submitted high volumes of claims to 
Medicare for DME orthotics.  The doctor purchased pre-signed doctors' orders from purported 
 
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marketing companies who paid bribes and kickbacks to telemedicine companies/physicians in 
exchange for authorizing medically unnecessary equipment.  The doctors' orders were purchased 
at a price per brace in violation of the AKS.  In total, the doctor caused over $20.0 million 
dollars in false claims to be submitted, of which about $10.7 million was paid.  
 
In July 2021, Arriva Medical LLC (Arriva), a mail-order diabetic testing supply company based 
in Coral Springs, Florida until it ceased business operations in December 2017, and its parent, 
Alere Inc. (Alere), a medical device company now based in Abbott Park, Illinois, agreed to pay 
$160.0 million to resolve civil FCA allegations that Arriva, with Aleres approval, made, or 
caused, claims to Medicare that were false because kickbacks were paid to Medicare 
beneficiaries, patients were ineligible to receive diabetic testing meters, or patients were 
deceased.  The government alleged that:  (1) from April 2010 until the end of 2016, Arriva, with 
Aleres approval, paid kickbacks to Medicare beneficiaries by providing them free or no cost 
meters and by routinely waiving, or not collecting, their copayments for meters and diabetic 
testing supplies; (2) Arriva, with Aleres approval, systematically provided to all of its new 
patients, and billed Medicare for, a meter without regard to the patients eligibility for one; and 
(3) Arriva submitted false claims to Medicare on behalf of deceased beneficiaries.  
 
(SF) In August 2021, a DME company owner pled guilty to his role orchestrating a large health 
care fraud and money laundering scheme involving a series of bogus durable medical equipment 
companies that billed Medicare, a state Medicaid agency and private health insurers more than 
$48.0 million for medical supplies the companies never purchased and never provided.  As part 
of its investigation, federal agents executed a search warrant on this individuals residence on 
March 11, 2021.  During execution of that warrant, agents discovered more than $2.5 million in 
cash hidden in PVC piping and buried under the closet flooring in one of the bedrooms, a large 
amount of expensive jewelry, and another $280,000 in cash that was hidden in a safe at a 
separate location.  On April 5, 2021, agents seized another $1.2 million from a bank account 
associated with one of this individuals fraudulent entities.   
   
Electronic Health Records 
 
In January 2021, athenahealth Inc. (Athena), an electronic health records (EHR) technology 
vendor based in Watertown, Massachusetts, agreed to pay more than $18.2 million to resolve 
civil FCA allegations that it paid unlawful kickbacks to generate sales of its EHR product.  The 
settlement resolved allegations that Athena violated the FCA and the AKS through three 
marketing programs by which Athena:  (1) invited prospective and existing customers to 
sporting, entertainment, and recreational events, providing free tickets and amenities; (2) paid 
kickbacks to its existing customers under a program designed to identify and refer new 
prospective clients to Athena; and (3) entered into deals with competing vendors that were 
discontinuing their EHR technology offerings to refer their clients to Athena such that Athena 
paid remuneration to the competitor based on the value and volume of practices that were 
successfully converted into Athena clients.  
 
In April 2021, EHR software developer CareCloud, Health, Inc. f/k/a CareCloud Corporation 
(CareCloud) of Miami, Florida agreed to pay $3.8 million to resolve civil FCA allegations that it 
 
20 
   
paid unlawful kickbacks through its marketing referral program to generate sales of its EHR 
products.  The settlement resolved allegations that CareCloud violated the FCA and the AKS 
between January 2012 and March 2017 by offering and providing its existing clients cash 
equivalent credits, cash bonuses, and percentage success payments to recommend CareClouds 
EHR products to prospective clients; by requiring existing clients who participated in the 
marketing referral program to execute written agreements prohibiting them from providing 
negative information about CareClouds EHR products to prospective CareCloud clients; and by 
failing to disclose to prospective CareCloud clients this referral-kickback arrangement or that 
participants in the marketing referral program were contractually prohibited from sharing 
negative company information with them.  
  
Genetic Testing/RPP Testing Paired with COVID-19 Testing 
 
(SF) In October 2020 and January 2021, two individuals who worked together as marketers were 
charged by information for their roles in a scheme to pay and receive kickbacks in connection 
with providing a laboratory with DNA swabs that could be used to perform and bill for cancer 
genetic tests (CGx) and pharmacogenetic tests (PGx).  The marketers admitted that they and 
others acting at their direction solicited Medicare and Medicaid beneficiaries to provide DNA 
samples, and paid kickbacks to a nurse practitioner who was not treating the beneficiaries in 
exchange for signing orders that were provided to the laboratory.  They also admitted that they 
received kickbacks from the owners and operators of the laboratory in exchange for providing 
the samples and the signed orders, including providing sham contracts and invoices to conceal 
the kickback payments.  The scheme resulted in the submission of approximately $12.0 million 
in claims for CGx and PGx tests that were medically unnecessary, ineligible for reimbursement 
by the payors, and not provided as represented. 
 
(SF) In January 2021, at the conclusion of a one-week trial, a patient recruiter was found guilty 
of conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive 
kickbacks, and the receipt of kickbacks for his role in in a fraud scheme with losses of 
approximately $3.3 million in billed claims.  The trial evidence showed that this individual was a 
patient recruiter who was integral to the execution of a cancer genetic testing scheme by 
recruiting Medicare beneficiaries, and obtaining buccal swabs from them, for genetic testing that 
was not medically necessary and not covered by Medicare.  The trial evidence further showed 
that this individual was responsible for paying telemedicine doctors kickback payments in order 
to obtain doctors orders authorizing the genetic testing.  The individual and his co-conspirators 
would then send the buccal swabs and the doctors orders to laboratories that would subsequently 
bill Medicare for the genetic testing.  In April 2021, the patient recruiter was sentenced to 10 
years in prison for his part in leading the scheme.  This was the first cancer genetic testing case 
and the first case charging payments to telemedicine companies as a kickback to go to trial. 
 
(SF) Between January 2021 and September 2021 four defendants pled guilty in connection with 
the submission of over $70.0 million in false and fraudulent claims for allergy and COVID-19 
testing.  The charges relate to false and fraudulent statements about the existence, regulatory 
status, and accuracy of a COVID-19 test that was purportedly offered by the Arrayit 
Corporation.  The conspiracy allegedly sought to induce the ordering of the Arrayit COVID-19 
 
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test and to bundle, i.e., require combination with the COVID-19 test and Arrayits medically 
unnecessary allergy test.  The COVID-19 test results were not provided in a timely fashion and 
were not reliable in detecting COVID-19.  To date, the Arrayit Vice President of Marketing, 
Arrayit Medical Director, a physician, and an executive of an Arizona marketing organization 
have entered pleas of guilty in connection with the scheme. 
 
Home Health Providers 
 
(SF) In November 2020, a physician-owner was sentenced to 5 years in prison and ordered to 
pay $9.5 million in restitution after conviction for a conspiracy to commit healthcare fraud, 
conspiracy to solicit and receive healthcare kickbacks, and making false statements in a 
healthcare matter as part of a multi-million-dollar home healthcare fraud scheme.  The 
September 2019 trial evidence showed that the physician-owner conspired with others to defraud 
Medicare by signing false and fraudulent home healthcare paperwork that was used to submit 
fraudulent claims to Medicare.  The physician-owner required home healthcare agencies to pay 
an illegal kickback, which she disguised as a co-pay, in exchange for certifying and 
recertifying patients for home healthcare services.  The evidence showed she would not release 
the home healthcare paperwork until the home healthcare companies or their marketers paid her 
the kickback.   
 
(SF) In November 2020 and early 2021, four defendants were sentenced for their roles in a $80.4 
million home health care fraud, wire fraud, and money laundering scheme that took place in the 
Southern District of Florida.  In November 2020, the groups money mule received a sentence of 
approximately 8 years.  In January 2021, the first kingpin and his lieutenant were sentenced to 
17.5 years and 10 years, respectively.  In May 2021, the second kingpin was also sentenced to 
17.5 years.  These individuals operated three sham home health agencies that never treated a 
single patient, yet billed Medicare for over $80.0 million in fraudulent claims, of which they 
received approximately $50.0 million.  They laundered the proceeds through dozens of shell 
companies.  They evaded law enforcement detection for years by requiring nominee owners of 
the home health agencies and shell companies to permanently flee to Cuba upon the conclusion 
of their involvement in the scheme, beyond the jurisdiction of the United States. 
 
In August 2021, a residential care company based in Oregon, At Home Care LLC, doing 
business as At Home Care Group (AHCG), and its owner agreed to pay $2.9 million to resolve 
civil FCA allegations that between March 2013 and September 2018, it billed the Oregon 
Medicaid program for services not provided.  The settlement resolved allegations that AHCG 
altered caregiver scheduling calendars and billed the Oregon Medicaid program for hours of in-
home care not actually provided.  Under the settlement, AHCG and its owner will pay more than 
$1.8 million to the United States and more than $1.0 million to Oregon.  As part of the 
settlement, AHCGs owner was required to divest ownership in the company and enter a state 
court guilty plea for two counts of False Claims for Health Care Payment, and AHCG and its 
owner agreed to be excluded from all federal health payors for 15 years and 8 years, respectively. 
 
In September 2021, a Las Vegas resident was sentenced to 144 months in federal prison and 
ordered to pay $4,321,590.39 in restitution to the North Carolina Medicaid Program.  In May 
 
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2021, his wife was sentenced to 14 years in federal prison for her role in the fraud.  The two 
conspired to defraud the North Carolina Medicaid Program of over $10.0 million between 2017 
and 2019 alone.  The husband admitted that he and his wife carried out the fraud by exploiting an 
eligibility tool that was entrusted only to North Carolina Medicaid providers.  Specifically, the 
defendants searched publicly available sources, such as obituary postings on the internet by 
North Carolina funeral homes, to locate recently deceased North Carolinians and extract certain 
personal information for the deceased, including their name, date of birth, and date of 
death.  Using the extracted information, the defendants queried the North Carolina Medicaid 
eligibility tool to determine whether the deceased individual had a Medicaid Identification 
Number and was otherwise eligible for Medicaid coverage during their life.  If so, the defendants 
used that individuals identity to back-bill North Carolina Medicaid for up to one year of 
fictitious home health services that were allegedly rendered prior to the death of the 
individual.  The husband admitted that he and his wife carried out the fraud via the internet from 
locations around the globe, including their corporate office building in Las Vegas, their 
penthouse condominium in Las Vegas, a corporate office in North Carolina, and from various 
hotels and luxury resorts in and outside of the United States.  The husband further pled guilty to 
conspiring with his wife to launder the proceeds of the fraud into various luxury items.  These 
expenses included a $900,000 wire for the purchase of a British Aerospace Bae 125-800A 
private jet, hundreds of thousands of dollars in Tiffany & Co. and Brioni clothing and jewelry, 
thousands of dollars in Eastern North Carolina business properties, and thousands of dollars in 
gym equipment.   
 
In September 2021, BAYADA, BAYADA Home Health Care Inc., BAYADA Health LLC, and 
BAYADA Home Care (collectively, the BAYADA Companies), headquartered in New Jersey, 
agreed to pay $17.0 million to resolve civil FCA allegations that they violated the AKS by 
paying a kickback to a retirement home operator by purchasing two of its home health agencies 
located in Arizona.  The settlement resolved allegations that the BAYADA Companies bought 
the two home health agencies to induce referrals to BAYADA of Medicare beneficiaries from 
retirement communities operated by the seller throughout the United States, and that from 
January 2014 through October 2020, the BAYADA Companies submitted false claims for 
payment to Medicare for services provided to beneficiaries referred to BAYADA as a result of 
the kickback transaction.  
 
Hospice Care 
 
(SF) In November 2020, the administrator of a Southern California hospice was convicted of 
charges resulting from his involvement in a conspiracy to defraud Medicare.  According to court 
documents, from 2011 to 2018, the administrator, along with his co-conspirators, paid illegal 
kickbacks to patient recruiters for the referral of hospice beneficiaries and, when clinical staff at 
the hospice determined that beneficiary referrals did not qualify to receive hospice services, the 
administrator overruled those determinations and nonetheless caused the beneficiaries to be put 
on hospice services.  The administrator was personally responsible for $4,769,982 in false and 
fraudulent claims to Medicare, resulting in Medicare paying the hospice $2,984,914 for 
medically unnecessary hospice services for beneficiaries, many of whom had been recruited 
 
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through illegal kickbacks.  The owner pled guilty to conspiracy to commit health care fraud and 
was sentenced to 30 months in prison and restitution of over $2.1 million.  
 
In January 2021, Allstate Hospice LLC (Allstate) and Verge Home Care LLC (Verge) and their 
two founders, all located in Texas, agreed to jointly pay over $1.8 million to resolve civil FCA 
allegations that they submitted claims to Medicare that resulted from unlawful referrals, in 
violation of the Stark Law and the AKS.  The settlement resolved allegations that the founders 
offered compensation to physicians in exchange for referrals to both Allstate and Verge, which 
included providing monthly payments pursuant to medical directorships that were in excess of 
fair market value for the hours worked by the physicians.  The settlement also resolved 
allegations that the founders sold interests in Allstate to five different physicians, who were 
referral sources for both Allstate and Verge, which ultimately netted those physicians substantial 
quarterly dividends.      
 
(SF) In February 2021, the CEO of a Texas-based group of hospice and home health entities, 
was sentenced to 15 years in prison in connection with an over $150.0 million fraud scheme that 
was one of the first criminal hospice fraud cases tried to a verdict.  During the scheme, the 
defendants enrolled patients in expensive hospice services who were not expected to die within 
six months, as is required for eligibility for hospice, billed for fraudulent services, and 
manufactured false and fictitious records and produced them to a federal grand jury.  Further, the 
defendants laundered proceeds generated from the scheme to purchase luxury vehicles, including 
a Porsche, clothing from high end retailers such as Louis Vuitton, premium season tickets to see 
the San Antonio Spurs, and exclusive real estate.  Finally, the defendants misled the FBI, 
directed others to lie to the FBI, and took steps to cover up illegal kickbacks that a co-conspirator 
was receiving in connection with the scheme.  The CEOs co-conspirator, the owner of the 
hospice and home health entities, was also convicted following the November 2019 trial.  He 
was sentenced to 20 years in prison in December 2020.  Two other co-conspirators have pled 
guilty and are awaiting sentencing.  
 
Hospitals and Health Systems 
 
In April 2021, four executives of a Texas based healthcare company and its various health 
centers were ordered to federal prison for a massive scam perpetrated in the Houston area.  The 
four executives were part of the executive team for a company that owned a hospital, as well as 
community mental health centers in the Houston area known by their locations.  Each location 
operated a partial hospitalization program (PHP).  The PHP was supposed to be a treatment 
program for individuals with mental illness, intended to closely resemble a highly structured, 
short-term hospital inpatient program.  However, while it was a distinct and organized intensive 
treatment program, it offered less than 24-hour daily care.  The four men were responsible for the 
day-to-day operation of the company and the hospital and were involved in the implementation 
of the various kickback programs.  Numerous people were referred for treatment in exchange for 
payment.  However, the vast majority did not qualify for PHP services, because they were not 
experiencing an acute psychotic episode or were actually suffering from intellectual disability, 
dementia, or Alzheimers.  In total, the company billed Medicare approximately $189.0 million 
in total for fraudulent PHP services and the Texas Medicaid program paid approximately $66.0 
 
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million on those clams.  As a result, Executive 1 was sentenced to 120 months in prison and 
ordered to pay $21,359,798 in restitution.  Executive 2 was sentenced to 48 months in prison and 
ordered to pay $21,359,798 in restitution.  Executive 3 was sentenced to 30 months in prison and 
ordered to pay $19,533,806 in restitution.  Finally, Executive 4 was sentenced to 30 months in 
prison and ordered to pay $1,500,000 in restitution.  
 
In July 2021, Akron General Health System (AGHS), a regional hospital system based in Akron, 
Ohio that was acquired at the end of 2015 by the Cleveland Clinic Foundation, agreed to pay 
more than $21.2 million to resolve civil FCA allegations of improper relationships with certain 
referring physicians that resulted in the submission of false claims to the Medicare program.  The 
settlement resolved allegations that between August 2010 and March 2016, AGHS paid 
compensation substantially in excess of fair market value to area physician groups to secure their 
referrals of patients, in violation of the AKS and the Stark Law, and then submitted claims for 
services provided to these illegally referred patients, in violation of the FCA.  
 
In August 2021, San Mateo County Medical Center and San Mateo County (collectively 
SMMC), located in California, agreed to pay approximately $11.4 million to resolve civil FCA 
allegations that SMMC submitted or caused the submission of claims to Medicare for non-
covered inpatient admissions.  The settlement resolved allegations that from January 2013 
through February 2017, SMMC admitted certain patients for whom inpatient care was not 
medically reasonable or necessary, including patients who were admitted for reasons other than 
medical status, and then billed Medicare for such patients despite SMMCs knowledge that the 
costs for admitting them were not reimbursable by Medicare.  In connection with the settlement, 
SMMC entered into a five-year CIA with HHS-OIG.  
 
Laboratory Testing 
 
In May 2021, the Florida-based University of Miami (UM) agreed to pay $22.0 million to 
resolve civil FCA allegations that it ordered medically unnecessary laboratory tests and 
submitted false claims through its laboratory and off campus hospital-based facilities (UM 
Hospital Facilities).  The settlement resolved allegations that UM:  (1) knowingly engaged in 
improper billing relating to its UM Hospital Facilities by converting multiple physician offices to 
UM Hospital Facilities and then seeking payment at higher rates without providing beneficiaries 
the required notice; (2) billed federal health care programs for medically unnecessary laboratory 
tests for patients who received kidney transplants at the Miami Transplant Institute (MTI), a 
transplant program operated by UM and Jackson Memorial Hospital (JMH); and (3) caused JMH 
to submit inflated claims for reimbursement for pre-transplant laboratory testing conducted at the 
MTI, in violation of related party regulations, by controlling JMHs decision to purchase pre-
transplant laboratory tests from UM at inflated rates in exchange for UMs surgeons and surgical 
department continuing to perform surgeries at JMH.  In a separate agreement, JMH agreed to pay  
$1.1 million to resolve related civil FCA allegations.  Contemporaneous with the UM settlement, 
UM agreed to enter into a CIA with HHS-OIG.     
In September 2021, a federal district court entered default judgments on civil FCA claims for the 
United States totaling more than $136.0 million against pain management clinics Oaktree 
 
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Medical Centre P.C. (Oaktree), FirstChoice Healthcare P.C. (FirstChoice), Pain Management 
Associates of the Carolinas LLC (PMA of the Carolinas), and Pain Management Associates of 
North Carolina P.C. (PMA of North Carolina), and a urine drug testing laboratory, Labsource, 
LLC, all based in South Carolina.  The government had alleged that Oaktree, FirstChoice, 
Labsource, PMA of the Carolinas and PMA of North Carolina provided illegal financial 
incentives to providers to induce their referrals of urine drug tests in violation of the Stark Law 
and the AKS.  The district court had previously entered a default judgment in the amount of 
more than $4.2 million against urine drug testing laboratory ProLab LLC and substance use 
counseling clinic ProCare Counseling Center LLC.  The government had alleged that ProCare 
and ProLab billed federal health care programs for unnecessary urine drug tests.  
 
Managed Care 
 
In August 2021, Sutter Health, a California-based health care services provider, and several 
affiliated entities, including Sutter Bay Medical Foundation (doing business as Palo Alto 
Medical Foundation, Sutter East Bay Medical Foundation, and Sutter Pacific Medical 
Foundation) and Sutter Valley Medical Foundation (dba Sutter Gould Medical Foundation and 
Sutter Medical Foundation) (collectively Sutter Health) agreed to pay $90.0 million to resolve 
civil FCA allegations that Sutter Health knowingly submitted inaccurate information about the 
health status of beneficiaries enrolled in Medicare Advantage Plans under the Medicare Part C 
program.  The settlement resolved allegations that Sutter Health knowingly submitted 
unsupported diagnosis codes for certain patient encounters for beneficiaries under its care, which 
in turn caused inflated payments to be made to the Medicare Advantage Plans and to Sutter 
Health, and that once Sutter Health became aware of these unsupported diagnosis codes, it failed 
to take sufficient corrective action to identify and delete additional unsupported diagnosis codes.  
In connection with the settlement, Sutter Health, Sutter Bay Medical Foundation, and Sutter 
Valley Medical Foundation entered into a five-year CIA with HHS-OIG. 
 
Medical Devices 
 
In October 2020, medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, 
Utah, agreed to pay more than $15.2 million to resolve civil FCA allegations that the company 
paid kickbacks to health care providers to induce the use of MMSI products.  The settlement 
resolved allegations that, for over six years, MMSI engaged in a kickback scheme to pay 
physicians, medical practices, and hospitals in the form of millions of dollars in free advertising 
assistance, practice development, practice support, and purported unrestricted educational 
grants to induce the healthcare providers to purchase and use a wide variety of MMSI products in 
medical procedures performed on Medicare, Medicaid, and TRICARE beneficiaries.  In addition 
to the federal recovery, MMSI agreed to pay more than $2.7 million to resolve state Medicaid 
claims. 
 
In July 2021, St. Jude Medical Inc. (St. Jude), which was acquired by Abbott Laboratories in 
January 2017, agreed to pay $27.0 million to settle civil FCA allegations that between November 
2014 and October 2016, it knowingly sold defective heart devices to health care facilities that, in 
turn, implanted the devices into patients insured by federal health care programs.  The settlement 
 
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resolved allegations that St. Jude failed to disclose serious adverse health events in connection 
with the premature depletion of the battery in certain models of its implantable defibrillators used 
in patients at risk of cardiac arrest due to an irregular heartbeat.  
 
In July 2021, medical device manufacturers Alere Inc. and Alere San Diego Inc. (Alere), 
respectively located in Waltham, Massachusetts and San Diego, California during the relevant 
time period, agreed to pay more than $38.7 million to resolve civil FCA allegations for billing, or 
causing others to bill, Medicare for defective rapid point-of-care testing devices from 2008 to 
2016.  The settlement resolved allegations by the United States that Alere knowingly sold 
defective blood coagulation monitors used by Medicare beneficiaries taking anticoagulant drugs, 
and that despite awareness that those systems were linked to over a dozen deaths and hundreds of 
injuries, including intra-cerebral hemorrhaging and cardiovascular events following bleeding 
episodes, Alere concealed the defect for years and billed Medicare for the use of the defective 
devices.  
 
Nursing Homes and Facilities 
 
In March 2021, the last of five defendants, all paid caregivers at a residential facility in Fulton, 
Missouri, was sentenced to probation on one count of health care fraud.  The facility contracted 
to provide housing and care for developmentally disabled persons through a Missouri 
Department of Health Initiative.  The case involved the death of a developmentally disabled 
Medicaid beneficiary, C.D.  From 2014-16, Defendant 1 was aware that C.D. was in declining 
health, but she did not seek medical care for him because she did not want to be blamed for 
mistreating him.  In approximately September-October 2016, when the beneficiarys health 
continued to decline and he was obviously very ill, she took him and his roommate to her home 
and kept them in its unfinished basement.  The beneficiary experienced an acute medical 
emergency in the presence of Defendant 1 and her husband, Defendant 2.  Both observed the 
beneficiarys physical distress and obvious medical need but did not perform CPR, call for an 
ambulance, or otherwise seek medical care because they did not want to be blamed for his poor 
health.  The beneficiary died in their presence at their home.  In April 2017, Defendant 1 
reported to the Fulton Police Department that C.D. was missing, leading to a week-long search 
by law enforcement, volunteers, dogs, and drones.  After a fruitless search, the beneficiarys 
body was found in a trash bin encased in concrete enclosed in a crate in Defendant 1s storage 
unit in Fulton.  Defendant 2 provided the crate in which the beneficiarys body was encased in 
concrete, and he helped haul it to the storage unit.  Defendants 1 and 2 each pled to one count of 
violating the beneficiarys civil rights by willfully failing to provide him necessary medical care.  
Defendant 1 also pled to one count of health care fraud because she was involved in submitting 
claims to Medicaid for the beneficiarys care after he died to hide the fact that he died.  She was 
sentenced to 210 months and Defendant 2 was sentenced to 188 months in prison.  Defendants 1 
and 2s two adult children, who also worked at the facility, each pled guilty to one count of 
knowingly falsifying a document with the intent to impede, obstruct, or influence the 
investigation into the beneficiarys death, and were sentenced to twelve months in prison and 
probation, respectively.  The fifth defendant pled guilty to falsely completing and signing the 
beneficiarys Community RN Monthly Health Summary every month from at least September 
2016 (the time of the beneficiarys death) through March 2017 (shortly before the beneficiarys 
 
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body was discovered), falsely stating that she had performed a face-to-face assessment of the 
beneficiary and had provided the other services she was required to do as a Community 
Registered Nurse.   
 
In May 2021, SavaSeniorCare, LLC and related entities (Sava), based in Georgia, agreed to pay 
more than $11.2 million to the government and certain states to resolve civil FCA allegations 
that Sava caused its skilled nursing facilities (SNFs) to bill the Medicare program for 
rehabilitation therapy services that were not reasonable, necessary or skilled, and that Sava billed 
the Medicare and Medicaid programs for grossly substandard skilled nursing services.  The 
settlement resolved allegations that between October 2008 and September 2012, Sava knowingly 
submitted false claims for rehabilitation therapy services as a result of a systematic effort to 
increase its Medicare billings through corporate-wide policies and practices that exerted 
significant pressure on its SNFs to meet unrealistic financial goals.  The settlement also resolved 
allegations that between October 2008 and September 2012, Sava knowingly submitted false 
claims to certain states Medicaid programs for coinsurance amounts for rehabilitation therapy 
services for beneficiaries eligible for both Medicare and Medicaid and for whom Sava also 
allegedly submitted or caused the submission of false claims to Medicare for those services.  The 
settlement further resolved allegations that between January 2008 and December 2018, Sava 
knowingly submitted false claims for payment to Medicare and certain states Medicaid 
programs for grossly and materially substandard and/or worthless skilled nursing services.  In 
connection with the settlement, Sava entered into a five-year chain-wide CIA with HHS-OIG.  
 
In May 2021, Care Initiatives, a Texas corporation with a home office in West Des Moines, 
Iowa, agreed to repay the United States $214,200 to resolve claims the United States was entitled 
to restitution for the federal share of Medicaid funds the facility received for an approximately 
10-week period while residents at Dubuque Specialty Care, a Care Initiatives facility, were 
suffering from or testing positive for COVID-19.  The settlement resolved allegations that 
repayment of these funds was warranted due to Dubuque Specialty Cares practices surrounding 
COVID-19 infections, including the facilitys allegedly deficient procedures and criteria for 
screening symptomatic employees.    
 
In July 2021, Select Medical Corporation, the prior parent company of Select Medical 
Rehabilitation Services Inc. (SMRS), and Encore GC Acquisition LLC, the successor-in-interest 
to SMRS, agreed to pay $8.4 million to resolve civil FCA allegations that SMRS knowingly 
caused 12 SNFs in New York and New Jersey to submit false claims to Medicare for rehabili-
tation therapy services that were not reasonable, necessary, or skilled.  The settlement resolved 
allegations that at various times between January 2010 through March 2016, SMRSs corporate 
policies and practices encouraged and resulted in the provision of medically unnecessary, 
unreasonable, and unskilled therapy services being provided to patients at the 12 SNFs.  
 
Pharmacies 
(SF) In December 2020, an owner and operator of a marketing company in Colleyville, Texas, 
pled guilty to one count of conspiracy to commit healthcare fraud.  The charges resulted from the 
defendants role in an over $2.0 million conspiracy in which the defendant offered and paid 
 
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kickbacks and bribes to his co-defendants, a Texas-state licensed physician and a marketer in 
exchange for signed prescription of medically unnecessary compounding medications, i.e., pain 
creams, for TRICARE beneficiaries that the beneficiaries did not need or use.  The compounding 
medications were filled by a boutique compounding pharmacy located in Fort Worth, Texas.  
The defendant received a percentage of the compounding pharmacys net profits, i.e., the 
TRICARE reimbursement amounts minus the medication costs as determined by the pharmacy. 
The court sentenced the defendant to a term of imprisonment of 51-months and restitution of 
over $2.0 million.  In May 2021, the Texas-licensed physician, pled guilty to one count of 
conspiracy to commit healthcare fraud, and the marketer pled guilty to one count of obstructing a 
federal audit.  The marketer defendant was sentenced to a term of imprisonment of 18-
months.  The physician defendant awaits sentencing. 
 
(SF) In January 2021, a licensed pharmacist pled guilty to one count of conspiracy to commit 
health care fraud.  The charge stemmed from a scheme in which the defendant and at least five 
Detroit-based pharmacies caused the submission of more than $6.8 million in false and 
fraudulent claims to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan.  The false 
and fraudulent claims consisted of prescriptions that were submitted as claims through drug plan 
sponsors as if they were dispensed to beneficiaries, but in fact were never dispensed.  The 
pharmacist personally profited from his participation in the scheme by receiving fraudulent 
proceeds for personal use. 
 
(SF) In April 2021, the owner of multiple pharmacies in Queens, New York, pled guilty to mail 
fraud, health care fraud, and conspiracy to commit health care fraud.  The charges stemmed from 
the defendants participation in multiple schemes to defraud health care programs, including 
Medicare Part D and Medicaid drug plans of more than $6.5 million, between approximately 
May 2015 to January 2018 and December 2018 to March 2020.  According to court filings, these 
false and fraudulent claims included claims for reimbursement for drugs that were not dispensed, 
prescribed as claimed, or medically necessary, or that were purportedly dispensed during a time 
when one of the pharmacies was no longer licensed and registered with the State of New 
York.  The owner agreed to pay over $6.5 million in restitution and $5.1 million in forfeiture. 
 
In April 2021, two dozen defendants were sentenced after pleading to charges related to a vast 
prescription drug-billing scheme involving a Haleyville, Alabama-based pharmacy, Northside 
Pharmacy, which did business under the name Global Compounding Pharmacy.  The defendants 
included company executives and managers, a prescriber, billers, and sales representatives.  
Another two defendants were convicted after a jury trial in March.  From 2013 to 2016, this 
large-scale conspiracy billed insurers for massive quantities of medically unnecessary 
prescription drugs.  The scheme involved directing employees to get medically unnecessary 
drugs for themselves, family members, and friends, and billing drugs without patients 
knowledge.  The scheme resulted in pharmacy benefit managers paying Global nearly $50.0 
million in claims in just a two-year period, including more than $8.4 million for prescriptions 
Global employees got for themselves, and more than $13.0 million for prescriptions written by 
providers who got cash or whose spouses worked at Global.  Those sentenced included Globals 
president, who received 170 months in prison; the lead compounding pharmacist, who received 
 
29 
   
102 months; and the billing manager, who received 132 months.  The conspirators were 
collectively ordered to pay nearly $50.0 million in restitution. 
 
In May 2021, AlixaRx, LLC, a national provider of pharmacy services to long-term care 
facilities, agreed to pay more than $2.7 million to resolve allegations that it violated the 
Controlled Substances Act (CSA) and the civil FCA by allowing opioids and other controlled 
substances to be dispensed without valid prescriptions.  The settlement resolved allegations that 
between January 2014 and December 2017, AlixaRX violated the CSA by dispensing pursuant to 
purported emergency prescriptions in the absence of any true emergency and instead used 
these purported emergency prescriptions to effectuate simple refills of the patients medications.  
In addition, the settlement resolved allegations that AlixaRx routinely failed to obtain written 
prescriptions within seven days after the verbal authorization, and rather than disclose these 
violations to the DEA as required by law, AlixaRx engaged in a nationwide scheme to cover up 
its violations by obtaining backdated prescriptions from the prescribing physicians, in many 
cases over a year after the controlled substances were dispensed.  The settlement also resolved 
allegations that AlixaRx submitted false claims to Medicare for these invalid emergency 
prescriptions and billed Medicare Part D for claims that had already been reimbursed through 
claims paid to long-term care facilities under Medicare Part A. 
 
Physical Therapy 
In December 2020, former Georgia-based physical therapy company McLeod-Hughes and 
Associates, LLC and its owner agreed to pay $506,811 to resolve civil FCA allegations that it 
submitted bills to the Medicare and TRICARE programs for physical therapy services provided 
by unlicensed, uncredentialed or otherwise unapproved individuals.  The settlement resolved 
allegations that the company submitted claims to Medicare and TRICARE for physical therapy 
services purportedly provided by approved providers when, in fact, athletic trainers and other 
unlicensed, uncredentialed, or otherwise unapproved individuals furnished the physical therapy 
services.  In connection with the settlement, the company voluntarily agreed to be excluded as a 
provider from Medicare and other federal health care programs.   
 
Physician and Other Practitioners 
 
In December 2020, a Tallahassee, Florida doctor pled guilty to 56 counts of committing health 
care fraud, conspiracy to commit heath care fraud, and aggravated identity theft.  From late 2015 
to early 2020, the defendant committed unnecessary and invasive surgical procedures, and billed 
for additional procedures not performed.  As part of his plea, the defendant acknowledged 
engaging in a wide-ranging and consistent pattern of performing two invasive diagnostic 
angiography proceduresone on each legon hundreds of his patients, whether medically 
indicated or not.  The defendant also agreed to and the court entered a consent judgment for 
$30.0 million to resolve civil FCA allegations for billing for interventional angioplasty 
procedures that were never performed, including billing for procedures when the defendant was 
out of the country or otherwise not in the office.  The United States separately settled with the 
billing company, A/R Medical Claims Recovery, LLC d/b/a Medical AR Revenue Solutions, 
LLC, for $150,000. 
 
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In April 2021, Doctors Care, P.A., a South Carolina urgent care provider network, and its 
management company, UCI Medical Affiliates of South Carolina, agreed to pay $22.5 million to 
resolve civil FCA allegations that from 2013 through 2018, UCI falsely certified that certain 
urgent care visits were performed by providers who were credentialed to bill the states Medicaid 
program, Medicare, and TRICARE for medical services, while the services were performed by 
non-credentialed providers.  The settlement resolved allegations that UCI knew that federal 
insurance programs would deny claims submitted with the billing number of a provider who had 
not yet received their billing credentials, but instead of solving its credentialing problem, 
submitted the claims falsely, linking the uncredentialed rendering providers to credentialed 
billing providers in order to get the claims paid.  In connection with the settlement, UCI and 
Doctors Care entered into a CIA with HHS-OIG. 
 
In April 2021, a chiropractor was sentenced to 108 months in prison following his guilty plea to 
conspiracy to commit health care fraud.  From 2011 through 2017, the defendant ran a medical 
services corporation that provided a variety of pain management and rehabilitation services.  The 
defendant also ran multiple additional medical corporations with nominee owners meant to 
disguise the defendants and his co-conspirators fraudulent true ownership.  The defendant and 
his co-conspirators engaged in widespread fraud that included submitting claims to insurance 
providers, including Medicare, for medically unnecessary services and procedures or services 
that were not actually rendered.  In addition, defendant and his co-conspirators engaged in 
double billing, altering and fabricating medical records, and obstructing and impeding audits by 
Medicare and other insurance companies to conceal the fraud.  As part of the fraudulent scheme, 
defendant encouraged the continued use and billing of lucrative, high risk facet injections by a 
doctor who had no formal training and who taught himself by shadowing other doctors and 
watching YouTube videos.  Defendant was involved in all aspects of the billing for these 
injections, even when several patients suffered serious adverse effects, with one patient dying of 
related complications.  As part of his sentence, defendant was ordered to pay over $9.0 million in 
restitution, and to forfeit over $9.0 million. 
 
In June 2021, a Houston chiropractor and her clinics, Campbell Medical Group PLLC and 
Johnson Medical Group PLLC dba Campbell Medical Clinic, agreed to pay $2.6 million to 
resolve civil FCA allegations that they submitted false claims to Medicare and TRICARE for 
implantable neurostimulators.  The settlement resolved allegations that the chiropractor and her 
staff did not perform the surgeries to implant the neurostimulators, and instead nurse 
practitioners working for the clinic taped a small acupuncture device to patients ears
something they learned by watching training videos on YouTube.  The settlement also resolved 
allegations that the chiropractor was specifically warned by employees and her billing company 
that her practices were not compliant, including that she was committing possible fraud.  As 
part of the settlement, the chiropractor and her medical entities agreed to be subject to a 10-year 
period of exclusion from participating in any federal health care programs 
 
In September 2021, a cardiologist based in Orlando, Florida, agreed to pay over $6.7 million to 
resolve civil FCA allegations that he performed medically unnecessary ablations and vein stent 
procedures.  The settlement resolved allegations that from January 2013 to December 2019, the 
 
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cardiologist performed the ablations and stent procedures on veins that did not qualify for 
treatment under accepted standards of medical practice and made misrepresentations in patient 
medical records to justify the procedures, and that, in many instances, the ablations were 
performed either exclusively or primarily by one or more ultrasound technicians outside their 
scope of practice.  In connection with the settlement, the cardiologist and Interventional 
Cardiology & Vascular Consultants, PLC entered into a detailed, multi-year integrity agreement 
with HHS-OIG.  
 
Prescription Drugs and Opioids 
 
In October 2020, a doctor in New York was sentenced to serve 70 months in prison and three 
years supervised release and ordered to pay restitution in the amount of $344,562.65 to his 
victims, including Medicare.  The sentence was the result of the doctor's guilty plea, entered on 
January 7, 2020, in which he pled guilty to one count of conspiracy to unlawfully distribute 
controlled substances and one count of healthcare fraud.  In carrying out the conspiracy, the 
doctor and his employees issued more prescriptions for controlled substances annually than any 
other prescriber or prescribing entity in New York State, including hospitals.  Specifically, the 
doctor and his employees carried out their conspiracy by:  (1) prescribing controlled substances 
without conducting a physical examination and/or after conducting only a limited and inadequate 
physical examination; (2) prescribing controlled substances in ways that were likely to cause, 
and did cause, dependence and addiction, and that contributed to existing addictions; and (3) 
recommending a course of treatment, including the prescribing of controlled substances, which 
caused the death of at least six individuals, and contributed to the deaths of others. 
 
In March 2021, the chief executive officer (CEO) of a Michigan and Ohio-based group of pain 
clinics and other medical providers, was sentenced to 15 years in prison for developing and 
approving a corporate policy to administer unnecessary back injections to patients in exchange 
for prescriptions of over 6.6 million doses of medically unnecessary opioids.  In addition to the 
prison sentence, the CEO was also ordered to pay over $51.0 million in restitution to Medicare, 
as well as forfeiture to the United States of property traceable to proceeds of the health care fraud 
scheme, including over $11.5 million, commercial real estate, residential real estate, and a 
Detroit Pistons season ticket membership.  The CEO pled guilty in 2018 to one count of 
conspiracy to commit health care fraud and wire fraud, and one count of money laundering. 
Twenty-one other defendants, including 12 physicians, have been convicted thus far, including 
four physicians who were convicted after a one-month trial in 2020.  According to court 
documents, from 2008 to 2016, the CEOs clinics had a policy to offer patients, some of whom 
were suffering from legitimate pain and others of whom were drug dealers or opioid addicts, 
prescriptions of Oxycodone 30 mg, but forced the patients to submit to unnecessary back 
injections in exchange for the prescriptions.  Patients who were addicted to opioids told the 
doctors that they did not want, need, or benefit from the injections, were denied medication by 
the defendants and their co-conspirators until they agreed to submit to the expensive and 
unnecessary injections.  
(SF) In June 2021, a physician licensed in Tennessee and Indiana was sentenced to 36 months in 
prison for his unlawful prescribing of opioids to four patients.  All four patients eventually 
 
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overdosed and died after receiving opioids from the defendant.  The physician admitted in a 
guilty plea to knowingly distributing hydrocodone, a Schedule II controlled substance, to a 
patient who did not have any significant underlying health issues justifying such a prescription.  
From May 26, 2015, to November 1, 2018, the total pill count associated with the physicians 
charges was 587,344.  
 
In July 2021, a New York doctor was sentenced in federal court to 121 months in prison for 
participating in a scheme to receive bribes and kickbacks in the form of fees for sham 
educational programs (Speaker Programs) from pharmaceutical company Insys Therapeutics 
in exchange for prescribing millions of dollars worth of Subsys, a potent fentanyl-based spray 
manufactured by Insys, among other offenses.  In March 2013, a Regional Sales Manager for 
Insys sent an email to the doctor informing him that he would receive more Speaker Programs in 
the coming months because Insys wanted prescriptions of Subsys to increase and urging the 
doctor to put more patients on Subsys.  The doctor responded, in part, Got it, and significantly 
increased his Subsys prescriptions in the following months, during which he received 
approximately $33,600 in Speaker Program fees.  The doctor was also sentenced to 210 months 
in prison, to run concurrently with the other sentence, for distributing oxycodone and fentanyl to 
a patient for no legitimate medical purpose.  During the period in which the doctor was receiving 
kickbacks from Insys, he was also distributing powerfully addictive prescription drugs to a 
particular patient who died of a fentanyl overdose.  In addition to the prison sentence, the doctor 
was sentenced to three years of supervised release, ordered to forfeit $308,600 and ordered to 
pay a total fine of $75,000 across the two cases. 
 
(SF) In August 2019, a federal jury sitting in the Southern District of Texas convicted an 
unlicensed medical professional of distributing and dispensing schedule II opioids with no 
legitimate medical purpose and outside the usual course of professional practice and conspiring 
to do so.  The charges stemmed from the defendants role at a medical clinic in Rosenberg, 
Texas, where he acted as a medical doctorthough he was not licensedto illegitimately 
prescribe nearly identical prescriptions for hydrocodone and carisoprodola dangerous 
combination of controlled substances.  The defendant was charged alongside the clinics owner 
and a medical doctor, both of whom pled guilty in advance of trial.  In December 2020, a federal 
judge sentenced the codefendants.  The clinics owner, who is currently a fugitive in Pakistan, 
was sentenced to 240 months imprisonment, forfeiture, and a $500,000 fine.  The medical doctor 
who pled guilty in advance of trial, was sentenced to 72 months imprisonment and forfeiture.  
The unlicensed medical professional was sentenced to 96 months imprisonment after being 
convicted at trial. 
 
In August 2021, after a 9-day jury trial, a Wisconsin nurse practitioner and her partner, owners 
and operators of Clinical Pain Consultants (CPC), were convicted of conspiracy to distribute 
controlled substances and multiple counts of unlawful distribution of controlled substances.   
Between at least 2015 and 2016, the defendants ran CPC as a pill mill, prescribing large doses 
of opioids outside the usual course of professional practice and not for a legitimate medical 
purpose.  Opioids such as oxycodone, oxycontin, methadone, and fentanyl were prescribed to 
over 99 percent of the patients at CPC.  In 2015 and 2016, the defendant was the number one 
prescriber of oxycodone among all Medicaid providers in the state of Wisconsin.  The defendant 
 
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was also convicted of distribution of controlled substances resulting in death.  Based on the 
conviction on the death-resulting-from charge, the nurse faces a mandatory minimum of 20 
years imprisonment.   
 
Psychiatric and Psychological Testing and Services 
 
In January 2021, Florida-based Oglethorpe Inc., its two Ohio inpatient psychiatric hospitals, 
Cambridge Behavioral Hospital (Cambridge) and Ridgeview Behavioral Hospital (Ridgeview), 
and its Ohio substance use treatment facility, The Woods at Parkside (Parkside) (collectively 
Ogelthorpe), agreed to pay more than $10.2 million to resolve civil FCA allegations of 
improperly providing free long-distance transportation to patients and admitting patients at 
Cambridge and Ridgeview who did not require inpatient psychiatric treatment, resulting in the 
submission of false claims to the Medicare program.  The settlement resolved allegations that 
between August 2013 and June 2019, Ogelthorpe provided free long-distance van transportation 
to patients to induce them to seek treatment at the defendants facilities, in violation of the AKS, 
and then submitted claims for services provided to these patients, in violation of the FCA.  The 
settlement also resolved allegations that Oglethorpe, Cambridge, and Ridgeview submitted, or 
caused to be submitted, false claims to Medicare for medically unnecessary inpatient psychiatric 
admissions and associated services at the two hospitals.  Contemporaneous with the settlement, 
Oglethorpe entered into a CIA with HHS-OIG. 
 
(SF) In June 2021, a clinical social worker with a masters degree in social work pled guilty to 
one count of conspiracy to commit health care fraud.  The charge stemmed from a scheme in 
which the defendant and her co-conspirators caused the submission of more than $1.4 million in 
false and fraudulent claims for psychotherapy services from two different Detroit-based 
companies to Medicare.  These false and fraudulent claims included billing for individual and 
group psychotherapy services that were rendered by ineligible providers and for services that 
were not provided at all.  The defendant was educated by the HHS Office of Audit Services 
after being investigated for her ineligible billing practices, yet she continued to perpetuate her 
scheme to defraud.  From 2015 to 2020, the defendant was the highest billing provider in both 
the state of Michigan and the Midwest region for 45-minute individual psychotherapy claims 
submitted to Medicare. 
 
In August 2021, Carenow Services, LLC, a Rosswell, Georgia-based psychotherapy services 
provider, and its CEO agreed to pay $2.0 million to settle civil FCA allegations that they billed 
Medicare and Medicaid for psychotherapy sessions at nursing homes and skilled nursing 
facilities that were medically unnecessary, improperly documented, or billed at higher intensity 
levels than justified.  The settlement resolved allegations that between 2012 and 2018, Carenow 
billed Medicare and the states Medicaid program for psychotherapy sessions at nursing homes 
and skilled nursing facilities that did not have any documented medical necessity.  The 
settlement also resolved allegations that, in those situations where the psychotherapy sessions 
were medically necessary, Carenow upcoded its services and billed Medicare and Medicaid at 
higher reimbursing procedural codes. 
 
 
 
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Substance Use Treatment Centers 
 
In October 2020, the owner of two Florida based substance use treatment centers and a medical 
health clinic, was sentenced to 210 months imprisonment, and ordered to pay restitution in the 
amount of $ 4,231,288 following his conviction, after a six-week jury trial, of conspiracy to 
commit health care fraud and wire fraud, five counts of health care fraud, conspiracy to commit 
money laundering, and eleven counts of money laundering.  As part of the scheme, the 
conspirators exploited vulnerable drug addicts, falsified paperwork, and entered into various 
kickback arrangements, all in order to receive millions of dollars of falsely and fraudulently 
obtained funds for their own personal use and benefit.  The owner operated the three facilities 
from in or around June 2016 through May 2019.  At trial, the Government emphasized that the 
defendant provided unlawful inducements to the approximately 500 patients consisting of free 
airline travel, housing, vapes, manicures, cash, and failure to collect patient responsibilities for 
copayments and deductibles. The facilities also billed for medically unnecessary therapeutic 
services consisting of therapy and urine analyses, the former having not been provided but billed 
by defendants substance use clinics.  From June 2016 through May 2019, the Government 
attributed approximately $38.0 million in fraudulent billing submitted by owners clinics, which 
resulted in the reimbursement of over $6.0 million in payments. 
 
   
 
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DEPARTMENT OF HEALTH AND HUMAN SERVICES 
  
Office of Inspector General 
 
The HHS-OIG mission is to protect the integrity of HHS programs and the health and welfare of 
the people they serve.  As established by the Inspector General Act of 1978, HHS-OIG is an 
independent and objective organization that fights fraud, waste, and abuse and promotes 
efficiency, economy, and effectiveness in HHS programs and operations.  
 
HHS-OIGs vision is to drive positive change in HHS programs and in the lives of the people 
they serve.  HHS-OIG pursues this vision through independent oversight of HHS programs and 
operations and by providing HHS and Congress with objective, reliable information for use in 
policymaking.  HHS-OIG assesses the Departments performance, administrative operations, and 
financial stewardship.  HHS-OIG also evaluates risks to HHS programs and recommends 
recovery of misspent funds and program improvements.  HHS-OIGs law enforcement 
component investigates fraud and abuse of HHS programs and holds wrongdoers accountable for 
their actions.  In addition to safeguarding federal funds, HHS-OIG takes oversight and 
enforcement action to promote the safety and quality of services delivered by HHS programs.   
 
As the leading oversight agency specializing in health care fraud, HHS-OIG employs a multi-
disciplinary approach and uses data-driven decision-making to produce outcome-focused results.   
 
HHS-OIG strives to be a flexible and efficient organization that adapts to the needs of the times.  
HHS-OIG deploys resources as optimally as possible to keep pace with the fast-changing nature 
of health care programs and the corresponding changes in fraud, waste, and abuse.  To do so, 
HHS-OIG leverages sophisticated data analysis to identify and target potential fraud schemes 
and areas of program waste and abuse and to provide quality, timely, and actionable data to 
frontline staff, as well as to its government and, as appropriate, private sector partners.  HHS-
OIG combines data analysis, field intelligence, and state-of-the-art investigative techniques to 
combat fraud and abuse.  HHS-OIG also continues to modernize its infrastructure capacity to 
deliver high-quality, timely, actionable data to produce these results.  HHS-OIG is focused on 
developing data-driven key performance indicators and has helped achieve results in priority 
areas and measures that further the goals of HHS-OIGs work. 
 
With respect to HCFAC funds, HHS-OIG focuses on combating Medicare and Medicaid fraud, 
waste, and abuse, including in priority areas such as protecting beneficiaries from prescription 
drug abuse, including opioid abuse; enhancing program integrity in noninstitutional care settings, 
such as home health and hospice care; and strengthening Medicaid program integrity, including 
working with state partners to enhance the effectiveness of the MFCUs.  HHS-OIG is also 
strengthening oversight of nursing homes, Medicare Advantage (MA) managed care plans, 
Medicaid managed care programs, value-based models, Medicare hospital payments efficiency, 
telehealth and other remote care expansion, and cybersecurity.   
 
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A certain portion of the funds appropriated under HIPAA are, by law, set aside for the Medicare 
and Medicaid activities of HHS-OIG.  In FY 2021, the Secretary and the Attorney General 
jointly allotted $213.9 million to HHS-OIG.  HHS-OIG was allocated an additional $20.2 million 
in HCFAC mandatory funds from the Secretary.  Additionally, Congress appropriated 
$99.0 million in discretionary funding for HHS-OIG HCFAC activities. 
 
Responding to the COVID-19 Pandemic  
 
Responding to COVID-19 remains an unprecedented challenge for HHS and for the delivery of 
health care and human services to the American people.  As the COVID-19 pandemic response 
and recovery evolves in the United States, HHS-OIGs oversight evolves as well.  It will be 
critical to understand the efficacy of pandemic response efforts over time and the lessons learned 
for future pandemics and broader emergency preparedness.  HHS-OIG has used innovative 
approaches to provide independent, objective information to decisionmakers and other 
stakeholders about response and recovery efforts.  HHS-OIGs COVID-19 oversight work 
pursues the priorities consistent with our Strategic Plan:  (1) protect people, (2) protect funds,  
(3) protect infrastructure, and (4) promote the effectiveness of HHS programsnow and into the 
future.  HHS-OIG is using risk assessment and data analytics to identify, monitor, and target 
potential fraud, waste, and abuse affecting HHS programs and beneficiaries and to promote the 
effectiveness of HHSs COVID-19 response and recovery programs, including Medicare and 
Medicaid programs and beneficiaries.  Oversight efforts include close coordination with key 
government partners, including the Pandemic Response Accountability Committee. 
 
Additional information about the HHS-OIG COVID-19 Response Strategic Plan, fraud alert, and 
work related to COVID-19 is available online on the COVID-19 Portal.   
  
HHS-OIG Priority Outcomes 
 
According to USA Spending, HHS in FY 2021 had some of the highest expenditures among all 
federal agencies at $2.8 trillion, including increased supplemental funding for the pandemic 
response.  With such a large and diverse portfolio to oversee, HHS-OIG sets priority outcomes to 
achieve the greatest impact across HHSs many programs.  In the FY 2022 Presidents Budget, 
HHS-OIG included its key performance indicators that align with HHS-OIGs priority outcomes.  
HHS-OIGs current priority outcome areas were selected based on past and ongoing work, top 
challenges facing HHS as identified annually by HHS-OIG, the ability to collect data, and the 
ability to influence outcomes.  HHS-OIGs priority outcome areas fall into two broad categories:  
 
1.  Minimize risks to beneficiaries. 
  Protect beneficiaries from prescription drug abuse. 
  Promote patient safety and accuracy of payments in home and community 
settings. 
 
2.  Safeguard programs from improper payments and fraud. 
  Strengthen Medicaid protections against fraud and abuse. 
 
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During FY 2021, HHS-OIG leadership met to assess and revise our priority outcome approach 
based on our recently revised Strategic Plan.  Multidisciplinary teams identified progress they 
plan to achieve for these important areas.  These new and revised Priority Outcomes teams have 
been developing approaches to achieve results as well as identifying metrics that can be used to 
track progress.  More details on the new priority outcomes will be provided in the FY 2023 
HHS-OIG budget justification. 
 
Results 
 
HHS-OIG delivers financial savings to taxpayers while protecting the health and welfare of 
beneficiaries and safeguarding programs from mismanagement and fraud.   
 
In FY 2021, HHS-OIG investigations resulted in 504 criminal actions against individuals or 
entities that engaged in crimes related to Medicare and Medicaid, as well as 669 civil actions that 
included false claims and unjust-enrichment lawsuits filed in federal district court, CMP 
settlements, and administrative recoveries related to provider self-disclosure matters.  In 
addition, during FY 2021 HHS-OIG excluded a total of 1,689 individuals and entities, the details 
of which appear below. 
 
HHS-OIGs investigations, audits, and evaluations frequently reveal vulnerabilities, misspent 
funds, or incentives for questionable or fraudulent practices in agency programs or 
administrative processes.  HHS-OIG makes recommendations to agency managers to address 
these vulnerabilities as required by the Inspector General Act.  In turn, agency managers may 
recommend legislative proposals or other corrective actions that, when enacted or implemented, 
close loopholes and reduce improper payments or conduct.  The savings from these efforts can 
be substantial.  For FY 2021, potential savings from legislative and administrative actions that 
were supported by HHS-OIG recommendations were estimated by third parties, such as the 
Congressional Budget Office or actuaries within HHS, to be $2.7 billion$2.2 billion in 
Medicare savings and $497.0 million in savings to the federal share of Medicaid.  HHS-OIGs 
expected recoveries from its involvement in health care audits and investigations totaled more 
than $4.1 billion, which resulted in an ROI of about $12.00 to $1.00.14  
 
Additional information about savings achieved through such policy and procedural changes may 
be found in the HHS-OIG fall Semiannual Report to Congress that appears online at 
https://oig.hhs.gov.     
 
14 This ROI uses a 3-year average of expected recoveries, fines, penalties, and stolen and misspent funds relating to 
HHS-OIGs health care oversight that is compared to HHS-OIGs annual obligations.  This ROI differs from the 
HCFAC ROI, which uses actual dollars returned to the government.  HHS-OIG expects the ROI to fluctuate over 
time due to factors including the types and sizes of settlements and identified disallowances, complexity of schemes 
that are subject to HHS-OIG scrutiny in a given year, and heightened focus on high-value but low-dollar work 
addressing patient safety and quality of care. 
 
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Enforcement 
 
HHS-OIG works with its law enforcement partners to conduct criminal and civil investigations 
involving the Medicare and Medicaid programs and participates in settlements of False Claims 
Act cases, including settlements reached through negotiations of Corporate Integrity Agreements 
(CIAs).  HHS-OIG works with the MFCUs to address fraud and abuse in the Medicaid program.  
In addition to investigating criminal and civil matters, HHS-OIG imposes CMPs for a variety of 
health care-related offenses. 
 
Strike Force Operations 
In FY 2021, HHS-OIG continued to staff and support Strike Force operations working in 
conjunction with the DOJ Criminal Divisions Fraud Section, local USAOs, the FBI, and state 
and local law enforcement agencies.  HHS-OIG has assigned agents to Strike Forces in Miami 
and Tampa, Florida; Dallas and Houston, Texas; Los Angeles, California; Detroit, Michigan; 
Brooklyn, New York; Baton Rouge and New Orleans, Louisiana; Chicago, Illinois; and Newark, 
New Jersey/Philadelphia, Pennsylvania; along with a Corporate Strike Force in Washington, 
D.C.  HHS-OIG supports Strike Force operations by providing investigative, analytic, and 
forensic resources.   
 
In addition to fighting other fraudulent conduct, the Strike Forces have effectively investigated 
and prosecuted individuals and entities that do not provide legitimate health care services but 
exist solely for the purpose of defrauding Medicare and other government health care programs.  
For example, in September 2021 a nationwide enforcement action resulted in 138 charged 
defendants across 51 federal districts, including more than 42 doctors, nurses, and other licensed 
medical professionals.  These defendants were collectively charged with submitting more than 
$1.4 billion in allegedly false and fraudulent claims to federal health care programs and private 
insurers, including more than $1.1 billion connected to telemedicine $29.0 million in COVID-19 
health care fraud, $133.0 million connected to substance use treatment facilities or sober 
homes, and $160.0 million connected to other health care fraud and illegal opioid distribution 
schemes across the country.  The continued support of Strike Force operations is a top priority 
for HHS-OIG.  
 
Combating the Opioid Epidemic 
Fighting the opioid crisis and protecting beneficiaries from prescription drug abuse are among 
HHS-OIGs top priorities.  Opioid-related matters comprise substantial portion of HHS-OIGs 
investigations.  In addition to the opioid related nationwide enforcement actions, in FY 2021 
HHS-OIG excluded 114 providers based on conduct related to opioid diversion and abuse. 
 
Program Exclusions 
One important mechanism that HHS-OIG uses to safeguard program beneficiaries and help 
ensure the quality of care provided to them is excluding providers and suppliers who have 
engaged in crimes related to Medicare or Medicaid, patient abuse or neglect, financial 
misconduct, controlled substances, or as a result of license revocation.  This list of conduct is not 
exhaustive but identifies the most prevalent cases underlying HHS-OIGs exclusions of 
individuals or entities.  The effect of an HHS-OIG exclusion is that no federal health care 
 
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program payment may be made for any items or services furnished:  (1) by an excluded person 
or (2) at the medical direction or on the prescription of an excluded person.  HHS-OIG 
completed the deployment of a new service for MFCUs to report convictions through a central 
web-based portal for exclusion.  HHS-OIG is also responsible for reinstating providers who 
apply and have met the requirements of their exclusions. 
 
In FY 2021, HHS-OIG excluded a total of 1,689 individuals and entities.  In addition to those 
mentioned in the Enforcement Actions section above, exclusion actions by HHS-OIG included: 
 
  In January 2021, HHS-OIG excluded an executive of a drug company in Massachusetts 
for a minimum period of 28 years based on the executives racketeering conspiracy 
conviction.  From approximately September 2012 to about March 2015, this individual 
participated in a scheme that bribed and provided kickbacks to prescribers to increase 
sales of a liquid formulation of fentanyl.  The court sentenced this individual to 12 
months and 1 day of incarceration and ordered restitution of approximately $5.0 million.  
The action of this individual caused providers to prescribe greater quantities of a potent 
opioid, thus causing substantial, real, and lasting harm to the patients of the bribed 
providers.   
  
  In March 2021, HHS-OIG excluded a nurse aide working at a nursing home in Texas for 
a minimum period of 75 years based on the aides conviction on two counts of 
aggravated sexual assault of an elderly or disabled person after raping a non-verbal, 
elderly patient suffering from dementia.  The nurse aide was sentenced to life in prison.   
  
  In May 2021, HHS-OIG excluded a private business owner in Pennsylvania for a 
minimum period of 95 years based on the business owners conviction related to theft of 
government property.  From about 1999 to about October 2014, this individual 
participated in a scheme that promised to return expired drugs from the individuals 
businesss health care client facilities (hospitals, pharmacies, long term care facilities) in 
exchange for a fee.  The business owner then laundered the proceeds of the fraud by 
keeping the profits that this entity received for returning the expired drugs. More than 
13,000 clients were impacted by this fraudulent activity.  The court ordered the business 
owner to forfeit $114,832,400 and imposed a sentence of five years of incarceration.    
  
  In July 2021, HHS-OIG excluded a medical doctor in Wyoming for a minimum period of 
45 years based on the doctors convictions related to unlawful distribution of opioids.  
From about January 2011 to about November 2016, the doctor prescribed addictive 
opioids for payments in small, rural communities located in and around Arizona, 
Wyoming, and the Wind River Indian Reservation, specifically targeting vulnerable 
addicts for opioid prescriptions.  The doctors conduct resulted in the death of an 
individual, and the court sentenced the doctor to 300 months of incarceration.  In 
addition, the Arizona Board of Medicine suspended the individuals license to practice as 
a medical doctor.  
  
 
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  In August 2021, HHS-OIG excluded a pharmaceutical entity in Virginia for a minimum 
period of 80 years based on its conviction for knowingly and willfully making materially 
false statements relating to health care matters.  From about December 2012 to about 
December 2015, this entity marketed a specific Suboxone product to physicians and 
health care programs using false and misleading claims.  In addition, employees and 
agents of the entity falsely informed the Massachusetts Medicaid program (MassHealth) 
that the Suboxone product had a safety benefit related to unintended pediatric exposure 
compared to other drugs in order to persuade MassHealth to pay for the drug.  This entity 
also failed to correct inaccurate and misleading statements.  The entity caused an 
estimated loss of $244,165,000 based on its conduct. 
 
Civil Monetary Penalties 
HHS-OIG has the authority to seek CMPs, assessments, and exclusions under the Civil Monetary 
Penalties Law (CMPL) against an individual or entity based on a wide variety of prohibited 
conduct.  HHS-OIG brings CMP cases to emphasize HHS-OIG guidance, enhance HHS-OIG 
work such as audits and evaluations, fill enforcement gaps, and level the playing field for 
compliant providers.  HHS-OIG uses its CMP authorities in three common ways:  (1) false 
claims and kickback affirmative enforcement, (2) Emergency Medical Treatment and Labor Act 
(EMTALA) enforcement, and (3) the Self-Disclosure Protocol.  In FY 2021, HHS-OIG 
concluded cases involving more than $79.9 million in CMPs and assessments. 
 
Affirmative Litigation and Exclusion 
HHS-OIG may seek a CMP or exclusion against an individual or entity that presents claims to 
federal health care programs that the individual or entity knows or should know are for items or 
services that were not provided as claimed or were false or fraudulent.  HHS-OIG may also seek 
a CMP or exclusion against an individual or entity that knowingly and willfully violates the AKS 
by:  (1) offering or paying remuneration, directly or indirectly, to induce referrals of federal 
health care program business; or (2) soliciting and receiving remuneration, directly or indirectly, 
in return for referrals of federal health care program business.  In FY 2021, HHS-OIG recovered 
more than $9.2 million in false claims and kickback affirmative enforcement actions.  HHS-OIG 
also excluded 39 individuals and entities from participation in federal health care programs based 
on allegations of false claims and kickbacks.   
 
Affirmative litigation examples include: 
 
  In April 2021, HHS-OIG entered a settlement with a physician and its physicians 
(collectively, Respondents) in Florida for $1,082,182.50.  The settlement resolved 
allegations that the Respondents submitted claims for comprehensive clinical pathology 
consultations that were for services provided:  (1) by pharmacists in a hospital setting that 
did not meet the requirements to be billed incident to a physicians professional 
services; and (2) to hospital inpatients on consecutive days of the patients stay where no 
consultation request had been made, no written narrative report by a consultant 
pathologist was produced, and no exercise of medical judgment by a consultant 
pathologist was required. 
 
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  In August 2021, HHS-OIG entered a settlement with an ambulance service entity in 
Massachusetts for $704,706.62 to resolve allegations that the entity presented claims to 
Medicare Part B for ambulance transportation to and from SNFs when such 
transportation was already covered by the SNF consolidated billing payment under 
Medicare Part A. 
Patient Dumping 
HHS-OIG may also seek a CMP against any hospital that negligently violates its obligations 
under EMTALA, known as the patient dumping statute, which requires a hospital to stabilize 
and treat, or appropriately transfer if the hospital lacks the specialized capabilities necessary to 
stabilize the person, anyone who presents to an emergency department with an emergency 
medical condition.  In FY 2021, HHS-OIG recovered $125,000 in cases under the EMTALA 
statute.  Patient dumping examples include: 
 
  In December 2020, a regional medical center (RMC) entered into a $100,000 settlement 
with HHS-OIG.  The settlement resolved allegations based on the following facts:  On 
January 10, 2016, a person came to the RMCs emergency department complaining of 
chest pain, nausea, vomiting, and diarrhea.  The RMC failed to perform an adequate 
screening exam, and the person waited 3 hours and 44 minutes in the waiting room while 
his symptoms worsened with no treatment.  The person left the RMC and went to another 
hospital.  The second hospital diagnosed the person with triple vessel disease, performed 
an emergency heart catheterization, and sent the person back to the RMC for an urgent, 
triple coronary bypass surgery.  The RMC paid $100,000the maximum penaltyto 
resolve these allegations.  
 
Self-Disclosure Protocol  
HHS-OIG maintains the Self-Disclosure Protocol (the Protocol) whereby providers may 
voluntarily identify, disclose, and resolve instances of potential fraud involving federal health 
care programs for resolution under the CMPL.  The Protocol incentivizes persons to detect and 
prevent fraud internally and to bring potential fraud to HHS-OIGs attention.  Under the 
Protocol, HHS-OIG provides these persons with speedy resolutions, reduced CMPs, and other 
benefits compared to affirmative cases brought by HHS-OIG or DOJ for similar conduct.  HHS-
OIG collected $70.5 million under the Protocol in FY 2021.  Self-disclosure examples include: 
 
  In October 2020, a Massachusetts hospital self-disclosed conduct to HHS-OIG and paid 
$6,952,847 for allegedly violating the CMPL.  HHS-OIG alleged that the hospital failed 
to maintain physician certifications, recertifications, and treatment plans for inpatient 
psychiatry services in violation of Medicare billing requirements.  The hospital retained a 
third-party contractor who was responsible for managing the hospitals inpatient 
psychiatric unit, including maintaining proper medical records for patients in the unit.  
 
  In February 2021, a hospital located in Virginia self-disclosed conduct to OIG and paid 
$6,050,628 for allegedly violating the CMPL, specifically provisions applicable to 
physician self-referrals and kickbacks.  HHS-OIG alleged that the hospital paid 
 
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remuneration to two medical groups in the form of office space, office staff, and services 
rendered under call coverage arrangements.  
 
  In April 2021, a radiation therapy entity in Colorado self-disclosed conduct to HHS-OIG 
and paid $3,569,645.76 for allegedly violating the CMPL.  HHS-OIG alleged that the 
entity submitted false claims for certain radiation and oncology services involving 25 
different CPT codes, including radiation therapy planning and simulation services, also 
known as physics and dosimetry, and evaluation and management services provided to 
patients undergoing radiation therapy. 
 
Corporate Integrity Agreements and Enforcement 
Many health care providers elect to settle their cases before litigation.  HHS-OIG provides 
information on its website that identifies how it evaluates future risk to federal health care 
programs from providers who settle health care fraud cases (called the Fraud Risk Indicator).   
As part of the settlements, providers often agree to enter into CIAs with HHS-OIG to avoid 
exclusions from Medicare, Medicaid, and other federal health care programs.   
 
Under a CIA, a provider commits to establishing a compliance program and taking other 
specified steps to ensure future compliance with federal health care program rules.  The 
compliance programs are designed, in part, to prevent future fraud.  HHS-OIG monitors 
providers compliance with these agreements.  Parties to CIAs are required to disclose certain 
reportable events which may implicate HHS-OIGs CMP authorities.  HHS-OIG may impose 
penalties on entities that fail to comply with the requirements of their CIAs, as shown below.  
HHS-OIG collected more than $500,000 through CIA enforcement.  CIA enforcement examples 
include: 
 
  In September 2021, HHS-OIG excluded a prosthetics entity in Louisiana from 
participation in all federal health care programs based on a material breach of the entitys 
integrity agreement (IA) with HHS-OIG.  The entity failed to submit an implementation 
report, retain an Independent Review Organization, and submit the claims review reports 
required by the IA.  The entity was previously excluded in March 2021 for default of its 
payment obligations under its August 2020 settlement agreement with the United States.  
 
  In April 2021, a California management corporation and a facility it manages entered into 
a $121,783.31 settlement with HHS-OIG.  HHS-OIG alleged that the facility employed 
an individual who it knew or should have known had been excluded from participation in 
the California Medicaid program (Medi-Cal) and that no Medi-Cal payments could be 
made for items or services the individual furnished. 
 
Audits and Evaluations 
HHS-OIG promotes the economy, effectiveness, and efficiency of HHS programs through audits 
and evaluations.  HHS-OIG uses a dynamic, data-driven work planning process and makes 
adjustments throughout any one year to meet evolving priorities and to anticipate and respond to 
emerging issues with the resources available.  HHS-OIGs work is informed by mandatory 
 
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requirements set forth in laws, regulations, or other directives; requests made or concerns raised 
by Congress, HHS management, or the Office of Management and Budget; or alignments with 
strategic goals, etc.  With respect to Medicare and Medicaid, HHS-OIG uses a risk assessment 
approach to focus oversight on protecting programs and patients from fraud and ensuring sound 
program management, payment accuracy, patient safety, and quality of care.  
 
In FY 2021, HHS-OIG issued 162 audit reports and 46 evaluations, resulting in 506 new 
recommendations issued to HHS operating divisions, HHS grantees, and other entities.  During 
this same time period, 432 OIG recommendations were implemented.    
 
Select examples of HHS-OIGs audit and evaluation findings in FY 2021 are listed below and 
organized by HHS-OIGs two broad priority outcomes to:  (1) minimize risks to beneficiaries, 
and (2) safeguard programs from improper payments and fraud. 
 
Minimize Risks to Beneficiaries 
CMSs Controls Related to Hospital Preparedness for an Emerging Infectious Disease Were 
Well-Designed and Implemented but Its Authority Is Not Sufficient for It To Ensure 
Preparedness at Accredited Hospitals.  CMSs controls were well-designed and implemented, 
but CMSs authority is not sufficient for it to fulfill its responsibility to ensure that accredited 
hospitals maintained quality and safety during an emerging infectious disease emergency.  In 
February 2019, although CMS announced that it was critical for all hospitals to plan for 
emerging infectious diseases, CMS will not be able to determine that all accredited hospitals had 
updated emergency preparedness plans to include this preparedness until 2022 due to 
accreditation organizations quality and safety inspection cycles.  When COVID-19 emerged in 
the United States, CMS requested (but could not require) accreditation organizations to perform 
special targeted infection control surveys to help accredited hospitals prepare for COVID-19 
patients.  Accreditation organizations performed no such special surveys and, as of August 17, 
2020, state survey agencies had performed these surveys at only about 13 percent of accredited 
hospitals and had not performed any in 13 states because of CMSs limited authority over 
accredited hospitals.  As a result of these limitations, CMS could not ensure that accredited 
hospitals would continue to provide quality care and operate safely during the COVID-19 PHE, 
and cannot ensure quality and safety at accredited hospitals when a future emerging infectious 
disease threatens the United States.  (A-02-21-01003) 
 
CMSs COVID-19 Data Included Required Information From the Vast Majority of Nursing 
Homes, but CMS Could Take Actions To Improve Completeness and Accuracy of the Data.  
CMSs COVID-19 data for nursing homes included the required data from the vast majority of 
nursing homes (e.g., the number of confirmed COVID-19 cases among residents); however, the 
data were not complete or accurate for some nursing homes.  Specifically, for 775 of the 15,388 
nursing homes (about five percent), CMSs COVID-19 data:  (1) did not include all of the 
COVID-19 data that nursing homes were required to report, and (2) were not complete or 
accurate after CMS performed its quality assurance checks (e.g., the number of confirmed 
COVID-19 cases among residents may have been under- or over-reported).  These conditions 
occurred in part because, CMSs quality assurance checks were not always effective in ensuring 
 
44 
   
the accuracy and completeness of the COVID-19 data for nursing homes.  In addition, two areas 
were identified in which CMS could take additional actions to help ensure that its COVID-19 
data are complete and accurate.  First, CMS could provide technical assistance to all nursing 
homes that fail its quality assurance checks.  Second, CMS could make additional efforts to 
ensure that:  (1) CMSs and states COVID-19 data elements (e.g., confirmed COVID-19 cases 
among residents) are comparable (i.e., CMS and states could use the same data elements), and 
(2) the reported data are not substantially different.  When CMSs COVID-19 data are complete 
and accurate, federal and state officials and other stakeholders may be able to more effectively 
monitor trends in infection rates and develop public health policies when making decisions about 
how to ensure the health and safety of nursing home residents and staff.  (A-09-20-02005) 
 
Medicare Lacks Consistent Oversight of Cybersecurity for Networked Medical Devices in 
Hospitals.  Medicare accreditation organizations, which derive their requirements from the 
Conditions of Participation, rarely use their discretion to examine the cybersecurity of networked 
devices during hospital surveys.  Our findings can help CMS identify ways to add consistent 
oversight of networked medical device cybersecurity in hospitals.  Subsequent to the report 
release, CMS concurred with the recommendation to identify and implement an appropriate way 
to address cybersecurity of networked medical devices in its quality oversight of hospitals, in 
consultation with HHS partners and others.  (OEI-01-20-00220) 
 
Onsite Surveys of Nursing Homes During the COVID-19 Pandemic:  March 23-May 30, 2020.  
In response to the COVID-19 pandemic, CMS adjusted its oversight approach by standardizing 
surveys, prioritizing the most serious complaints, elevating attention on infection control, and 
developing a new survey tool to ensure that nursing homes implement actions to prevent the 
spread of COVID-19.  However, these changes have resulted in less comprehensive oversight of 
nursing homes and residents.  Our findings can help CMS enhance its approach to nursing home 
oversight.  We recommended that CMS:  (1) assess the results of infection control surveys and 
revise the survey as appropriate, (2) work with states to help overcome challenges with personal 
protective equipment (PPE) and staffing, and (3) clarify expectations for states to complete 
backlogs of standard surveys and high-priority complaint surveys.  CMS did not explicitly 
concur with our first and third recommendations but stated it has already taken steps to 
implement those recommendations.  CMS did not concur with our second recommendation.  
(OEI-01-20-00430) 
 
Opioid Use in Medicare Part D During the Onset of the COVID-19 Pandemic.  As the pandemic 
took hold, each of about 5,000 Medicare beneficiaries per month had an opioid overdose.  
Almost a quarter of a million beneficiaries received high amounts of opioids through Part D in 
the first eight months of 2020.  At the same time, the number of beneficiaries receiving drugs for 
treatment of opioid use disorder increased slightly.  It is critical to continue to monitor the use of 
opioids and drugs for the treatment of opioid use disorder in Part D as COVID-19 presents new 
challenges for beneficiaries taking these drugs. (OEI-02-20-00400) 
 
Medicare Beneficiaries Hospitalized With COVID-19 Experienced a Wide-Range of Serious, 
Complex Conditions.  The wide-ranging and complex conditions of Medicare beneficiaries 
 
45 
   
hospitalized with COVID-19 can create substantial challenges in meeting the needs of these 
patients, particularly during surges in hospitalizations.  While almost all of these beneficiaries 
were treated for acute respiratory issuessuch as viral pneumoniamany were treated for other 
types of serious conditions, including acute kidney failure, heart attacks, and sepsis.  More than 
half of the beneficiaries hospitalized with COVID-19 received intensive care or mechanical 
ventilation.  We also found that beneficiaries who were dually eligible, Black, Hispanic, or 
elderly were hospitalized at disproportionately higher rates than nonelderly Whites.  Gaining a 
better understanding of Medicare beneficiaries hospitalized with COVID-19including the 
conditions for which they were being treated and demographic makeupcan assist federal, state, 
and local efforts during the COVID-19 pandemic.  (OEI-02-20-00410) 
 
COVID-19 Had a Devastating Impact on Medicare Beneficiaries in Nursing Homes During 
2020.  Nursing home residents have been particularly affected by COVID-19 as they are 
predominantly elderly, tend to have underlying conditions, and live in close quarters.  However, 
data on the number of nursing home residents who were diagnosed with COVID-19 or likely 
COVID-19, particularly data from early in the pandemic, have not been readily available.  
Nursing homes are not required to report cases and deaths that occurred before May 8, 2020.  
OIG found that two-in-five Medicare beneficiaries in nursing homes were diagnosed with either 
COVID-19 or likely COVID-19 in 2020.  Almost 1,000 more beneficiaries died per day in April 
2020 than in April 2019.  Overall mortality in nursing homes increased to 22 percent in 2020 
from 17 percent in 2019.  About half of the Black, Hispanic, and Asian beneficiaries in nursing 
homes had or likely had COVID-19, and 41 percent of White beneficiaries did.  Understanding 
the pandemics impact on nursing home residents is necessary if tragedies like this are to be 
averted.  (OEI-02-20-00490) 
 
CMS Use of Data on Nursing Home Staffing:  Progress and Opportunities To Do More.  CMS 
has taken important steps to build and use a new data source for information on nursing home 
staffing but has opportunities to better leverage this information.  HHS-OIGs findings can help 
CMS identify ways to better inform consumers and improve oversight of staffing in nursing 
homes.  HHS-OIG recommended that CMS:  (1) provide data to consumers on nursing staff 
turnover and tenure, as required by federal law; (2) ensure the accuracy of non-nurse staffing 
data used on Care Compare; (3) consider residents levels of need when identifying nursing 
homes for weekend inspections; and (4) take additional steps to strengthen oversight of nursing 
home staffing.  CMS concurred with all four of our recommendations.  (OEI-04-18-00451) 
 
Opioids in Medicaid:  Concerns About Opioid Use Among Beneficiaries in Six Appalachian 
States.  More than 450 of these beneficiaries were at serious risk of opioid misuse or overdose. 
Of the 10 million Medicaid beneficiaries in 6 Appalachian states in 2018, 1,044,558 beneficiaries 
(about 1 in 10) received at least 1 prescription opioid.  Some 5,897 of these beneficiaries 
received high amounts of opioids, 463 of these beneficiaries were at serious risk of opioid misuse 
or overdose, and 19 prescribers had questionable opioid prescribing practices.  Previous HHS-
OIG work found that beneficiaries at serious risk may experience serious outcomes related to 
opioid use, including opioid use disorder or overdose.  (OEI-05-19-00410) 
 
 
46 
   
CMS Could Improve the Data It Uses To Monitor Antipsychotic Drugs in Nursing Homes.  CMS 
has taken important steps to reduce the use of antipsychotic drugs in nursing homes and could 
further that progress by collecting more complete data on residents use of these drugs.  HHS-
OIG found that CMSs use of the Minimum Data Set (MDS) as the sole data source to count the 
number of nursing home residents receiving antipsychotic drugs may not always provide 
complete information.  This means that some residents use of antipsychotics may not have been 
detected by CMSs quality measure intended to monitor the use of these drugs.  HHS-OIGs 
findings suggest that CMS could enhance the information it uses to monitor antipsychotics in 
nursing homes by using additional data sources in its measurements of this issue, which is 
complex and critical for resident health and safety.  HHS-OIG recommended that CMS take 
additional steps to validate the information reported in MDS assessments and supplement the 
data it uses to monitor the use of antipsychotic drugs in nursing homes.  CMS concurred with 
both of our recommendations.  (OEI-07-19-00490) 
 
Update on Oversight of Opioid Prescribing and Monitoring of Opioid Use:  States Have Taken 
Action To Address the Opioid Epidemic.  In July 2019, HHS-OIG issued a report summarizing 
and comparing information provided by eight selected states:  Nebraska, Nevada, New 
Hampshire, Tennessee, Texas, Utah, Washington, and West Virginia.  For this update to the 
original audit, we selected an additional three states in the Appalachian region, which is an area 
with high rates of opioid overdose deaths:  Alabama, Kentucky, and Ohio.  The selected states 
have created policies and procedures and passed laws and regulations related to opioids and are 
using opioid-related data to perform both data analytics and outreach to providers and patients.  
The states have implemented a number of opioid-related prevention, detection, and treatment 
programs and have taken many other actions to address the opioid epidemic.  (A-09-20-01000)   
 
Iowa Should Improve Its Oversight of Selected Nursing Homes Compliance With Federal 
Requirements for Life Safety and Emergency Preparedness.  Iowa did not ensure that selected 
nursing homes in the state that participated in the Medicare or Medicaid programs complied with 
CMS requirements for life safety and emergency preparedness.  During our onsite inspections, 
we identified deficiencies in areas related to life safety and emergency preparedness at all 20 
nursing homes we reviewed.  We found 122 instances of noncompliance with life safety 
requirements and 133 instances of noncompliance with emergency preparedness requirements. 
As a result, residents at the 20 nursing homes were at increased risk of injury or death during a 
fire or other emergency.  The identified areas of noncompliance occurred because Iowa did not 
have a standardized life safety training program for all staff (not currently required by CMS).  In 
addition, Iowa did not adequately follow up on deficiencies previously cited or require nursing 
homes or inspection contractors to:  (1) tag systems that are critical to the health and safety of 
nursing home residents when these systems may not work as required, and (2) notify the state.  
(A-07-19-03238) 
  
New York Did Not Fully Comply With Federal and State Requirements for Reporting and 
Monitoring Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities.  
New York did not ensure that providers fully complied with federal waiver and state 
requirements for reporting and monitoring critical incidents involving Medicaid beneficiaries 
with developmental disabilities residing in community-based settings.  Of the 30 incidents of 
 
47 
   
potential abuse and neglect in our sample, 23 incidents were properly reported and investigated; 
however, seven incidents were not.  Because incidents of potential abuse and neglect were not 
properly reported or investigated, beneficiaries were put at an increased risk of harm.  Of the 48 
reported and substantiated incidents of abuse and neglect in our judgmental sample, we found 
that the associated providers complied with the critical incident reporting and monitoring 
requirements.  (A-02-17-01026) 
  
Safeguard Programs From Improper Payments and Fraud 
Medicare Advantage Compliance Audit of Diagnosis Codes That Humana, Inc., (Contract 
H1036) Submitted to CMS.  HHS-OIG found that Humana did not submit some diagnosis codes 
to CMS for use in the risk adjustment program in accordance with federal requirements.  HHS-
OIG identified some diagnosis codes that Humana submitted to CMS but that were not supported 
in the medical records.  HHS-OIG also identified diagnosis codes that were supported in the 
medical records that Humana should have submitted to CMS but did not.  As a result, we 
estimated that Humana received at least $197.7 million in net overpayments for 2015.  (A-07-16-
01165) 
 
Hospitals Did Not Comply With Medicare Requirements for Reporting Cardiac Device Credits. 
HHS-OIG found that hospitals did not comply with Medicare requirements for reporting cardiac 
device credits, resulting in potential Medicare overpayments.  HHS-OIG found that hospitals 
likely did not comply with Medicare requirements associated with reporting manufacturer credits 
for recalled or prematurely failed cardiac medical devices.  As a result, 911 hospitals received 
payments of $76.0 million rather than the $43.0 million they should have received, resulting in 
$33.0 million in potential overpayments.  It was determined that Medicare contractors made 
these overpayments because they do not have a postpayment review process to ensure that 
hospitals reported manufacturer credits for cardiac medical devices.  (A-01-18-00502) 
  
CMS and Its Contractors Did Not Use Comprehensive Error Rate Testing Program Data To 
Identify and Focus on Error-Prone Providers. HHS-OIG found that CMS and its contractors did 
not use Comprehensive Error Rate Testing (CERT) data to identify and focus on error-prone 
providers for review and corrective action.  Using CERT data, HHS-OIG identified 100 error-
prone providers from 2014 through 2017.  Of the $5.8 million reviewed by CERT for these 
providers, $3.5 million were incorrectly paid, which was an improper payment rate of 60.7 
percent.  We determined that during the same period, Medicare made $19.1 billion in fee-for-
service (FFS) payments to these 100 error-prone providers.  (A-05-17-00023) 
  
CMS Did Not Ensure That Medicare Hospital Payments for Claims That Included Medical 
Device Credits Were Reduced in Accordance With Federal Regulations, Resulting in as Much as 
$35 Million in Overpayments.  CMS did not ensure that Outpatient Prospective Payment System 
(OPPS) payments for claims that included medical device credits were reduced in accordance 
with federal regulations.  These regulations require the use of the device offset amount100 
percent of the device offset amount for each without cost or full credit replacement device and 50 
percent of the device offset amount for each partial credit replacement devicewhen calculating 
the reduced OPPS payment amount.  By following the Medicare Claims Processing Manual (the 
 
48 
   
Manual) instructions, Medicare administrative contractors (MACs) did not comply with these 
regulations when calculating the claims that we reviewed.  As a result, Medicare made estimated 
overpayments of as much as $35.4 million to hospitals for our audit period.  This error occurred 
because as part of federal rulemaking in CY 2014, CMS announced its intention to update 
federal regulations in order to reduce OPPS payments for replaced medical devices.  This 
intended update was not finalized in the text of the federal regulations.  However, CMS revised 
the relevant language in its guidancethe Manual.  (A-07-19-00560) 
 
Medicare Advantage Organizations Are Missing Opportunities To Use Ordering Provider 
Identifiers To Protect Program Integrity.  In MA, encounter data lack National Provider 
Identifiers (NPIs) for providers who order and/or refer durable medical equipment, prosthetics, 
orthotics, and supplies (DMEPOS); clinical laboratory services; imaging services; and home 
health services.  (Encounter data are the detailed information that MA organizations (MAOs) 
submit to CMS regarding each service provided to MA beneficiaries.)  Almost half of MAOs 
that lack ordering NPIs on at least some MA encounter records raised concerns that this hinders 
their data analysis for program integrity.  Most MAOs that collect any ordering NPIs use them to 
conduct oversight activities, but one in five does notdespite having the data to do so.  
Furthermore, most MAOs that collect these ordering NPIs do not validate them against CMSs 
NPI registry.  We recommended that CMS encourage MAOs to perform program integrity 
oversight using ordering NPIs.  CMS neither concurred nor nonconcurred with our 
recommendation.  (OEI-03-19-00432) 
 
Trend Toward More Expensive Inpatient Hospital Stays in Medicare Emerged Before COVID-19 
and Warrants Further Scrutiny.  Hospitals play an essential role in our health care system; nearly 
one-fifth of all Medicare payments are for inpatient hospitalizations.  Inpatient hospital billing in 
the years leading up to the pandemic indicates that some stays at the highest severity level could 
be susceptible to inappropriate billing.  Our findings can help CMS gain a better understanding 
of how hospitals bill Medicare and improve its oversight of hospital billing.  We recommended 
that CMS conduct targeted reviews of MS-DRGs and stays that are vulnerable to upcoding, as 
well as the hospitals that frequently bill them.  CMS did not concur.  (OEI-02-18-00380) 
 
Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments 
To Disproportionately Drive Payments.  Twenty MA companies drove a disproportionate share 
of the $9.2 billion in estimated risk-adjusted payments from diagnoses reported only on chart 
reviews and health risk assessments (HRAs), and on no other 2016 encounter records.  Each 
company generated a share of payments from these chart reviews and HRAs that was more than 
25 percent higher than the share of enrolled MA beneficiaries.  Among these 20 MA companies, 
one company stood out in its use of chart reviews and HRAs to drive risk-adjusted payments 
without encounter records of any other services provided to the beneficiaries for those diagnoses.  
This company had 40 percent of the risk-adjusted payments from both mechanisms and yet 
enrolled only 22 percent of the MA beneficiaries.  In addition, this company accounted for about 
one-third of all payments from diagnoses reported solely on chart reviews and more than half of 
all payments from diagnoses reported solely on HRAs.  We recommended that CMS:  (1) 
provide oversight of the 20 MA companies that had a disproportionate share of the risk-adjusted 
payments from chart reviews and HRAs, (2) take additional actions to determine the 
 
49 
   
appropriateness of payments and care for the one MA company that substantially drove risk-
adjusted payments from chart reviews and HRAs, and (3) perform periodic monitoring to 
identify MA companies that had a disproportionate share of risk-adjusted payments from chart 
reviews and HRAs.  CMS neither concurred nor nonconcurred with our recommendations.  
(OEI-03-17-00474) 
 
Massachusetts Claimed Unallowable Federal Reimbursement for Some Medicaid Physician-
Administered Drugs.  Massachusetts did not always comply with federal Medicaid requirements 
for invoicing manufacturers for rebates for physician-administered drugs.  Massachusetts did not 
invoice manufacturers for rebates associated with $11.4 million (federal share) in physician-
administered drugs.  Massachusetts did not invoice for rebates for any physician-administered 
drug claims identified as hospital outpatient claims.  (A-06-18-04001) 
  
Minnesota Did Not Bill Manufacturers for Some Rebates for Drugs Dispensed to Enrollees of 
Medicaid Managed Care Organizations.  Minnesota did not fully comply with federal Medicaid 
requirements for billing manufacturers for rebates for drugs dispensed to MCO enrollees.  
Minnesota did not bill for and collect manufacturers rebates that we calculated to be 
$6.1 million (federal share).  Minnesota did not always bill for and collect manufacturers rebates 
because Minnesota and its contractor did not identify all of the rebate-eligible drugs in the 
utilization data submitted by the MCOs.  (A-05-17-00018) 
  
New Mexico Did Not Bill Manufacturers for Some Rebates for Physician-Administered Drugs 
Dispensed to Enrollees of Medicaid Managed Care Organizations (MCOs).  New Mexico did 
not fully comply with federal Medicaid requirements for billing manufacturers for rebates for 
physician-administered drugs dispensed to MCO enrollees.  New Mexico did not bill for and 
collect from manufacturers rebates of $1.0 million (federal share).  The errors occurred because 
the state agencys internal controls did not always ensure that it billed manufacturers to secure 
rebates and because the state agency did not always collect the utilization data necessary to bill 
the manufacturers.  (A-06-16-00001) 
 
Medicare Part B Drug Payments:  Impact of Price Substitutions Based on 2019 Average Sales 
Prices.  Based on 2019 data, CMS reduced Medicare Part B reimbursements for 18 drugs, saving 
Medicare and its beneficiaries $6.2 million over one year.  This finding highlights the success of 
HHS-OIGs mandated quarterly comparisons of average sales prices (ASPs) with average 
manufacturer prices (AMPs) and implementation of CMSs current price-substitution policy.  If 
HHS-OIG finds that the ASP for a drug exceeds the AMP by a certain percentagecurrently 
five percentthe ASP based payment amount is substituted with a lower calculated rate.  This 
serves as a mechanism for monitoring market prices and limiting potentially excessive payment 
amounts.  (OEI-03-21-00130) 
 
Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly 
Because of Increased Utilization for Certain High-Priced Tests.  HHS-OIG analyzed all claims 
for lab tests performed in 2019 and paid for under the Medicare Part B Clinical Laboratory Fee 
Schedule.  We identified key statistics and emerging trends for the top 25 lab tests based on 
Medicare spending in 2019.  In the second year of the new payment system required by the 
 
50 
   
Protecting Access to Medicare Act of 2014, reduced payment rates for many lab tests resulted in 
savings for the Medicare program.  However, total Medicare spending increased slightly because 
of increased utilization and spending on certain high-priced tests, such as genetic tests.  (OEI-09-
20-00450) 
  
Data on Medicaid Managed Care Payments to Providers Are Incomplete and Inaccurate.  
Effective oversight of Medicaid requires a national system with complete and accurate data. 
CMS established T-MSIS for this purpose.  Payment data are a critical component of T-MSIS.  
These data include the amounts paid, billed, and allowed for every service provided to Medicaid 
enrollees, including those services provided through managed care.  We recommended that 
CMS:  (1) review states managed care payment data in T-MSIS and ensure that states have 
corrective action plans to improve data completeness and quality, as appropriate; (2) make public 
its reviews of states managed care data; and (3) clarify and expand its initiative on payment 
data.  CMS did not concur.  (OEI-02-19-00180) 
  
Nationwide, Almost All Medicaid Managed Care Plans Achieved Their Medical Loss Ratio 
Targets.  Federal requirements for medical loss ratios (MLRs) were established to ensure that 
Medicaid managed care plans spend most of their revenue on health care services and quality 
improvement, thereby limiting the amount that a plan can spend on administration and keep as 
profit.  An MLR is the percentage of revenue that a managed care plan spends on services related 
to the health of its enrollees.  We found that 92 percent of Medicaid managed care plans (471 of 
513) achieved MLRs that met or exceeded the federal 85 percent standard for MLRs.  Although 
federal MLR regulations do not require states to set minimum MLRs, 34 states had established 
minimum MLRs for 434 Medicaid managed care plans.  Ninety-one percent of plans met these 
state-set minimum MLRs. However, 39 plans failed to meet their state-set minimum MLRs for 
the period reviewed. Nineteen of these plans reported owing a total of $197.8 million to states 
that had opted to require that their plans return money to the state when the plans did not meet 
minimum MLRs.  This data brief demonstrates that states that choose to establish minimum 
MLRs with requirements to return money may recoup millions of Medicaid dollars from plans 
that fail to meet the state-set minimum MLRs.  (OEI-03-20-00230) 
  
Medicaid Fraud Control Units FY 2020 Annual Report.  This annual report provides statistics 
that highlight the accomplishments of the 53 MFCUs during FY 2020.  MFCUs reported that the 
COVID-19 pandemic created significant challenges for MFCU staff, operations, and court 
proceedings.  However, MFCUs reported taking steps to mitigate the effects of the pandemic 
and, despite challenges, continued to carry out their Medicaid program integrity functions in 
FY 2020.  MFCUs reported 1,017 convictions in FY 2020.  Fraud cases accounted for 76 percent 
of the MFCU convictions, while patient abuse or neglect was involved in 24 percent.  
Approximately 47 percent of the 774 MFCU fraud convictions involved personal care services 
attendants and agencies.  MFCUs were responsible for 786 civil settlements and judgments, 
33 percent of which involved pharmaceutical manufacturers.  MFCUs reported $1 billion in 
criminal and civil recoveries.  In an appendix to the report, HHS-OIG summarized beneficial 
practices identified by HHS-OIG in its reviews or inspections that may be useful to other 
MFCUs.  (OEI-09-21-00120) 
 
 
51 
   
Risk Assessment Puerto Rico Medicaid Program.  To fulfill HHS-OIGs responsibilities under 
P.L. No. 116-94, we conducted a high-level risk assessment of Puerto Rico Medicaid program 
controls and processes.  Our approach included interviewing program officials from various units 
that administer the Puerto Rico Medicaid program and reviewing documents that they provided.  
We identified program integrity, beneficiary eligibility, provider enrollment, overpayment 
reporting, and contracting as key areas at high risk for improper Medicaid program payments.  In 
addition, we determined that the risk of improper Medicaid program payments in Puerto Rico 
could be increased because there have been no recent reviews of Puerto Rico Medicaid program 
payments performed by CMS, and because Puerto Ricos MMIS has not been fully implemented.  
Finally, we identified one area (program management) at moderate risk for improper Medicaid 
program payments due to limitations in staff hiring and training.  Based on the results of our 
high-level risk assessment, we determined that audits of Puerto Ricos Medicaid program are 
warranted to protect federal funds by identifying inaccurate program payments.  We have used 
the results of this assessment to set priorities for performing these audits.  We initiated two audits 
in FY 2021 related to potentially improper payments.  Specifically, we will determine whether 
Puerto Rico improperly claimed Medicaid reimbursements for payments on behalf of deceased 
beneficiaries and beneficiaries who were assigned multiple Medicaid identification numbers.  
(A-02-20-01011) 
  
Ohio Did Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled Beneficiaries.  
For our sample of 150 beneficiaries, Ohio did not determine eligibility for 18 beneficiaries in 
accordance with federal and state requirements and did not provide supporting documentation to 
verify that the remaining 66 potentially ineligible beneficiaries were newly eligible.  (The total 
exceeds 150 because three beneficiaries were found to be ineligible for one determination period 
and found to be potentially ineligible for another period.)  These deficiencies occurred because 
Ohios eligibility determination system lacked the necessary system functionality, and eligibility 
caseworkers made errors.  In addition, Ohio did not always maintain documentation to support 
eligibility determinations.  On the basis of our sample results, we estimated that Ohio made 
Medicaid payments of $77.5 million (federal share) on behalf of 51,219 ineligible beneficiaries 
and $746.4 million (federal share) on behalf of 241,998 potentially ineligible beneficiaries.  
(A-05-18-00027) 
  
Ohio Made Capitation Payments to Managed Care Organizations for Medicaid Beneficiaries 
With Concurrent Eligibility in Another State.  Ohio made an estimated $5.9 million in August 
2018 capitation payments on behalf of beneficiaries who were concurrently eligible and residing 
in another state.  On the basis of our sample results, we estimated that Ohio could have saved 
$5.9 million ($4.2 million federal share) for August 2018 capitation payments made to MCOs on 
behalf of beneficiaries with concurrent eligibility.  (A-05-19-00023) 
  
Kansas Made Capitation Payments to Managed Care Organizations After Beneficiaries Deaths.  
Kansas made at least $17.3 million in unallowable capitation payments to MCOs on behalf of 
beneficiaries whose dates of death preceded the service period covered by the monthly capitation 
payment, for which it claimed at least $9.7 million in unallowable federal reimbursements.  
Specifically, 1,383 capitation payments totaling $2.7 million ($1.5 million federal share), which 
were made on behalf of deceased beneficiaries who had dates of death in Kansass eligibility 
 
52 
   
system that did not always agree with the information in the Social Security Administrations 
Death Master File (DMF), were unallowable.  Furthermore, 100 capitation payments in our 
stratified random sample totaling $192,991 ($108,657 federal share) and made on behalf of 
beneficiaries who had a date of death recorded in the DMF but who did not have a date of death 
in Kansass system were unallowable.  On the basis of our sample results, we estimated that 
Kansas made unallowable capitation payments totaling at least $14.6 million (at least 
$8.2 million federal share).  In addition, Kansas had previously overreported capitation payments 
totaling more than $2.0 million ($1.2 million federal share) that were related to prior-period 
adjustments.  (A-07-20-05125) 
  
New York Improved Its Monitoring of Its Personal Care Services Program But Still Made 
Improper Medicaid Payments of More Than $54 Million.  New York claimed federal 
reimbursement for personal care services that did not comply with certain federal and state 
requirements for 28 of the 100 sampled claims.  Specifically, New York received 
reimbursements for personal care services for which there were:  (1) no valid nursing or social 
assessment; (2) no independent medical review; (3) no valid physicians order, or the order was 
not timely; (4) no documentation of services provided; and (5) no plan of care.  Additionally, for 
some claims the personal care aide who provided the associated services had not undergone a 
timely criminal history check or did not meet training requirements.  The unallowable claims 
occurred because New Yorks monitoring of the personal care services program was not 
adequate to ensure that services complied with federal and state requirements.  However, we 
noted that in 2017 New York made some improvements to its monitoring of the program.  On the 
basis of our sample results, we estimated that New York improperly claimed at least 
$54.5 million in federal Medicaid reimbursement for personal care services during our audit 
period.  In addition, the health and safety of some Medicaid beneficiaries may have been put at 
risk because a personal care aide had not undergone a criminal history check or did not meet 
training requirements.  (A-02-19-01016) 
  
About 79 Percent of Opioid Treatment Program Services Provided to Medicaid Beneficiaries in 
Colorado Did Not Meet Federal and State Requirements.  Colorados oversight during the audit 
period did not ensure that Opioid Treatment Program (OTP) services provided to Medicaid 
beneficiaries met federal and state requirements.  Of the 100 OTP services we sampled, 21 
complied with federal and state requirements but 79 did not meet applicable federal and state 
requirements.  Colorados oversight of OTPs consisted primarily of biennial audits conducted by 
the state Opioid Treatment Authority that were not sufficient in scope and depth of coverage to 
ensure that OTPs maintained a recordkeeping system that was adequate to document and monitor 
patient care, or to ensure that OTP services met federal and state requirements.  The biennial 
audits of each OTP were performed by a single person, covered approximately 10 percent of 
patient charts, and took between one and two days to perform.  Given all of the tasks that these 
audits sought to conduct, we do not believe that reviewing 10 percent of patient charts over the 
course of one to two days was adequate for one person to be able to thoroughly review patient 
charts for deficiencies and to devote sufficient time to other tasks.  On the basis of our sample 
results, we estimated that more than 1.1 million OTP services, or about 79 percent, did not meet 
federal and state requirements during the audit period.  (A-07-20-04118) 
  
 
53 
   
California Claimed at Least $2 Million in Unallowable Medicaid Reimbursement for a Selected 
Providers Opioid Treatment Program Services.  California did not claim Medicaid 
reimbursement for the selected providers OTP services in accordance with federal and state 
requirements.  Among the 100 sample items, one sample item was allowable but 99 sample items 
had services that were unallowable.  On the basis of our sample results, we estimated that 
California claimed at least $2.4 million in unallowable federal Medicaid reimbursement for OTP 
services during our audit period.  These deficiencies occurred because Californias oversight 
activities did not ensure that OTP services met federal and state requirements.  We also identified 
deficiencies in two areas in which California could improve the quality of care provided to 
beneficiaries receiving OTP services.  (A-09-20-02001) 
  
Massachusetts Made at Least $14.0 Million in Improper Medicaid Payments for the 
Nonemergency Medical Transportation Program.  Massachusetts claimed federal Medicaid 
reimbursement for 86 of 100 sampled lines of service submitted by transportation providers that 
did not comply with certain federal and state requirements.  The improper claims for unallowable 
services were made because the states monitoring and oversight of the nonemergency medical 
transportation (NEMT) program did not ensure that NEMT services were for qualifying medical 
services and were adequately documented.  In addition, for all 100 sample items, driver 
qualifications and vehicle inspection, registration, and maintenance policies or schedules were 
not adequately documented.  On the basis of our sample results, we estimated that at least 
758,847 Medicaid claims totaling $14,142,730 ($7,071,365 federal share) did not comply with 
certain federal and state regulations.  (A-01-19-00004) 
  
New York Improperly Claimed $439.0 Million In Medicaid Funds for Its School-Based Health 
Services Based on Certified Public Expenditures.  New York claimed unallowable federal funds 
because it did not support that all random moments coded as health care were for Medicaid-
eligible health services.  New York also did not provide support that it did not double-claim for 
services when a student in one school district received services from another school district.  In 
addition, New York improperly claimed excess costs for one year.  Finally, New York did not 
follow federal random moment time study (RMTS) requirements and used an unsupported 
method to claim Medicaid costs.  New York and its contractor developed complex methods that 
were difficult or impossible to correctly implement and support with documentation.  As a result, 
New York claimed estimated unallowable federal funds totaling $98.0 million.  In addition, New 
York claimed $32.0 million in federal funds because it did not follow federal RMTS 
requirements or document that CMS approved its allocation methodology, and $309.0 million in 
federal funds using ratios that were not supported.  (A-02-18-01019) 
  
New Yorks Claims for Federal Reimbursement for Payments to Health Home Providers on 
Behalf of Beneficiaries Diagnosed With Serious Mental Illness or Substance Use Disorder 
Generally Met Medicaid Requirements But It Still Made $6.0 Million in Improper Payments to 
Some Providers.  Among the 150 payments in our random sample, New York properly claimed 
reimbursements for 141 payments but improperly claimed reimbursements for the remaining 
nine payments.  Specifically, New Yorks health home providers did not provide a 
comprehensive patient-centered care plan covering the sampled date of service for enrolled 
beneficiaries (five payments) and did not document health home services (four payments).  The 
 
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improper payments occurred because New York did not adequately monitor health home 
providers for compliance with certain federal and state requirements for providing, documenting, 
and billing services.  Health home providers failure to develop comprehensive patient-centered 
care plans and provide health home services could have resulted in beneficiaries not getting the 
services that they needed and may have put their health and safety at risk.  On the basis of our 
sample results, we estimated that New York improperly claimed at least $6.0 million in federal 
Medicaid reimbursements for payments made to health home providers for services provided to 
beneficiaries diagnosed with serious mental illness or substance use disorder.  (A-02-19-01007) 
  
Kentucky Claimed Millions in Unallowable School-Based Medicaid Administrative Costs.  
Kentucky did not claim school-based Medicaid administrative costs in accordance with federal 
requirements.  It used an invalid random moment sampling to allocate costs to Medicaid and 
included unallowable costs in its cost pools.  In addition, Kentucky claimed these costs without 
promptly submitting cost allocation plan amendments to the Department of Health and Human 
Services, Division of Cost Allocation (DCA) for review and without obtaining DCA approval.  
As a result, the $58.9 million ($29.4 million federal financial participation) that it claimed in 
school-based Medicaid administrative costs for FY 2009 through FY 2014 were unallowable.  
(A-04-17-00113) 
  
Indiana Received Over $22.0 Million in Excess Federal Funds Related to Unsupported 
Community Integration and Habilitation Waiver Services at 12 Selected Service Providers.  
Indiana did not ensure that all Community Integration and Habilitation (CIH) Waiver services 
were provided in accordance with federal, state, and waiver requirements.  We determined that 
services associated with 236 claims were provided in accordance with the requirements; 
however, services associated with 64 claims were not.  Documentation provided by CIH Waiver 
service providers did not support that the services associated with 39 claims were provided in 
accordance with the requirements.  Overpayments associated with these 39 claims totaled 
$10,675 ($7,108 federal share).  In addition, some CIH Waiver service providers were unable to 
provide any documentation to support 25 claims totaling $90,802 ($60,448 federal share).  
Therefore, overpayments associated with the 64 claims totaled $101,477 ($67,556 federal share).  
On the basis of our sample results, we estimated that these providers were unable to support that 
they provided services totaling at least $33.5 million ($22.3 million federal share) in accordance 
with the CIH Waiver requirements.  These issues occurred because Indianas monitoring of CIH 
Waiver services was not adequate to ensure that services complied with federal, state, and CIH 
Waiver requirements.  (A-05-19-00022) 
 
Medicare Improperly Paid Physicians for More Than Five Spinal Facet-Joint Injection Sessions 
During a Rolling 12-Month Period, and Noridian Healthcare Solutions, LLC, Made Improper 
Medicare Payments of $4.0 Million to Physicians in Jurisdiction E for Spinal Facet-Joint 
Injections.  Medicare did not pay physicians for selected facet-joint injection sessions in 
accordance with federal requirements, and Noridian Healthcare Solutions, LLC (Noridian), did 
not pay physicians in Jurisdiction E for spinal facet-joint injections in accordance with Medicare 
requirements.  Specifically, for selected facet-joint injections MACs in the 11 jurisdictions with a 
coverage limitation made improper payments of $748,555.  In addition, if the remaining MAC 
jurisdiction had kept the coverage limitation in place during our audit period, Medicare could 
 
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have saved $513,328.  Also, we estimated that Noridian improperly paid physicians $4.2 million 
for facet-joint injections for our audit period.  (A-09-20-03003, A-09-20-03010)   
 
Peninsula Regional Medical Center:  Audit of Medicare Payments for Polysomnography 
Services, North Mississippi Medical Center:  Audit of Medicare Payments for Polysomnography 
Services, and University of Michigan Health System:  Audit of Medicare Payments for 
Polysomnography Services.  Peninsula Regional Medical Center (Peninsula), North Mississippi 
Medical Center (North Mississippi), and the University of Michigan submitted Medicare claims 
for some polysomnography services that did not comply with Medicare billing requirements. 
Specifically on the basis of our sample results, we estimated that Peninsula received 
overpayments of at least $66,647 for polysomnography services provided during the audit 
period.  The errors occurred because Peninsulas policies and procedures did not address the 
processing of Medicare claims for polysomnography services to ensure that services billed to 
Medicare were adequately documented and coded correctly.  Additionally, on the basis of our 
sample results, we estimated that North Mississippi received overpayments of at least $67,038 
for polysomnography services provided during the audit period.  North Mississippi stated that the 
errors occurred because of a misunderstanding of the Medicare policy.  Although North 
Mississippi had some policies and procedures in place, it did not adequately explain how to 
process Medicare claims for polysomnography services and ensure that services billed to 
Medicare were coded correctly or that technicians attending a polysomnography service had the 
required credentials.  Furthermore, on the basis of our sample results, we estimated that the 
University of Michigan received overpayments of at least $12,520 for polysomnography services 
during our audit period.  The errors occurred because University of Michigan policies and 
procedures did not address the processing of Medicare claims for polysomnography services to 
ensure that services billed to Medicare were adequately documented and coded correctly. (A-04-
19-07087, A-04-19-07086, A-04-20-07088) 
  
An Ophthalmology Clinic in California: Audit of Medicare Payments for Eye Injections of Eylea 
and Lucentis.  An ophthalmology clinic in California (the Clinic) generally complied with 
Medicare requirements when billing for intravitreal injections of Eylea and Lucentis, which 
accounted for 88 percent of the total payments in our sample.  However, the Clinic did not 
always comply with Medicare requirements when billing for other services provided on the same 
day as the intravitreal injections (e.g., injections of an anesthesia drug).  For 301 services and 
drugs, the Clinic did not comply with the requirements; 195 services were not separately 
payable, and 106 services and drugs were not reasonable and necessary.  Because the Clinics 
medical director was unfamiliar with Medicares billing requirements, the Clinic did not have 
policies and procedures to ensure that services and drugs billed to Medicare were correctly billed 
or reasonable and necessary.  On the basis of our sample results, we estimated that at least 
$398,625 of the $4.3 million paid to the Clinic was unallowable for Medicare reimbursement.  
(A-09-19-03022) 
 
Medicare Could Have Saved Up to $20.0 Million Over Five Years if CMS Oversight Had Been 
Adequate To Prevent Payments for Medically Unnecessary Cholesterol Blood Tests.  Payments 
made to providers for direct-measurement, low-density lipoprotein (LDL) cholesterol tests 
(direct LDL tests) that were billed in addition to lipid panels did not comply with Medicare 
 
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requirements.  Under certain circumstances, it may be medically necessary for a provider to 
perform both tests for the same beneficiary on the same date of service.  However, CMS and 
Medicare contractors explained that these circumstances should happen with limited frequency.  
We determined that some providers billed LDL tests in addition to lipid panels for the same 
beneficiary on the same date of service more than 75 percent of the time.  (Such providers are 
known as at-risk providers.)  In total, we identified $20.4 million in Medicare payments made 
to at-risk providers for direct LDL tests. 
  
Two Medicare contractors review of medical records associated with 20 judgmentally sampled 
claims found that all of the direct LDL tests billed in addition to lipid panels were medically 
unnecessary.  Because the claim lines for the $20.4 million in payments to at-risk providers for 
direct LDL tests had characteristics similar to the claim lines in the judgmental sample, we 
determined that up to $20.4 million in payments were improper.  If CMS had had oversight 
mechanisms to prevent such payments, Medicare could have saved up to $20.4 million for our 
audit period.  (A-09-19-03027) 
  
CMS Needs To Strengthen Regulatory Requirements for Medicare Part B Outpatient Cardiac 
and Pulmonary Rehabilitation Services To Ensure Providers Fully Meet Coverage 
Requirements.  CMS regulatory requirements related to Medicare outpatient cardiac and 
pulmonary rehabilitation services did not contain sufficient information to ensure that claims for 
these services met Medicare coverage requirements.  Specifically, the requirements lacked 
details related to what patient-specific information should be contained in a beneficiarys 
medical record and how this information should relate to individualized treatment.  As a result, 
for all 100 sampled beneficiary-days, we determined that medical record documentation obtained 
from the selected provider did not contain sufficient evidence to support whether Medicare 
coverage requirements for reimbursement of cardiac and pulmonary rehabilitation services were 
met.  On the basis of our sample results, we estimated that $2.7 million in Medicare payments 
made by CMS to the selected provider for outpatient cardiac and pulmonary rehabilitation 
services may not have met Medicare coverage requirements as intended.  Furthermore, based on 
our review we believe that Medicare payments totaling approximately $626.0 million made by 
CMS to all providers for outpatient cardiac and pulmonary rehabilitation services during our 
audit period may not have met the requirements.  (A-02-18-01026) 
  
Sleep Management, LLC:  Audit of Claims for Monthly Rentals of Noninvasive Home 
Ventilators.  Most Medicare claims submitted by Sleep Management for the monthly rental of 
noninvasive home ventilators (NHVs) did not comply with Medicare requirements.  Of the 100 
sampled claim lines with payments totaling $75,694, 2 complied with Medicare requirements; 
however, 98 claim lines with payments totaling $74,288 did not comply.  Based on our sample 
results, we estimated that Medicare made overpayments to Sleep Management of at least 
$29.1 million for the monthly rental of NHVs that did not comply with Medicare requirements.  
These overpayments occurred because Sleep Management did not follow its policies and 
procedures to ensure that it obtained sufficient documentation to support the medical necessity of 
the NHVs or discontinued service for lack of beneficiary usage.  (A-04-18-04066) 
 
 
 
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Medicare Made Millions of Dollars in Overpayments for End-Stage Renal Disease Monthly 
Capitation Payments.  CMS did not always make Medicare monthly capitation payments to 
physicians for monthly end-stage renal disease (ESRD)-related services provided in CY 2016 
through CY 2018 in accordance with federal requirements.  Specifically, 23,695 claims were for 
services for which physicians reported monthly ESRD-related billing codes more than once for 
the same beneficiary for the same month.  These claims consisted of 21,763 claims that resulted 
in $4 million in overpayments for instances in which a different physician reported codes for 
services and 1,932 claims that resulted in $291,813 in overpayments for instances in which the 
same physician reported codes for services.  Beneficiaries were responsible for up to $1.1 million 
in cost sharing related to these 23,695 claims.  We are setting aside potential overpayments 
related to an additional 1,598 claims totaling $289,169 and $74,563 in beneficiary cost-sharing 
for CMSs review and determination.  CMS did not have adequate claims processing controls in 
place, to include system edits, to identify and prevent these overpayments.  (A-07-19-05117) 
  
Opportunities Exist for CMS and Its Medicare Contractors To Strengthen Program Safeguards 
To Prevent and Detect Improper Payments for Drug Testing Services.  We identified three 
weaknesses in the Medicare contractors established program safeguards for preventing and 
detecting improper payments for drug testing services and promoting provider compliance with 
Medicare requirements.  Specifically, the contractors did not have:  (1) clear and consistent 
requirements or guidance for laboratories to use when determining the number of drug classes to 
bill for definitive drug testing services, (2) procedures for identifying or limiting the frequency of 
drug testing services (e.g., the number of drug tests performed per year) for each beneficiary 
across all Medicare jurisdictions, and (3) consistent requirements in their Local Coverage 
Determinations or any procedures for identifying claims for direct-to-definitive drug testing.  If 
CMS and its contractors cannot ensure that laboratories claims for drug testing services comply 
with Medicare requirements, laboratories may receive improper payments and beneficiaries with 
substance use disorders may receive medically unnecessary drug testing services.  (A-09-20-
03017) 
  
Medicare Payments for Transitional Care Management Services Generally Complied With 
Federal Requirements, but Some Overpayments Were Made.  Payments made to physicians for 
Transitional Care Management (TCM) services provided during CYs 2015 and 2016 generally 
complied with federal requirements, but we identified almost $1.7 million in overpayments 
associated with 13,577 claims (that were outside the reopening and recovery period) for 
instances in which multiple physicians billed for TCM services for a beneficiarys same 30-day 
TCM service period and for instances in which a physician billed on different dates for TCM and 
restricted overlapping care management services provided during the same 30-day TCM service 
period for the same beneficiary.  These overpayments represented only 0.006 percent of the total 
TCM payments made during our audit period.  We also identified 853 claims that were outside 
the reopening and recovery period, and that totaled at least $74,275 in unallowable services, for 
instances in which a physician submitted claims on the same date for TCM and restricted 
overlapping care management services that were rendered for the same beneficiary during a 
single 30-day TCM service period.  We were not able to determine which of these claims were 
overpayments.  CMS did not have controls in place to include claim system edits, to prevent and 
detect multiple TCM services provided to beneficiaries, and to identify instances of overlapping 
 
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care management.  (A-07-17-05100) 
 
Medicare Continues To Make Overpayments for Chronic Care Management Services, Costing 
the Program and Its Beneficiaries Millions of Dollars.  Not all payments made by CMS to 
providers for noncomplex and complex CCM services rendered during CYs 2017 and 2018 
complied with federal requirements, resulting in $1.9 million in overpayments associated with 
50,192 claims.  We identified 38,447 claims resulting in $1.4 million in overpayments for 
instances in which providers billed noncomplex or complex CCM services more than once for 
the same beneficiary for the same service period.  We also identified 10,882 claims that resulted 
in $438,262 in overpayments for instances in which the same provider billed for both 
noncomplex or complex CCM services and overlapping care management services rendered to 
the same beneficiaries for the same service periods.  Furthermore, we identified 863 claims that 
resulted in $52,086 in overpayments for incremental complex CCM services that were billed 
along with complex CCM services that we identified as overpayments.  For these 50,192 claims, 
beneficiaries cost-sharing totaled up to $540,680.  These errors occurred because CMS did not 
have claim system edits to prevent and detect overpayments.  (A-07-19-05122) 
 
CMS Needs To Issue Regulations Related to Phlebotomy Travel Allowances.  For this audit, we 
focused on two previous audits of phlebotomy travel allowance payments for clinical diagnostic 
laboratory tests made by two Medicare administrative contractors (MACs) from January 1, 2015, 
through December 31, 2016, and on current travel allowance guidance.  In our two previous 
audits of MAC payments for phlebotomy travel allowances, we determined that the two MACs 
paid providers for phlebotomy travel allowances that did not comply with Medicare guidance.  
Specifically, in our two MAC audits, 93 of the 202 sampled paid claim lines we reviewed 
complied with Medicare guidance, but 109 paid claim lines did not comply.  (Some lines did not 
comply for more than one reason.)  Errors identified in those audits were related to incorrectly 
prorated mileage, incorrect payment rates, and inadequate documentation.  On the basis of the 
sample results, we estimated that the two MACs paid providers a combined $2.7 million in 
phlebotomy travel allowance payments that were not in accordance with Medicare guidance.  In 
addition, we spoke with CMS in June 2020 and, at that time, CMS had not begun the notice and 
comment rulemaking process necessary to clarify provider guidance related to prorating mileage 
on claims for phlebotomy travel allowances or to issue further guidance.  (A-06-20-04000) 
 
Other HHS-OIG Fraud and Abuse Prevention Activities 
 
Data Analytics 
HCFAC funding supports HHS-OIGs advanced data analytics initiatives to expand our tools, 
models, and customized analytics with artificial intelligence (AI) and cloud computing to:  
(1) proactively monitor and target our oversight of high-risk HHS programs and health care 
providers; (2) identify trends, outliers, and potential investigative or audit targets; (3) enhance 
decision making; and (4) optimize HHS-OIG processes.  HHS-OIGs team of highly trained data 
analysts, data scientists, and statisticians partners with HHS-OIG investigators, auditors, 
attorneys, and evaluators to identify HHSs most significant risks and better target fraud, waste, 
and abuse.  HHS-OIG applies predictive and geospatial analytics, and leverages dashboards, 
machine learning, and AI capabilities including neural networks and text mining to high-value 
 
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health care, grants, law enforcement, and operational data to identify and support prosecutions of 
sophisticated fraud schemes as well as potential audit and evaluation findings.  At least 635 
unique staff members used HHS-OIG analytic tools for mission-focused work to generate more 
than 68,000 actions, including provider-specific reports and claims exports, among other work 
products and analytic insights, during the fiscal year. 
 
HHS-OIGs ability to use data proactively has become even more important during the 
COVID-19 pandemic.  HHS-OIG analytics have helped to inform a range of Medicare-focused 
topics that are subjects of recent and future HHS-OIG reports including COVID-19 testing; 
possible fraud, waste, and abuse in Medicare laboratory billing; the use of Medicare telehealth 
services; the challenges of COVID-19 in nursing homes; audits and investigations involving the 
CARES Act Provider Relief Fund (PRF) and Uninsured Program; and many others.  
 
HHS-OIG analytics staff quickly pivoted to monitor COVID-19 testing, treatment, and billings 
for other services such as DME, allergy, genetic, respiratory, and other testing to detect patterns 
of inappropriate bundling of services and billing for services not rendered.  HHS-OIG also 
monitored changes in services delivered through telemedicine to identify inappropriate billing 
schemes.  HHS-OIG analytics supported agency investigative actions that led to criminal charges 
filed in U.S. courts involving at least 23 of 42 doctors, nurses, and other licensed medical 
professionals, and 18 other cases against owners and operators of DME suppliers, labs, and 
providers, as well as marketers, patient recruiters, and PRF recipients included in the nationwide 
health care fraud enforcement actions announced by DOJ and HHS on September 17, 2021.  
Furthermore, HHS-OIGs data analytics continue to identify and support cases filed as part of the 
Appalachian Regional Prescription Opioid Strike Force effort. 
 
Our data and technical experts are also partnering with HHS-OIG auditors and evaluators to 
provide custom data and analytics support focused on pandemic-related work.  As of September 
30, 2021, HHS-OIG analytics staff supported 21 audits, 24 evaluations, and 98 criminal 
investigations launched since the onset of the COVID-19 pandemic across the Medicare and 
Medicaid portfolio as well as dozens of COVID-19 related projects and exploratory work.   
 
Outreach and Guidance 
 
HHS-OIG strives to cultivate a culture of compliance in the health care industry through various 
educational and outreach efforts. 
 
Advisory Opinions   
HIPAA established an advisory opinion process through which parties may obtain binding legal 
guidance on the application of the federal AKS and other HHS-OIG administrative enforcement 
authorities to existing or proposed health care financial arrangements.   
 
During FY 2021, HHS-OIG in consultation with DOJ issued 18 advisory opinions.  During the 
24 years of the HCFAC program, HHS-OIG has issued nearly 400 advisory opinions, modified 
21 advisory opinions, terminated four opinions, and rescinded one opinion. 
 
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Collaborations With Private Sector Partners  
HHS-OIG regularly engages with public stakeholders to combat fraud.  For example, HHS-OIG 
is an active partner in HFPP, described in more detail elsewhere in this report, and with the 
National Health Care Anti-Fraud Association, both of which are public-private partnerships that 
address health care fraud by sharing data and information for the purposes of detecting and 
combating fraud and abuse in health care programs.  HHS-OIG frequently shares information 
about prescription drug fraud schemes, trends, and other matters related to health care fraud, as 
appropriate.  As a further example, HHS-OIG has collaborated with DEA to provide antifraud 
education at numerous Pharmacy Diversion Awareness Conferences held across the United 
States.  The conferences were designed to assist pharmacy personnel with identifying and 
preventing diversion activity.  Since 2013, HHS-OIG has delivered presentations at conferences 
in 50 states and Puerto Rico.  Furthermore, HHS-OIG regularly delivered presentations at 
various health care compliance conferences across the country. 
 
HHS-OIG also engages with stakeholders to seek insight on how to promote compliance while 
encouraging innovation in the health care industry.  For instance, HHS-OIG in December 2020 
issued a final rule as part of HHSs broader Regulatory Sprint to Coordinated Care initiative.  In 
this rule, HHS-OIG promulgated new and modified safe harbors to the AKS and new exceptions 
to the CMP provision prohibiting inducements to beneficiaries in an effort to remove barriers to 
arrangements that could promote greater care coordination and value-based care.15  HHS-OIG 
also recently published a Request for Information seeking to identify ways that it could 
modernize the accessibility and usability of our publicly available information.16  HHS-OIG will 
host roundtables with stakeholders in FY 2022 to further solicit feedback on this topic.   
 
 
Centers for Medicare & Medicaid Services 
 
In FY 2021, Congress appropriated CMS $616.0 million in discretionary funds to support its 
comprehensive program integrity strategy for Medicare, Medicaid, the Childrens Health 
Insurance Program (CHIP), and the Health Insurance Marketplaces.  In FY 2021, Congress 
required HHS to fund the Administration for Community Livings (ACL) Senior Medicare Patrol 
(SMP) Program; therefore, $20.0 million of CMSs $616.0 million in discretionary funding was 
allocated to ACL to support the program.  More information on the SMP Program activities and 
accomplishments are discussed in the ACL section of this report on page 84.  With the HCFAC 
funds, CMS works to ensure that accurate payments are made to legitimate individuals and 
entities for allowable services or supplies provided to eligible beneficiaries of federal health care 
programs.   
 
 
15 HHS-OIG, Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalty Rules 
Regarding Beneficiary Inducements, 85 Fed. Reg. 77,684 (Dec. 2, 2020).  
16 HHS-OIG, OIG Modernization Initiative To Improve Its Publicly Available ResourcesRequest for Information, 
86 Fed. Reg. 5,3072 (Sept. 24, 2021). 
 
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CMS also performs many program integrity activities that are beyond the scope of this report 
because they are not funded directly by the HCFAC Account or discretionary HCFAC funding.  
This includes activities such as the Recovery Audit Program and Medicare Secondary Payer.  
CMSs program integrity activities are discussed at length in the annual Medicare and Medicaid 
Integrity Programs Report to Congress, which can be found on the CMS website.17  
 
Address the Full Spectrum of Fraud, Waste, and Abuse 
 
CMS defines program integrity very simply, pay it right.  Program integrity focuses on paying 
the right amount, to legitimate providers and suppliers, for covered, reasonable and necessary 
services provided to eligible beneficiaries, while concurrently taking aggressive actions to 
eliminate fraud, waste, and abuse.  Federal health programs are quickly evolving; therefore, 
CMSs program integrity strategy must keep pace to address emerging challenges.  
 
This section describes the wide range of program integrity activities funded by the HCFAC 
account that CMS utilizes to comprehensively address fraud, waste, and abuse.  These activities 
include many different approaches to program integrity, such as data analysis, investigations and 
audits, recovery actions, and outreach and education. 
 
Unified Program Integrity Contractors (UPICs)  
One way that CMS investigates instances of suspected fraud, waste, and abuse in Medicare and 
Medicaid is through the activities of the UPICs.  The UPICs develop investigations and take 
actions to prevent improper payments from being made to Medicare providers and suppliers.  
UPICs undertake activities including provider and beneficiary interviews and site visits, 
initiating appropriate administrative actions (e.g., prepayment edits, payment suspensions, 
revocations), and performing program integrity reviews of medical records and documentation.  
While a variety of other contractors also perform medical review, UPIC reviews are uniquely 
focused on fraud detection and investigation.  For example, the UPICs look for possible 
falsification of documents that may be associated with an attempt to defraud the Medicare and 
Medicaid programs.  Various UPIC administrative actions result in Medicare savings, including 
automated edit claim denials, non-automated review claim denials, provider revocations and 
deactivations, overpayment recoveries, and law enforcement referrals.   
CMS also contracts with the UPICs to review the actions of Medicaid providers.  The UPICs 
work closely with states to perform numerous functions to detect, prevent, and deter specific 
risks and broader vulnerabilities to the integrity of the Medicaid program, including conducting 
provider investigations and audits, which can result in the identification of overpayments, fraud 
referrals to law enforcement, and other referrals for state administrative action.  Currently, the 
UPICs are carrying out program integrity activities in all five geographic jurisdictions:  Midwest, 
Northeast, West, Southeast, and Southwest. 
 
17 https://www.cms.gov/About-CMS/Components/CPI/CPIReportsGuidance  
 
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Fraud Prevention System (FPS)  
FPS is the predictive analytics technology required under the Small Business Jobs Act of 2010.18  
FPS analyzes FFS claims using sophisticated algorithms to target investigative resources; 
generate alerts for suspect claims or providers and suppliers; and provide information to facilitate 
and support investigations of the most egregious, suspect, or aberrant activity.  CMS uses the 
FPS information to prevent and address improper payments using a variety of administrative 
actions, including claim denials, payment suspensions, Medicare billing privilege revocations, 
and law enforcement referrals. 
 
During FY 2021, the FPS generated alerts that resulted in 516 new leads for program integrity 
contractors (PICs) and augmented information for 521 existing PIC leads or investigations.  The 
PICs reported initiating FPS-attributable actions against 778 providers in FY 2021. 
 
Medicare FFS and Medicaid National Correct Coding Initiative (NCCI) 
NCCI promotes national correct coding methodologies and reduces improper coding that 
may result in inappropriate payments in Medicare FFS.  NCCI Procedure-to-Procedure edits 
prevent inappropriate payment for billing code pairs that should not generally be reported 
together by the same provider for the same beneficiary and date of service, while NCCI 
Medically Unlikely Edits define for each HCPCS/CPT code the maximum units of service 
(UOS) that a provider would report under most circumstances for a single beneficiary on a 
single date of service.  Estimated savings from Medicare NCCI edits are published in the 
Annual Report to Congress on the Medicare and Medicaid Integrity Programs.19 
 
Section 1903(r) of the Social Security Act requires states to use NCCI methodologies to 
process applicable Medicaid claims.  CMS provides assistance for state Medicaid 
agencies to use NCCI methodologies in their Medicaid programs.  
 
Integrated Data Repository and the One Program Integrity (One PI) Portal  
One PI provides CMS program integrity contractors, law enforcement personnel, HHS-OIG 
investigators, and other organizations a centralized single access point to analytical tools and 
data needed to fight Medicare and Medicaid fraud, waste, and abuse.  One PI provides access to 
Medicare and Medicaid data from the Integrated Data Repository (IDR), which allows users to 
investigate improper payments, identify fraud schemes, create and enhance fraud prevention 
models, take administrative actions, pursue civil and criminal penalties, and more to protect 
Medicare and Medicaid taxpayer dollars.  One PI augments the Medicare Parts A, B (including 
Durable Medical Equipment (DME) and home health claims), Part C encounter data, and Part D 
prescription drug event records, as well as beneficiary data that is available in the IDR to provide 
a comprehensive view of claims data, beneficiary data, and prescription drug information as well 
as Transformed Medicaid Statistical Information System (T-MSIS) data and Medi-Medi formats. 
One PI is currently working to integrate with the Unified Case Management (UCM) system and 
the FPS to become the centralized reporting hub for CMS. One PI is a critical element of CMSs 
efforts to ensure program integrity.  
 
18 Public Law 111-240. 
19 https://www.cms.gov/About-CMS/Components/CPI/CPIReportsGuidance.  
 
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The Command Center and Coordinated Program Integrity Activities  
The CMS Command Center opened in July 2012 and provides an opportunity for Medicare and 
Medicaid policy experts; law enforcement officials from HHS-OIG and the DOJ, including FBI; 
state law enforcement officials; clinicians; and CMS staff and program integrity contractors to 
collaborate in real time before, during, and after the development of fraud leads.  These 
collaborative activities enable CMS to take administrative actions such as revocations of 
Medicare billing privileges and payment suspensions more quickly and efficiently. 
 
In FY 2018, CMS began a Major Case Coordination (MCC) initiative that includes 
representation from the HHS-OIG, DOJ, and CMS.  This initiative provides an opportunity for 
Medicare and Medicaid policy experts, law enforcement officials, clinicians, and fraud 
investigators to collaborate before, during, and after the development of fraud leads.  This level 
of collaboration has contributed to several successful coordinated law enforcement actions and 
helped CMS to better identify national fraud trends and program vulnerabilities. 
 
As a result of the MCC, there has been a marked increase in the number and quality of law 
enforcement referrals from CMS.  Since implementation of the MCC, there have been over 3,200 
cases reviewed at MCC, and law enforcement partners have made over 2,000 requests for CMS 
to refer reviewed cases.  CMS program integrity activities and investigations continue to 
contribute to law enforcement investigations, CMS administrative actions and CMS initiatives.  
In FY 2021, CMS reviewed 1,029 cases at MCC meetings, and law enforcement partners made 
607 requests for CMS to refer reviewed cases. 
 
Examples of the ways in which CMS has provided support to the HHS-OIG and DOJ throughout 
fiscal year 2021 include:  
 
  On May 26, 2021, DOJ announced approximately 14 law enforcement indictments of 
individuals involved in COVID-19 related fraud schemes in a coordinated law 
enforcement action with the HHS-OIG and CMS.  CMS separately announced that day 
that it took administrative actions against over 50 DME suppliers for their involvement in 
health care fraud schemes relating to abuse of CMS programs during the pandemic. 
 
  On September 17, 2021, DOJ announced criminal charges against 138 defendants, 
including 42 doctors, nurses, and other licensed medical professionals, in 31 federal 
districts across the United States for their alleged participation in various health care 
fraud schemes that resulted in approximately $1.4 billion in alleged losses.  In addition, 
CMS took administrative action against 28 providers on behalf of Medicare beneficiaries 
and to protect the Medicare Trust Fund.   
 
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Initiatives 
DME suppliers historically have posed a high risk of fraud and CMS has undertaken an 
aggressive strategy to address this risk.  In FY 2021, our activities included DME investigations, 
which included reviews of suppliers and physicians identified as potentially suspicious or high 
 
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risk.  CPI implemented a national investigative strategy and took administrative actions against 
referring providers associated with DOJs 2019 national DME takedown known as Operation 
Brace Yourself (OBY).20 
 
Outreach and Education 
CMSs provider education and outreach helps reduce the Medicare improper payment rate by 
giving Medicare providers the timely and accurate information they need to bill correctly the first 
time.   
 
The Medicare FFS claims processing contractors, known as MACs, educate Medicare providers 
and suppliers about Medicare policies and procedures, including local coverage policies, 
significant changes to the Medicare program, and issues identified through review of provider 
inquiries, claim submission errors, medical review data, and Comprehensive Error Rate Testing 
program data.  The MACs use a variety of strategies and communication channels to offer 
Medicare providers and suppliers a broad spectrum of information about the Medicare program. 
 
CMS continues to work with providers and suppliers, states, and others to protect CMS programs 
from fraud, waste, and abuse schemes.  CMS is focused on safeguarding programs and 
protecting beneficiaries from fraud, waste, and abuse, while also working to minimize 
unnecessary provider burden.  Providing education and training opportunities in ways that 
explain how to avoid improper payments and also alert stakeholders to fraud, waste and abuse 
schemes protect the financial security of CMSs programs by reducing improper payments and 
curtailing emerging fraud schemes.  By offering regular in-person and virtual events and 
trainings, as well as clear and concise information online, CMS continues to provide needed 
information that is responsive to the realities of clinical practice. 
 
Proactively Manage Provider Screening and Enrollment 
 
Provider enrollment is the gateway to the Medicare and Medicaid programs and is the key to 
preventing ineligible providers and suppliers from entering either program.  CMSs role in the 
provider and supplier enrollment process differs between the Medicare and Medicaid programs. 
CMS directly administers Medicare and oversees the provider enrollment and screening process 
for providers and suppliers participating in the Medicare FFS program.  CMS uses provider and 
supplier enrollment information in a variety of ways, such as claims payment and fraud 
prevention programs.  States directly oversee the provider screening and enrollment process for 
their Medicaid programs, and CMS provides regulatory guidance and technical assistance to 
states.  CMS is committed to maintaining operational excellence in its provider enrollment and 
screening process.  Through provider screening and enrollment, CMS continues to prevent and 
reduce fraud, waste, and abuse in the Medicare program and ensure that only eligible providers 
are caring for beneficiaries and receiving payment.  CMS also works with states to support 
 
 
20 https://www.justice.gov/opa/pr/federal-indictments-and-law-enforcement-actions-one-largest-health-care-fraud-
schemes.  
 
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proper enrollment and accurate billing practices to detect and combat fraud, waste, and abuse in 
their Medicaid programs.   
Medicare Provider Screening and Site Visits 
CMS regulations establish three levels of provider and supplier enrollment risk-based screening: 
limited, moderate, and high, and each provider and supplier specialty category is assigned 
to one of these three screening levels.  Providers and suppliers designated in the limited risk 
category undergo verification of licensure and a wide range of database checks to ensure 
compliance with all provider- or supplier-specific requirements.  Providers and suppliers 
designated in the moderate risk category are subject to unannounced site visits in addition to 
all the requirements in the limited screening level, and providers and suppliers in the high 
risk category are subject to fingerprint-based criminal background checks (FCBCs) in addition to 
all of the requirements in the limited and moderate screening levels.  In FY 2021, FCBCs 
were paused due to the COVID-19 public health emergency (PHE).  CMS anticipates resuming 
FCBC in FY 2022, although the PHE remains in effect. 
 
The Advanced Provider Screening system (APS) automatically screens all current and 
prospective providers and suppliers against a number of data sources, including provider and 
supplier licensing and criminal records, to identify and highlight potential program integrity 
issues for proactive investigation by CMS.  In FY 2021, APS utilization resulted in more than 
7,700,000 screenings.  These screenings generated more than 29,000 potential licensure alerts, 
and more than 3,000 criminal alerts for potentially fraudulent providers and suppliers for further 
review by CMS.  APS review resulted in approximately 94 criminal revocations, 230 licensure 
revocations, and 46 licensure deactivations. 
 
Site visits are a screening mechanism used to identify providers and suppliers that are not in 
compliance with program requirements and likely to pose a risk to the Medicare program, 
preventing them from enrolling or maintaining enrollment.  CMS-authorized site-visit 
contractors validate that the provider or supplier complies with Medicare enrollment 
requirements during these visits.  This work resulted in about 225 revocations due to non-
operational site visit determinations for all providers and suppliers. 
 
CMSs provider screening and enrollment initiatives in Medicare have had a significant impact 
on removing ineligible providers and suppliers from the program.  In FY 2021, CMS deactivated 
approximately 123,000 enrollments and revoked 2,290 enrollments.  Site visits, revalidation, and 
other initiatives have contributed to the deactivation21 and revocation22 of more than one million 
enrollment records since FY 2012, when CMS started implementing these screening and 
enrollment requirements.  
 
Provider Enrollment, Chain and Ownership System (PECOS) 
PECOS is the system of record for all Medicare Provider/Supplier enrollment data, which 
 
21 Deactivation means the providers or suppliers billing privileges were stopped but can be restored upon the 
submission of updated information.  See 42 CFR  424.540. 
22 Revocation means the providers or suppliers billing privileges are terminated.  See 42 CFR  424.535. 
 
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includes Part A, Part B, and DME.  It is the Internet-based system that providers and suppliers 
use to enroll, revalidate, or update their enrollment information in the Medicare FFS program.  
PECOS stores all information furnished by providers and suppliers; tracks all enrollment 
processing and the results of MAC evaluation; and provides feeds to FFS claims payment 
systems, which are used in processing all claims.  Medicare FFS claims processing cannot occur 
without provider/supplier enrollment information from PECOS.  All provider/supplier updates 
and validations, both systematic and those performed manually by MACs, are stored and sent by 
PECOS.  It is integrated with and supports multiple enterprise systems and CMS operations for 
the Merit-Based Incentive Payment System (MIPS), demonstrations and model tests, and 
DMEPOS competitive bidding, providing direct access to information on the relationships 
between individuals and organizations stored in enrollment records.  PECOS is a critical part of 
CMSs program integrity strategy and is used along with the APS, as a data source by the FPS 
and many other program integrity partners, including the UPICs, Recovery Audit Program, the 
HHS-OIG, and state program integrity programs.   
  
PECOS is the source for vetting CMSs Accountable Care Organization programs and models 
and provides information that is used as a primary factor to determine program and model 
eligibility.  PECOS supports data transparency through interfacing with programs such as Open 
Payments, Physician Compare, and Nursing Home Compare and also supports CMS data 
management initiatives through Master Data Management (MDM), Unified Case Management 
(UCM), Pricing, Data Analysis and Coding (PDAC), One PI, Integrated Data Repository (IDR), 
Health Information Technology for Economic and Clinical Health (HITECH), and other data 
analysis teams. State Medicaid programs also rely on data-sharing efforts to support 
requirements for screening providers and suppliers.  CMS is focused on transitioning PECOS to 
a modernized, enterprise resource that is a platform for all provider/supplier enrollments across 
Medicare, Medicaid, and other CMS programs.  This single platform is intended to allow 
streamlining and consistency in user workflows and standardize interfaces with systems internal 
and external to CMS.   
  
In FY 2021, CMS made significant changes to PECOS to simplify access, improve usability and 
enhance the security of the system, including the following changes:   
 
  Updated PECOS to support the integration of new site visit contractors data, including 
DME site visits;  
  Made enhancements to the State Medicare Report to allow state Medicaid agencies to 
easily access Medicare screening and revalidation information;  
  Implemented Home Infusion Therapy as a new supplier type and incorporated necessary 
extract changes related to the supplier type; 
  Updated PECOS to include two new physician specialtiesMicrographic Dermatologic 
Surgery (MDS) and Adult Congenital Heart Disease (ACHD);  
  Implemented necessary changes to support provider enrollment using waivers and 
flexibilities during the PHE;  
  Implemented the enhancements necessary to ensure all Part B CMS-588 Electronic Funds 
Transfer (EFT) data that flows to the claims system comes directly from PECOS;  
 
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  Continued enhancing and streamlining the PECOS interface to better assist providers 
with application submission and MACs in processing Medicare applications;  
  Implemented enhancements to the APS and Unified Global Extract (UGE) files by 
adding additional data elements to serve stakeholder needs better; 
  Cleaned up the Death Master File (DMF) and Medicare Exclusion Database (MED) data 
and implemented process improvements for data quality and fraudulent claims 
prevention; 
  Added geolocation information for the practice location addressees to support access to 
care analysis for provider appeals process, and 
  Established a disaster recovery process using the Disaster Recovery as a Service 
(DRaaS). This provides the PECOS system the ability to failover and failback for all 
three PECOS environments (Development, Validation, and Production). 
  
Medicaid Screening and Enrollment 
As part of its oversight role in Medicaid, CMS works closely with state Medicaid agencies 
(SMAs) to provide regulatory guidance, technical assistance, and other support with respect to 
provider screening and enrollment.  SMAs can comply with federally required Medicaid 
screening and enrollment requirements by using CMSs Medicare screening results for dually-
enrolling providers, eliminating the need and burden associated with states re-screening such 
applicants.  States may use Medicare screening data, including site visits, payment of application 
fees, and FCBCs.  For Medicaid-only FFS providers, SMAs must at a minimum follow the same 
risk-based screening procedures as required for Medicares screening and enrollment process. 
 
During FY 2021, CMS continued to expand its efforts to assist states with meeting Medicaid 
screening and enrollment requirements.  These efforts include enhanced sharing of Medicare 
enrollment and screening data with states, enhancing the data compare service to help states 
identify providers for which the state is able to rely on Medicares screening, providing technical 
assistance to states through individual state calls, publishing additional guidance in the Medicaid 
Provider Enrollment Compendium (MPEC), continuing monthly Technical Assistance Group 
(TAG) calls, and establishing a TAG call dedicated solely to screening and enrolling Medicaid 
managed care network providers. 
 
CMS shares the Medicare provider enrollment record via the PECOS administrative interface 
and in bulk data extracts from PECOS.  Additionally, CMS launched the PECOS States page in 
January 2017, and included provider enrollment information such as Medicare enrollment status, 
site visit information, fingerprint results, ownership information, Medicare risk levels, and more.  
Since May 2016, CMS has offered the data compare service that more easily enables a state to 
rely on Medicares screening, in lieu of conducting state screening.  Using the data compare 
service, a state provides an extract of its actively enrolled provider population to CMS and then 
CMS returns information to the state indicating for which providers the state is able to rely on 
Medicares screening.  CMS has made enhancements to this service, which include tailoring the 
type of comparison to meet a states specific needs (for example, supplying provider ownership 
information reported to Medicare, practice location information, deactivated National Provider 
Identifiers (NPIs) and deceased providers).  In FY 2018, CMS launched the Data Exchange 
(DEX) system, which is used to share data among CMS and the separate Medicaid programs of 
 
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every state.  This system stores all state-submitted for cause terminations as well as all Medicare 
revocations, and HHS-OIG exclusion data, and enhances collaboration, improves reporting, and 
creates transparency through this process.  In FY 2021, CMS continued the Medicaid screening 
pilot process, that began with Iowa and Missouri, to screen Medicaid-only providers through its 
APS system on behalf of states and produce a report of providers with licensure issues, criminal 
activity, and Do Not Pay activity.  CMS believes centralizing this process will improve 
efficiency and coordination across Medicare and Medicaid, reduce state and provider burden, 
and addresses one of the biggest sources of error as measured by the Payment Error Rate 
Measurement (PERM) program today.  In 2021, CMS continued to expand the pilot to other 
states.  Currently, Oklahoma, Nevada, North Dakota, Tennessee, Colorado, Rhode Island, 
Oregon, and West Virginia are participating in the pilot and CMS continues to work with other 
states to gauge their interest. 
 
CMS provides ongoing guidance, education, and outreach through targeted technical assistance 
to states on federal requirements for Medicaid screening and enrollment.  In addition, CMS 
continues to publish updates to the Medicaid Provider Enrollment Compendium (MPEC), which 
is sub-regulatory guidance designed to assist states in applying certain regulatory requirements.  
The latest update published in March 2021 clarified Medicaid screening and enrollment policies 
and procedures for the state Medicaid agencies.23 
 
Medical Review  
  Accuracy reviews  
CMS uses the Medical Review Accuracy Contractor (MRAC) to conduct medical 
reviews of claim determinations made by the Medicare Medical Review Contractors 
(MRCs).  MRCs include the MACs, UPICs, and the Supplemental Medical Review 
Contractor (SMRC).  In 2021, the MRAC also assisted with measuring the accuracy of 
medical review conducted by the RACs while a procurement for the RAC Validation 
Contractor (RVC) was underway.  The MRAC helps CMS by measuring the accuracy 
rate for each contractor, to ensure the contractors are consistent in their medical review 
decisions, and feeds information into the Award Fee Component for the MACs to 
determine where policy/issues/medical review inconsistencies may be present.  CMS 
performs a number of accuracy reviews using its own clinicians; however, the MRAC is 
able to complete more accuracy reviews and provides additional analysis to CMS.  
 
  Prior Authorization  
In a final rule, CMS established an initial Master List of certain DMEPOS that are 
frequently subject to unnecessary utilization and established a prior authorization process 
for these items.   
 
In FY 2021, CMS continued the prior authorization of certain DMEPOS items. CMS 
requires prior authorization as a condition of payment on 40 power mobility device codes 
and five pressure reducing support service codes.  Beginning on September 1, 2020, prior 
 
23 March 2021 Medicaid Provider Enrollment Compendium  
https://www.medicaid.gov/sites/default/files/2021-05/mpec-3222021.pdf 
 
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authorization of six lower limb prosthetic codes were required in California, Michigan, 
Pennsylvania, and Texas.  Prior authorization for these codes expanded nationwide on 
December 1, 2020.24  The DME MACs review requests for prior authorization for the 
noted items, communicate decisions with suppliers and physicians, and provide ongoing 
education and customer service. 
 
In FY 2020, CMS finalized a regulation through the Calendar Year 2020 Medicare 
Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center 
Payment System Final Rule (CMS-1717-FC) establishing a nationwide prior 
authorization process and requirements for certain hospital outpatient services that 
demonstrate significant increases in volume.  Beginning July 1, 2020, CMS required 
prior authorization for the following services:  blepharoplasty, botulinum toxin injections, 
panniculectomy, rhinoplasty, and vein ablation.  In FY 2021, as part of the Calendar Year 
2021 Outpatient Prospective Payment System/Ambulatory Surgical Center Final Rule 
(CMS -1736-FC), CMS added cervical fusion with disc removal and implanted spinal 
neurostimulators to the prior authorization process effective July 1, 2021.  This process 
serves as a method for controlling unnecessary increases in the volume of these services.  
The MACs review requests for prior authorization for the noted services, communicate 
decisions to providers, and provide ongoing education and customer service. 
 
  Comparative Billing Reports  
Comparative Billing Reports (CBRs) are educational tools providers can use to support 
efforts to protect the Medicare Trust Fund.  These reports compare an individual provider 
or suppliers billing and/or prescribing practices for a specific billing code, policy group, 
or service with the billing and/or prescribing practices of that providers or suppliers 
peers in the same state and/or specialty, and national averages.  CBRs inform providers 
about Medicare coding, billing, and coverage guidelines and strategies for implementing 
self-audit processes into their practices, where appropriate.  Currently, CBRs are 
available for download by the provider or supplier on a secure electronic portal as well as 
mailed in full via postal mail.  Since 2011, CBRs have been issued on topics such as 
physical therapy, opioids, and orthoses claims.  Typically, CBRs are sent to 
approximately 5,000 outlier providers per topic based on data analysis for a defined 
period of time.  Topics are based on Government Accountability Office (GAO) and HHS-
OIG reports, Comprehensive Error Rate Testing program findings, and agency and 
contractor data analysis.  A CBR does not necessarily indicate improper billing and/or 
prescribing by the provider and only in select instances are providers and suppliers 
referred for additional review or education.  In FY 2021, CMS issued a total of eleven 
CBRs on nine unique topics areas including critical care, comprehensive eye 
examinations, chronic care management, and wound debridement.    
 
 
24 Prior authorization for these lower limb prosthetic codes was originally scheduled to begin in California, 
Michigan, Pennsylvania, and Texas on May 11, 2020, and nationwide on October 8, 2020; however, CMS 
temporarily delayed implementation due to the COVID-19 PHE.  
 
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Continue to Build States Capacity to Protect Medicaid 
CMS assists states in building their internal capacity to conduct program integrity activities for 
their Medicaid programs.  CMS continues to use HCFAC program discretionary funds and other 
funding sources to develop and implement enterprise systems that support state Medicaid 
programs.  In particular, the Medicaid and CHIP Business Information Solution (MACBIS) 
initiative will improve the ability of CMS and states to gather and analyze data that will support 
program integrity activities.  MACBIS is a CMS enterprise-wide initiative providing products 
and services to modernize and transform information and data exchanges with states and other 
key stakeholders aimed at improving monitoring, oversight, evaluation, and inspect program 
integrity of the overall Medicaid and CHIP programs.  MACBIS provides program, operational 
(such as T-MSIS), financial, pharmacy, quality, and business performance data to key 
stakeholders to assist in preventing fraud, waste, and abuse.  
 
HCFAC funding also supports the preparation and dissemination of educational toolkits for 
states to use to enhance awareness of Medicaid fraud, waste, and abuse among providers, 
beneficiaries, managed care organizations, and others.  States participate in and receive support 
and technical assistance and education from CMS through: 
 
  Medicaid Technical Advisory Groups,  
  Voluntary state assistance site visits for technical assistance and education, 
  Webinars, 
  Medicaid Integrity Institute (MII), 
  Provider screening and enrollment strategies,  
  Onsite/virtual focused program integrity reviews,  
  Provider audits and investigations through the five UPICs, 
  Desk reviews of state processes and procedures, and  
  Payment Error Rate Measurement (PERM) corrective action plan and Medicaid 
Eligibility Quality Control (MEQC) oversight    
 
CMS also identifies areas of improvement and works with states to make sure their integrity 
programs are robust. 
 
Health and Welfare Special Review Teams  
The Health and Welfare Special Review Teams (H&W SRT) project began in late September 
2018 and has historically been performed with the assistance of a contractor.  The purpose of this 
project is to ensure that state quality monitoring methodologies are efficiently and effectively 
preventing, detecting, and remediating all instances of abuse and/or neglect to beneficiaries in 
home and community-based settings, including group homes and assisted living programs.  The 
H&W SRT is in the process of analyzing all statewide Home and Community-Based Services 
(HCBS) data available for all states to identify states to receive onsite or virtual reviews.   
 
As of August 2021, 10 reviews had been conducted, including onsite reviews in Ohio, 
Massachusetts, Maryland, Oregon, the District of Columbia, California, Nebraska, West 
Virginia, Montana, and a virtual review for Maine.  In January 2021, CMS began transitioning 
 
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these activities from the contractor to CMCS staff.  As of October 2021, these activities are now 
performed entirely by CMS.  
 
State Audit Compliance and Financial Management Oversight 
The State Audit Compliance and Financial Management Oversight projects began in September 
2020.  The purpose of these projects is to acquire contractor assistance for two separate efforts.  
The first is to perform data analysis, collection, and evaluation, including the use of statistical 
sampling techniques, to review data provided by states related to payments to health care 
providers to determine if Medicaid claims submitted by states for federal financial participation 
(FFP) are allowable under federal guidelines.  As a whole, this work supports the overall 
responsibility of CMS to ensure that all claimed expenditures meet statutory and regulatory 
requirements and are appropriate for the Medicaid program to provide efficient review of 
activities relating to the performance of Financial Management Reviews (FMRs).  The second 
effort will develop, implement, and align measures that improve CMS approach to the annual 
OMB single state agency (SSA) audit and identify opportunities to optimize the compliance 
supplement that guides single state auditors as they review state Medicaid and CHIP programs.  
This project will also improve the analysis of the findings resulting from SSA and HHS-OIG 
audits of state Medicaid and CHIP programs to assist CMS in better identifying high risk policy 
areas.  CMS is actively engaged with contractors on both of these initiatives and anticipates 
continued contractor engagement in these areas through FY 2023.       
 
Medicaid Enterprise System 
State Medicaid agencies develop, implement, operate and maintain information technology 
systems to support their program operations.  The systems generally include eligibility and 
enrollment, managed care payment, encounter data and/or claims processing, pharmacy 
management, etc.  These systems work in concert with one another and must adhere to federal 
regulation25 and guidance, including the Medicaid Information Technology Architecture (MITA) 
framework, several standards and conditions,26 and certification criteria.  Adhering to these 
mandates promotes the consistency of business and technical processes and IT platforms, as well 
as standards across the Medicaid Enterprise.  As noted above, CMS is working closely with 
states to support the delivery of comprehensive digital service products for MACBIS, an 
enterprise-wide initiative to empower states and the federal government to perform monitoring 
and oversight, inspect program integrity, evaluate demonstrations, perform actuarial and quality 
of care analysis, negotiate waivers, and enable the sharing of comprehensive program data with 
states, stakeholders, and the research community. 
 
CMS provides independent technical assistance to states with respect to IT and policy 
requirements, including monitoring and oversight, working with state-specific system 
requirements, IT system builds, and associated interfaces for all states and the territories.  
Required technical artifacts are analyzed and tracked to assess state progress.  CMS State 
 
25 Mechanized Claims Processing and Information Retrieval Systems (90/10) Final Rule 
https://www.federalregister.gov/documents/2015/12/04/2015-30591/medicaid-program-mechanized-claims-
processing-and-information-retrieval-systems-9010). 
26 https://www.medicaid.gov/medicaid/data-and-systems/mita/index.html 
 
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Officers remain closely engaged with states during the implementation as well as the operation 
phase of the IT initiative.  As part of the engagement, project reports and evidence are reviewed 
on a regular basis to identify risks, challenges, barriers and/or opportunities to better ensure 
project success.  As systems enter production operations (aka go-live), they are reviewed in-
depth by CMS to ensure that the system functions appropriately to implement the policy 
requirements (e.g., for provider enrollment or for eligibility and enrollment).  Certain state 
systems also undergo a certification review conducted by CMS as an additional step in ensuring 
proper operation.   
 
Federal and state governments have invested heavily in the development and operations of 
Medicaid claims processing and information retrieval systems that engage in high volume 
transactions.  CMS is working to release updated Medicaid Enterprise Systems (MES) 
Certification guidance to ensure a more comprehensive analysis of CMS funded state systems 
functionality.  Moving forward, CMS is focused on increasing accountability and state flexibility 
by creating an outcomes-based oversight model for state systems certification.  This approach 
will focus on producing timely and accurate claims payment results, properly screening and 
enrolling providers, member management, and comprehensive data analytics and reporting 
capabilities including timely and accurate submissions of required federal reporting such as T-
MSIS.    
 
Improper Payment Rate Measurement and Increased Accountability in Medicaid and CHIP 
Programs 
The Payment Integrity Information Act of 2019 requires each agency to periodically review 
programs it administers and identify programs that may be susceptible to significant improper 
payments.  For those programs determined to be susceptible, the agency is required to estimate 
the amount of improper payments, submit those estimates to Congress, and report on actions the 
agency is taking to reduce improper payments.  The Medicaid and CHIP programs have been 
identified as being at risk for significant improper payments.  CMS estimates improper payment 
rates in Medicaid and CHIP through the PERM program.  The improper payment rates are based 
on reviews of the FFS, managed care, and eligibility components of Medicaid and CHIP in the 
year under review.  CMS measures Medicaid and CHIP improper payment rates using a 17-state 
rotation so that each state is reviewed once every three years.  States are required to submit 
corrective action plans to CMS to address the root causes of errors and deficiencies in an effort 
to reduce improper payments. 
 
In the HHS FY 2021 Agency Financial Report (AFR),27 CMS reported the national Medicaid 
improper payment rate based on measurements conducted in FYs 2019, 2020, and 2021.  The FY 
2021 national Medicaid improper payment rate was 21.69 percent, representing $98.72 billion in 
gross federal improper payments.  The FY 2021 national Medicaid improper payment rates by 
component are 13.90 percent for Medicaid FFS, 0.04 percent for Medicaid managed care, and 
16.62 percent for Medicaid eligibility.  The FY 2021 national CHIP improper payment rate was 
31.84 percent, representing $5.37 billion in gross federal improper payments.  The FY 2021 
 
27 https://www.hhs.gov/about/agencies/asfr/finance/financial-policy-library/agency-financial-reports/index.html  
 
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national CHIP improper payment rates by component are 13.67 percent for CHIP FFS, 0.48 
percent for CHIP managed care, and 28.71 percent for CHIP eligibility. 
 
The majority of Medicaid and CHIP improper payments are a result of eligibility errors 
discovered through the reintegration of the PERM eligibility component.  A federal contractor28 
conducts the eligibility measurement, allowing for consistent insight into the accuracy of 
Medicaid and CHIP eligibility determinations and increased oversight of identified 
vulnerabilities.  Based on the measurement of all three cycles of states, eligibility errors are 
mostly due to insufficient documentation to verify eligibility or non-compliance with eligibility 
redetermination requirements.  The majority of the insufficient documentation errors represent 
both situations where: 
 
  The required verification was not done at all, and 
  There is indication that the eligibility verification was initiated but there was no 
documentation to validate the verification process was completed.  
 
These insufficient documentation situations are related primarily to income verification. 
 
A smaller portion of improper payments are considered a known monetary loss to the program, 
which are claims where CMS has sufficient information to determine that Medicaid payment 
should not have occurred or should have been made in a different amount. 
 
The CHIP improper payment rate was also driven by claims where the beneficiary was 
inappropriately deemed eligible for CHIP, but was eligible for Medicaid, mostly related to 
beneficiary income, third party insurance, or household composition/tax filer status.  
Additionally, state non-compliance with provider screening, revalidation, enrollment, and NPI 
requirements is a major contributor to the Medicaid and CHIP improper payment rates.  
 
CMS works closely with states to develop state-specific corrective action plans to reduce 
improper payments.  All states are responsible for implementing, monitoring, and evaluating the 
effectiveness of their plans, with assistance and oversight from CMS. 
 
Additional information on the Medicaid and CHIP improper payments can be found in the FY 
2021 Agency Financial Report29 and CMS websites.30   
 
Medical Loss Ratio Examinations 
CMS is conducting examinations of Medicaid managed care plans financial reporting in 
selected states, focused on Medical Loss Ratio (MLR) and rate setting.  CMS conducted a risk-
based analysis to select additional states for review beginning in FY 2021.  In January 2021, 
CMS initiated a review of Oregons 16 Coordinated Care Organizations MLR reporting for the 
 
28 Prior to FY 2014, the eligibility component was reviewed and self-reported by the states to CMS for national 
improper payment reporting. 
29 https://www.hhs.gov/about/agencies/asfr/finance/financial-policy-library/agency-financial-reports/index.html 
30 https://www.cms.gov/ImproperPayments 
 
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Medicaid managed care population, and this review is currently ongoing. 
 
Medicaid 1115 Financial Oversight 
Medicaid section 1115 demonstrations are an increasingly important vehicle for state innovation 
in Medicaid program development, expansion and financing.  Forty-seven states and the District 
of Columbia operate at least one section 1115 demonstration, and there are approximately 80  
active demonstrations representing estimated federal outlays of $192.8 billion in FY 2021.  The 
Medicaid section 1115 demonstration portfolio continues to grow in number, federal outlays, and 
policy importance and complexity.  CMS has committed additional staff and reorganized section 
1115 demonstration work to develop and implement a more robust approach to monitor and 
oversee these demonstrations.   
 
CMS is exploring refinements to its section 1115 demonstration budget neutrality policy to 
assure fiscal integrity and to better accommodate certain investments through the use of section 
1115 expenditure authority to strengthen the provider safety net and make advancements in 
closing health disparity gaps.  The goal is to develop a budget neutrality policy that can adapt to 
real-world factors and maintain a balance between integrity and flexibility.31  In addition, to 
strengthen the review of state-submitted quarterly budget neutrality performance reports, CMS 
has developed and continues to maintain a standardized budget neutrality reporting tool for states 
that will need to be updated for any modifications to budget neutrality policy. 
   
CMS continues to modify and improve this tool based on user feedback to continue improving 
consistency in state reporting and CMS tracking of spending under section 1115 demonstrations.  
The section 1115 IT reporting system, Performance Metrics Database and Analytics (PMDA), 
continues to be updated to support this revised workflow and the documentation of findings from 
the budget neutrality reviews.  Most recently, CMS engaged contractor support on an internal 
initiative to more thoroughly document and train staff on the underlying principles, assumptions 
and data to be used in the formulation of the budget neutrality parameters reflected in the 
demonstration approval documents.   
 
Beyond budget neutrality, CMS continues to expand and make more robust its oversight of the 
integrity of demonstration implementations.  This has included the continued training on and 
implementation of standard operating procedures, as well as continuing to utilize user feedback 
to make updates and refinements to PMDA to strengthen internal controls and development of 
standardized reports that permit more efficient and meaningful review of demonstration 
performance relative to expectations established in the demonstration special terms and 
conditions.  Relatedly, CMS continues to provide technical assistance to states to assure they 
understand and implement these more robust monitoring standards.   
 
CMS staff also continue to develop specific monitoring metrics for demonstrations testing high 
profile policy areas such as substance use disorder and severe mental illness.  CMS staff and 
states are provided with training to understand the impact of these metrics. 
 
 
31 https://www.medicaid.gov/sites/default/files/federal-policy-guidance/downloads/smd18009.pdf 
 
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Home and Community-Based Services Rate Review and Fiscal Integrity Project 
The Rate Review and Fiscal Integrity Project improves the efficiency and effectiveness of rate 
setting oversight and financial reporting for the Programs of All-inclusive Care for the Elderly 
(PACE), and HCBS waiver and state plan programs.  Project tasks include rate methodology 
review and analysis, data compilation, electronic visit verification system (EVV) required for 
personal care services and home health care services under Medicaid, and health and welfare 
activities to help states prevent fraud, waste and abuse monitoring and education and training for 
states and CMS staff.  Specifically, this includes: 
  Ensuring that states are compliant with the HCBS assurances as described in section 
1915(c) of the Social Security Act;  
  Analyzing current state section 1915(c) payment and financing trends, impacts to section 
1915(c) programs resulting from the COVID-19 PHE, and waiver program updates to 
strengthen and enhance access to section 1915(c) waiver services; 
  Providing education and training related to financial accountability, rate development, 
EVV systems, and incident management systems;  
  Assessing state compliance with EVV implementation requirements outlined in section 
12006 of the 21st Century Cures Act (Cures Act); and 
  Conducting environmental scans of states incident management systems to identify 
methods to detect unreported incidents and methods for monitoring the health and safety 
of Medicaid participants.  
 
A new contract was executed to continue tasks within this project on September 30, 2020.  From 
October 1, 2020, to August 15, 2021, CMS completed 137 reviews of HCBS waivers for 38 
states and compiled reports with findings pertaining to the waivers fiscal and quality 
components for each.  Findings from fiscal and quality reviews are aggregated in an annual 
report each year, which helps inform technical assistance activities and guide program 
improvements.  CMS also conducted 28 PACE reviews during this period, spanning 25 states. 
 
Since October 1, 2020, eleven presentations have been completed and made available to state 
staff via technical assistance calls and web posting.  They cover topics such as trends in HCBS 
waiver program financing, the role of family caregivers in HCBS, billing validation and 
oversight with EVV and findings and recommendations from the CMS survey of states incident 
management systems for HCBS waivers.  
 
Extend Work in Medicare Parts C and D 
CMS is committed to expanding program integrity activities in capitated, managed care 
programs in Medicare.  For example, CMS has strengthened oversight of Medicare Part C and 
Part D plan sponsors by conducting audits that detect whether plans are delivering the 
appropriate health care services and medications for which they are being paid. 
 
Plan Program Integrity Medicare Drug Integrity Contractor (PPI MEDIC) and Investigations 
MEDIC (I-MEDIC) 
As part of CMSs ongoing efforts to ensure effective oversight of the Medicare Part C and Part D 
programs, CMS contracts with two Medicare Drug Integrity Contractors (MEDICs), known as 
 
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the Plan Program Integrity Medicare Drug Integrity Contractor (PPI MEDIC) and the 
Investigations Medicare Drug Integrity Contractor (I-MEDIC).  The PPI MEDIC has a national 
focus related to plan oversight pertaining to the following Part C and Part D program integrity 
initiatives:  identification of program vulnerabilities, data analysis, health plan audits, outreach/ 
education, and law enforcement support, which includes requests for information (RFI).  As a 
result of the PPI MEDICs data analysis projects and Part D plan sponsor self-audits, $8.68 
million was recovered from Part D sponsors in the first nine months of FY 2021.  The primary 
purpose of the I-MEDIC is to detect, prevent, and proactively deter fraud, waste, and abuse for 
high-risk prescribers/pharmacies in Medicare Part C and Part D by focusing primarily on 
complaint intake and response, data analysis, investigative activities, referrals to law 
enforcement partners, and law enforcement support, which includes RFIs.  In FY 2021, the I-
MEDIC initiated 764 investigations; submitted 20 recommendations for provider revocations; 
submitted 251 referrals to law enforcement, including 56 immediate advisements; and submitted 
185 referrals to other entities, such as state pharmacy and medical boards, Medicare quality 
improvement organizations, and other Medicare contractors.  
 
Medicare Parts C and D Marketing Oversight   
Each year CMS analyzes Annual Notice of Change (ANOC) documents and takes compliance 
action against Part C Plans, also known as Medicare Advantage Organizations (MAOs), Part D 
Prescription Drug Plans (PDPs), Section 1876 Cost Plans, and Medicare-Medicaid Plans 
(MMPs) that fail to send timely and accurate ANOC documents to Medicare enrollees.  The 
ANOC provides Medicare enrollees with vital information that can affect their ability to make 
informed choices concerning their Medicare health care and prescription drug options.   
 
Program Audits  
CMS conducts program audits of Parts C and D plan sponsors (including organizations offering 
Medicare-Medicaid Plans) and PACE organizations to evaluate their delivery of health care 
services and medications to beneficiaries.  In order to conduct a comprehensive audit of a 
sponsors operation and maximize CMSs resources, scheduled Parts C and D program audits in 
2021, as well as in prior years, occur at the parent organization level, though PACE audits are 
conducted at the contract level.  
 
CMS audits all program audit areas for sponsors and PACE organizations unless an area is not 
applicable to the entitys operation, or CMS is conducting a focused audit.  Each sponsor or 
PACE organization that has deficiencies cited in its audit report is required to correct all of the 
deficiencies and undergo a validation audit or monitoring to ensure the issues have been 
corrected before the audit can be closed. 
 
In general, program audits give CMS reasonable assurance that sponsors and PACE 
organizations deliver benefits in accordance with the terms of their contracts and plan benefit 
packages.  However, CMS also has the authority to take enforcement actions, up to and including 
termination, if warranted, for findings that involve direct beneficiary harm or the potential to 
result in such harm. 
 
 
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CMS has greatly increased the level of transparency with respect to audit materials, the 
performance of audits, and the results of those audits, including any enforcement actions that 
may result.  CMS believes that program audits and consequences of possible enforcement actions 
are continuing to drive improvements in the industry and are increasing sponsors compliance 
with core program functions in the Medicare Parts C and D and PACE programs.   
 
Compliance and Enforcement 
CMS has a number of tools, including the imposition of administrative enforcement actions, to 
encourage program compliance.  These actions include: 
  CMPs; 
  Intermediate sanctions (i.e., suspension of marketing, enrollment, payment); and 
  CMS initiated contract terminations. 
 
CMS has the authority to take enforcement or contract termination actions against a Part C or 
Part D plan sponsor for program violations, including:  
 
  Substantially failing to comply with program and/or contract requirements,  
  Performance under a contract with CMS in a manner that is inconsistent with the efficient 
and effective administration of the Medicare Part C and Part D program requirements, 
and 
  Failure to substantially meet the applicable conditions of the Medicare Part C and D 
program. 
 
Part C Benefits Review Activities 
Each year, CMS requires Part C organizations to submit bids and plan benefit packages detailing 
how their Part C plans will provide coverage to beneficiaries for the following year.  MAOs 
submitted to CMS more than 6,900 Part C plan benefit packages on June 7, 2021 and project to 
cover more than 29.5 million enrollees in contract year 2022.  Bid and plan benefit submissions 
are reviewed to ensure they do not discriminate against beneficiaries and comply with CMS 
regulations.  Plan standards are established and communicated annually, and the following 
reviews are performed: 
 
  Low Enrollment PlansCMS evaluates existing Part C plans that have low total 
enrollment to make sure these plans are sustainable over time and protect beneficiaries 
from selecting a potentially unsustainable plan. 
 
  Total Beneficiary Cost (TBC)CMS evaluates increases in beneficiary cost sharing or 
decreases in plan benefits from one year to the next.  This evaluation ensures 
beneficiaries receive value in their benefit package selection and protects them from large 
increases in out-of-pocket costs. 
 
  Maximum Out of Pocket Costs (MOOP)CMS conducts this review to examine the 
maximum out-of-pocket costs for enrollees in Part C and protect beneficiaries from very 
high out of pocket medical costs. 
 
 
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  Service Category Cost-Sharing StandardsCMS evaluates the cost-sharing that plans 
include in their bids and plan benefit packages to ensure the plans do not exceed 
established limits and are not discriminatory.   
 
  Actuarial EquivalenceCMS reviews bids to make certain the estimated cost sharing 
presented in the bid is actuarially equivalent to the cost-sharing levels under FFS.  CMS 
currently examines four categories for actuarial equivalence and this review helps guard 
against plans imposing discriminatory cost-sharing on beneficiaries. 
  Supplemental BenefitsCMS conducts several reviews in this area, including a review 
of supplemental benefits that helps make sure that any optional supplemental benefits 
offered are of reasonable value, as well as a review to make certain the benefits are 
offered in a non-discriminatory fashion. 
 
CMS carefully conducts all of these reviews to ensure that plans make all necessary changes to 
their bids and plan benefit packages.  These reviews are conducted between early June and 
August, and, as necessary, involve communications with Part C organizations to correct issues 
and resubmit their bids and plan benefit packages.  Following bid and plan benefit approval, Part 
C organizations must complete the contracting process with CMS and may market to 
beneficiaries beginning October 1 of each year.  Part C benefit review standards and processes 
are intended to protect beneficiaries from discrimination and to ensure that Part C plans provide 
value to enrollees. 
 
Encounter Data Processing System 
CMS requires MAOs to submit encounter data for each item and service provided to MA plan 
enrollees.  CMS established and maintains the Encounter Data System (EDS), which to date, has 
collected approximately 7 billion encounter data records (EDRs).   
 
The encounter data detail each item and service provided to MAO enrollees.  These records are 
comparable in format and detail to claims FFS providers submit to the MACs.  The encounter 
data collected by the EDS will allow CMS to make more accurate payments reflecting the 
patterns of care and the predicted costs of diseases for MA enrollees.  CMS also uses the 
information to evaluate service utilization, assess quality of care, and assess the MAOs 
performance. 
 
Beginning in CY 2015, CMS began to use encounter data as an additional source of diagnoses to 
risk adjust payments to MAOs.  In CY 2016, CMS continued the transition and calculated risk 
scores using both Risk Adjustment Processing System (RAPS) and encounter data, with RAPS-
based risk scores weighted at 90 percent and encounter data-based risk scores weighted at 10 
percent.  In CY 2019, CMS increased the use of encounter data for calculating risk scores with 
encounter data-based risk scores receiving a weight of 25 percent and RAPS-based risk scores a 
weight of 75 percent.  In CY 2020, CMS continued the transition to using encounter data for risk 
adjustment and increased the weighting of encounter data-based risk scores to 50 percent and 
reduced the weighting of RAPS-based risk scores to 50 percent.  For CY 2021, CMS finalized a 
new blend of 75 percent encounter data-based risk scores and 25 percent RAPS-based risk 
 
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scores.  In CY 2022, CMS will calculate MAO risk scores using diagnoses entirely from 
encounter data and FFS data.   
 
Encounter Data Oversight and Integrity Activities 
Since complete and accurate encounter data are integral to risk adjustment payments and other 
uses of encounter data, CMS has developed an encounter data oversight and integrity plan to 
support efforts to ensure the completeness and accuracy of the MA data collected by CMS.  This 
plan aligns with direction provided by the GAO and lays out an incremental approach to assess 
and drive encounter data submission and quality over multiple years.  Major components of the 
plan include outreach, analysis, monitoring, and compliance of MAOs encounter data 
submissions. 
 
Improper Payment Rate Measurement and Increased Accountability in Medicare Advantage 
(Part C) and Medicare Prescription Drug Benefit Programs (Part D) 
Each year, CMS publishes national improper payment rates for Medicare Part C and Part D in 
accordance with the Payment Integrity Information Act of 2019.  
 
The Part C Improper Payment Measure (IPM) is an annual measurement of payment error for the 
Medicare Advantage (MA) program due to inaccurate diagnoses submitted by MA plans.  To 
calculate the projected IPM error rate, CMS selects a random sample of enrollees with one or 
more CMS Hierarchical Condition Categories (CMS-HCCs) and requests medical records to 
support each condition.  Independent coders abstract diagnoses from medical records, and the 
analytical contractor calculates corrected risk scores based on the abstracted diagnoses.  The 
difference between the original and corrected risk scores forms the basis to calculate the IPM. 
 
For FY 2021 (CY 2019), the projected Part C improper payment estimate is 10.28 percent, 
representing $23.19 billion in improper payments.  The Part C error rate estimate is not directly 
comparable to prior years because CMS refined the error rate calculation methodology as well as 
the denominator to only include Part C payments reviewed and at risk for diagnostic error.  Prior 
to FY 2021, the Part C denominator methodology reflected total MA payments and included 
some payments that were non-risk adjusted or were based on a different model resulting in a 
reported error biased downward, or potentially understated.   
 
In an effort to improve the Part C improper payment rate, CMS has implemented the following 
specific corrective actions:  
 
  Contract-Level Risk Adjustment Data Validation (RADV) Audits:  RADV audits are 
CMSs primary corrective action to recoup overpayments.  RADV uses medical record 
review to verify the accuracy of enrollee diagnoses submitted by MA organizations for 
risk adjusted payment.  CMS expects payment recovery will have a sentinel effect on risk 
adjustment data quality submitted by plans for payment because contract-level RADV 
audits increase the incentive for MA organizations to submit valid and accurate diagnosis 
information.  Contract-level RADV audits also encourage MA organizations to self-
identify, report, and return overpayments.  In FY 2021, CMS completed the payment year 
(PY) 2014 RADV audit medical record review phase and the PY 2015 RADV audit 
 
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medical record submission phase.  Due to COVID-19, CMS suspended the PY 2015 audit 
in March 2020 and resumed it in September 2020. 
 
  Part C Plan Sponsor Audits:  CMS conducts audits of Part C plan sponsors to reduce 
improper payments.  The audits conducted during FY 2021 consisted of three program 
integrity audits, with the goal of educating Part C plan sponsors on issues of fraud, waste, 
and abuse. 
 
  Training:  CMS conducted training sessions for Medicare Part C and Part D sponsors on 
program integrity initiatives, investigations, data analyses, and potential fraud schemes.  
In FY 2021, CMS held Opioid Education Missions via webinar in December 2020 and 
May 2021.  CMS also conducted an updated COVID-19 fraud, waste, and abuse webinar 
in February 2021 and an MA Organization and Prescription Drug Plan fraud, waste, and 
abuse webinar in August 2021.   
 
The Part D gross improper payment estimate reported for FY 2021 (based on the 2019 payment 
year) was 1.58 percent or $1.37 billion, which represents payment error related to PDE data.  For 
the Part D Improper Payment Measurement, CMS measures the inconsistencies between the 
information reported on PDEs and the supporting documentation submitted by Part D sponsors: 
prescription record hardcopies (or medication order, as appropriate), and detailed claims 
information.  Based on these reviews, each PDE in the audit sample is assigned a gross drug cost 
error.  A representative sample of beneficiaries undergoes a simulation to determine the Part D 
improper payment estimate.   
 
To improve the Part D error rate, CMS has implemented the following key corrective actions:   
 
  Part D Plan Sponsor Audits:  CMS conducts audits of Part D plan sponsors, with a focus 
on drugs that are at high risk of improper payments.  Each type of audit is different in 
scope but with the same goal of educating Part D plan sponsors on issues of fraud, waste, 
and abuse, as well as identifying, reducing and recovering inappropriate payments under 
Part D.  In FY 2021, CMS conducted 13 Part D audits. 
 
  Training:  In FY 2021, CMS continued national training sessions on payment and data 
submission with detailed instructions as part of the improper payment estimation process 
for Part D sponsors.   
 
  CMS also conducted in-person training sessions for Medicare Part C and Part D sponsors 
on program integrity initiatives, investigations, data analysis, and potential fraud 
schemes.  In FY 2021, CMS held Opioid Education Missions via webinar in December 
2020 and May 2021.  CMS also conducted an updated COVID-19 fraud, waste, and 
abuse webinar in February 2021 and a Medicare Advantage Organization and 
Prescription Drug Plan fraud, waste, and abuse webinar in August 2021.   
 
  Outreach:  CMS continued formal outreach to plan sponsors with respect to invalid or 
incomplete documentation.  CMS distributed Final Findings Reports to all Part D 
 
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sponsors participating in the PDE review process.  This report provided feedback on their 
submission and validation results against an aggregate of all participating plan sponsors.  
 
Additional information on Medicare Part C and Part D improper payments can be found in the 
FY 2021 Agency Financial Report32 and CMS website.33 
 
CMS Exchange Program Integrity 
 
The Federally-facilitated Exchanges (FFEs) and the State-based Exchanges (SBEs) continued to 
expand their focus on program integrity.  In FY 2021, CMS triaged more than 15,000 complaints 
from consumers who alleged they were enrolled in FFE insurance policies without their consent 
or that incorrect information was submitted on an application by an insurance agent or broker, or 
that other misconduct had occurred.  CMS worked with health insurance issuers to verify 
unauthorized enrollments and cancel over 6,000 fraudulent policies.  CMS and its program 
integrity contractors continuously analyzed plan enrollments and other types of data to identify 
trends and early warning signs of fraud, conducted dozens of investigations of outlier and high-
risk agents and brokers, and referred egregious cases to HHS-OIG and state Departments of 
Insurance (DOI).  CMS also performed license verifications to identify agents and brokers 
potentially noncompliant with states licensure statutes and regulations and reported license non-
compliance to the appropriate DOIs.  When cases of agent and broker misconduct warranted it, 
CMS took administrative actions including blocking access to the FFE to prevent consumer 
harm, and suspending or terminating CMSs agreements with the agents and brokers.  CMS also 
supported ongoing HHS-OIG and DOI investigations by fulfilling requests for records regarding 
consumer FFE enrollments and financial assistance, complaints, and results of CMS 
investigations.  Thirty-two (32) such requests were received and fulfilled in FY 2021.  Last, 
CMS hosted meetings with SBEs every other month to share best practices for identifying and 
deterring fraud and notifying SBEs of specific schemes and schemers being investigated by the 
FFE and/or one or more SBEs. 
 
Following an FY 2016 risk assessment, HHS concluded the APTC program is susceptible to 
significant improper payments and is required to establish and report an improper payment 
estimate.  In FY 2021, the Department commenced the improper payment measurement program 
for the FFE and anticipates reporting an improper payment estimate for the FFE in the FY 2022 
AFR. HHS continues to develop the improper payment measurement methodology for the SBEs. 
As with similar HHS programs, developing an effective and efficient improper payment 
measurement program requires multiple time-intensive steps, including contractor procurement; 
developing measurement policies, procedures, and tools; and extensive pilot testing to ensure an 
accurate improper payment estimate. 
 
 
 
32 https://www.hhs.gov/about/agencies/asfr/finance/financial-policy-library/agency-financial-reports/index.html  
33 https://www.cms.gov/ImproperPayments 
 
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Provide Greater Transparency into Program Integrity Issues within Medicare and 
Medicaid 
CMS is dedicated to providing greater transparency into program integrity issues through 
education, outreach, partnership, strategic communications, and data releases.  CMS is well-
positioned to work with its partners and stakeholders to share promising practices and lessons 
learned in program integrity.  Increased transparency and accountability ensure program 
efficiency and effectiveness. 
 
Healthcare Fraud Prevention Partnership (HFPP)  
The HFPP is a voluntary, public-private partnership consisting of the Federal Government, state 
agencies, law enforcement, private health insurance plans, and health care anti-fraud 
associations.  The overall mission of the HFPP is to position itself as a leading body for the 
health care industry to reduce fraud, waste, and abuse by:   
  Providing an unparalleled cross-payer data source, representing the full spectrum of the 
health care industry, to enable the performance of sophisticated data analytics and 
information-sharing for the benefit of all partners; 
  Achieving meaningful participation by partners and establishing strategic collaborations 
with diverse stakeholders; and 
  Leveraging HFPP resources and relationships to generate real-time, comprehensive 
approaches that materially impact efforts to reduce health care fraud, waste, and abuse. 
 
Section 1128C(a) of the Social Security Act (42 U.S.C. 1320a7c(a)) was amended by the 
Consolidated Appropriations Act, 2021 to provide explicit statutory authority for the Healthcare 
Fraud Prevention Partnership including the potential expansion of the public-private partnership 
analyses. 
 
In FY 2021, the HFPP reached a total membership level of 222 partner organizations, comprised 
of five federal agencies, 56 law enforcement agencies, 13 associations, 98 private payers, and 50 
state and local partners.  
 
The HFPP uses a diverse variety of approaches to identify vulnerabilities in Partner data.  These 
methods include standard searches to detect anomalies that may implicate the existence of fraud, 
waste, and abuse; scanning of incoming claims information against existing data sets, such as 
lists of deactivated providers; creation of reference files that list providers that may be suspect 
based on known risks; and creation of informational content to support stakeholders in 
addressing vulnerabilities (e.g., white papers).  The HFPP has also expanded its study 
methodology to collect frequently updated data, including, and consistent with all applicable 
privacy requirements, personally identifiable information (PII) and protected health information 
(PHI).  The HFPP is currently using professional and institutional claims and has begun 
collecting pharmacy claims to be used in studies beginning in FY 2022.  
 
Over 35 billion professional claim lines were submitted by partners through FY 2021 for the 
purpose of conducting cross-payer analyses, and the HFPP has commenced 13 studies during FY 
2021 providing participating partners with detailed results that can be used for corrective actions 
 
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within their organizations.  Examples of studies initiated in FY 2021 include the identification of 
problematic billing in the following areas: 
 
  Self-care/home management training; 
  Deactivated rendering providers; 
  Sleep studies; 
  Allergy services; 
  Psychotherapy, physical therapy/occupational therapy improbable days; and 
  COVID-19 add-on laboratory testing. 
 
The HFPP also continued its efforts to foster collaboration among partners in FY 2021 by 
hosting five virtual information-sharing sessions and initiating a new Executive Board, that will 
meet quarterly.  These meetings are used to share fraud schemes and provider alerts, provide 
updates on law enforcement activities, and strategize on how to broaden the HFPPs impact in 
the private and public sectors.   
Open Payments   
Open Payments is a statutorily required national transparency program designed to provide the 
public with information regarding the financial relationships between applicable manufacturers 
and group purchasing organizations (collectively referred to as reporting entities) and physicians 
and teaching hospitals (collectively referred to as covered recipients).  As of January 1, 2021, 
covered recipients also include physician assistants and advanced practice nurses. Open 
Payments data includes payments and other transfers of value (such as gifts, honoraria, 
consulting fees, research grants, and travel reimbursements) that reporting entities provide to 
covered recipients, as well as the ownership and investment interests held by physicians or their 
immediate family members in these companies.   
HHS is required to collect and display this information, which is self-reported annually by 
reporting entities, on the public website, where the reported data can be searched, downloaded, 
and evaluated.   
  
For Program Year 2020 (January 1, 2020-December 31, 2020), CMS published over $9.12 
billion in payments and ownership and investment interests that were made from reporting 
entities to covered recipients.  This amount is comprised of approximately 6.38 million total 
records attributable to 487,152 physicians and 1,213 teaching hospitals.  Payments in the three 
major reporting categories included:  
  
 $2.03 billion in general (i.e., non-research related) payments;  
       
 $5.97 billion in research payments; and  
       
  $1.12 billion of ownership or investment interests held by physicians or their immediate 
family members.  
  
Over the past seven years, CMS has published a total of 78.55 million records, accounting for 
$53.01 billion in payments and ownership and investment interests.  
 
 
 
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Administration for Community Living 
 
The mission of the Senior Medicare Patrol (SMP) program is to empower and assist Medicare 
beneficiaries, their families, and caregivers to prevent, detect, and report health care fraud, 
errors, and abuse through outreach, counseling, and education.  In FY 2021, HHS allocated $20.0 
million in HCFAC appropriations, plus an additional $35,621 in carryover funding from FY 
2020 to the Administration for Community Living (ACL) to support SMP program infrastructure 
and provide grants to SMPs in 54 states and territories.  
 
Until FY 2016, ACL received funding from a separate Congressional appropriation (the Older 
Americans Act) to support SMP grants.  However, the Consolidated Appropriations Act of 2016 
required the SMP program to be fully funded by CMS discretionary HCFAC appropriations 
beginning in FY 2016.  This language was modified in FY 2018 to require that the program be 
funded at no less than $17.6 million, still from CMS discretionary HCFAC appropriations.  In   
FY 2021, Congress increased the floor for SMP funding to $20.0 million from CMS 
discretionary HCFAC appropriations.  In addition, Congress provided ACL, for the first time, 
with authority to be funded from CMS discretionary appropriations, wedge funding or both.  
Based on that authority, in FY 2021 ACL requested and received $2.0 million for a one-time 
effort supported by wedge funding to expand the virtual capacity of the program both nationally 
and at the state and local level.   
 
SMP Project Activities and Outcomes 
 
ACL uses the majority of its HCFAC allocation to fund SMP projects in every state, the District 
of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands.  During FY 2018, ACL held a 
new SMP grant competition and awarded $15.5 million in funding to 54 SMPs nationwide, 
including eight new SMP grantees.  In FY 2021, ACL provided continuation awards to the 54 
grantees totaling $17.6 million.  Each SMP grantee received a standard, base amount of funding 
to support the operation of their project, as well as an additional, variable amount of funding 
based on the number of Medicare beneficiaries residing in the state and the rural areas of the 
state.  SMP projects use this funding to educate and empower Medicare beneficiaries to prevent, 
detect, and report Medicare fraud, errors, and abuse.   
 
COVID-19 Fraud Schemes 
Fraud schemes relating to COVID-19 became prevalent beginning in March 2020 and continued 
throughout FY 2021.  The majority of complaints received by the SMP grantees continued to 
relate to COVID-19 treatments, testing, vaccines, and cures, followed by other pandemic related 
fraud.  Other COVID-19 related fraud identified by the SMP program included fraud related to 
health insurance solicitation, false charities and investments schemes, and financial scams.  
Other schemes reported included those related to general COVID-linked medical services or 
pandemic supplies and equipment.  Most reported COVID-19 fraud or schemes occurred in-
person, followed by fraud via text, telephone and internet attempts.  Though the SMP programs 
education and outreach activities were largely limited to virtual methods during this period as 
opposed to typical face-to-face means, they responded quickly to COVID-19 fraud attempts.  
 
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Throughout this crisis, ACL has carefully recorded and analyzed complaint details nationally and 
prepared sanitized summary reports that are shared regularly with the SMP grantees, HHS-OIG, 
and CMS.  
 
In addition, ACL, the HHS-OIG, and the SMP National Resource Center worked together on 
national level media campaigns to get the word out on COVID-19 related fraud schemes.  The 
SMP National Resource Center developed, released, and continually updated COVID-19 
Consumer Fraud Alerts focused on coronavirus fraud schemes occurring nationally in order to 
warn Medicare beneficiaries and their families to take precautions.  These materials advise 
beneficiaries to be suspicious of strangers who offer unsolicited COVID-linked items, services, 
or testing.  They also advise beneficiaries to be wary of scare tactics used to pressure them into 
taking action, and to be cautious about sharing their personal information, including their 
Medicare identification number.  In addition, these materials warn that personal information 
could be used to fraudulently bill Medicare and Medicaid. Materials include consumer tip sheets 
on a variety of general and specific COVID-focused topics, Medicare coverage FAQs, six 
infographics, and three videos, most of which are available in both English and Spanish. As 
reported in the most recent HHS-OIG report on SMP (OIG Final Report:  2020 Performance 
Data for the Senior Medicare Patrol Projects (OEI-02-21-00180)), the SMP projects conducted 
350 group education events covering COVID-19 fraud issues in 2020, reaching a total of 11,775 
people.  In addition, they conducted 578 instances of media outreach on this topic, reaching an 
estimated 14.8 million people. 
 
COVID-19 Toolkit for ACL Grantees 
The SMP National Resource Center, in coordination with ACL, the State Health Insurance 
Assistance Program (SHIP) National Technical Assistance Center, the National Center for 
Benefits, Outreach, and Enrollment, and grantees from the SMP, SHIP, and Medicare 
Improvement for Patients and Providers Act (MIPPA) programs, worked together to prepare an 
all-encompassing toolkit of materials to support professionals across the aging network to work 
remotely during this pandemic.  Over six months of workgroup meetings were held to brainstorm 
gaps in knowledge, compile subject matter expertise, prepare cohesive materials, and publish this 
essential set of materials.  The goal of the resulting toolkit is to enhance existing solutions for 
safely serving the public under COVID-19, particularly during the busy Medicare Open 
Enrollment Period (October 15 - December 7).  It contains successful practices, templates, and 
checklists created by ACL grantees, and includes sample guidelines for using technology to 
reach beneficiaries, delivering sensitive information safely, managing volunteers or staff working 
remotely, and more.  Over 25 materials are included within this compendium of invaluable 
resources that supports the network to continue to reach our target audience despite pandemic-
related limitations and challenges.   
 
Genetic Testing Fraud Schemes  
Genetic testing fraud continued to be a widespread issue nationally in FY 2021 with company 
representatives approaching seniors and other Medicare beneficiaries to solicit genetic tests at 
senior and community centers, health/senior fairs, other community events, and senior housing 
complexes.  In mid-FY 2021, scammers started offering Medicare beneficiaries cardiac genetic 
testing (cardiogenetics) in order to obtain their Medicare information for fraudulent purposes. 
 
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The SMP grantees have received reports of company representatives going door-to-door in the 
community and within housing complexes in addition to extensive advertising on Facebook and 
other social media platforms.  ACL and the SMP grantees continued to conduct targeted public 
education and outreach efforts on this topic during this period along with the HHS-OIG.  The 
SMP projects conducted 641 group education events covering genetic testing fraud issues since 
early CY 2020; these events reached 24,443 people.  In addition, they conducted 102 instances of 
media outreach on this topic, reaching 850,374 people. 
 
Annual SMP OIG Report  
Each year, the HHS-OIG completes an annual performance report on the SMP program and 
grantees.  The most recent report covers CY 2020 (OEI-02-21-00180).  In CY 2020, the SMP 
projects had a total of 5,720 active team members who conducted 9,870 group outreach and 
education events, reaching an estimated 425,103 people.  In addition, the projects had 249,134 
individual interactions with, or on behalf of, a Medicare beneficiary.  For CY 2020, the SMP 
projects reported $16.8 million in expected Medicare recoveries.  Cost avoidance totaled 
$53,768, while savings to beneficiaries and others totaled $33,554.  Over half of these recoveries 
came from one project that uncovered a fraud scheme in which a provider paid beneficiaries to 
receive home health services that were never rendered.  The provider then submitted fraudulent 
claims to Medicare for millions of dollars while also receiving illegal kickback payments from 
the home health agencies.  The provider was sentenced and ordered to pay a total of $9.5 million 
in restitution and forfeitures.  Another project reported nearly $5 million in expected Medicare 
recoveries after uncovering multiple statewide fraud schemes that involved enrolling 
beneficiaries in medically unnecessary hospice services.  These services were often provided 
against the beneficiaries wishes, and at times, interfered with their proper medical care and 
medications.  
 
Since the SMP programs inception, the program has received more than 3.5 million inquiries 
from Medicare beneficiaries about preventing, detecting, and reporting billing errors, potential 
fraud, or other discrepancies.  SMP projects have also educated more than 42.1 million people 
through group presentations and community outreach events.  The primary focus of these 
sessions is on education, prevention, and teaching beneficiaries how to protect themselves and 
avoid fraud in the first place.  This is the true value of the SMP program.  However, the impact 
of these education and prevention activities is extremely difficult to quantify in dollars and cents.  
As HHS-OIG indicated in their 2020 and 2021 reports on the SMP program:    
 
We note that the projects may not be receiving full credit for recoveries, savings, and cost 
avoidance attributable to their work.  It is not always possible to track referrals to 
Medicare contractors or law enforcement from beneficiaries who have learned to detect 
fraud, waste, and abuse from the projects.  In addition, the projects are unable to track the 
potentially substantial savings derived from a sentinel effect whereby Medicare 
beneficiaries scrutiny of their bills reduces fraud and errors.   
 
Despite the factors that have limited ACLs ability to quantify the value of the SMP program in 
preventing, identifying, and reporting health care fraud, HHS-OIG has documented over $138.9 
million in savings attributable to the SMP program since its inception in 1997.  
 
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SMP Infrastructure and Program Support  
SMP Resource Center 
During FY 2020, ACL competed and selected the Northeast Iowa Area Agency on Aging for a 
new five-year grant to serve as the SMP National Resource Center (the Center).  In FY 2021, the 
Center received a continuation award totaling approximately $1.25 million.  The Center has 
provided technical assistance, support, and training to the SMP projects since 2003.  The goal of 
the Center is to provide professional expertise and technical support, serve as an accessible and 
responsive central source of information, maximize the effectiveness of the SMP projects in 
health care fraud outreach and education, and ensure a comprehensive national approach to 
reaching Medicare beneficiaries.  The Center has also been instrumental in supporting ACL 
efforts to forge national visibility for the SMP program.  Highlights of the SMP National 
Resource Centers planned work during the next five-year period include maintaining a new 
national SMP-focused mobile application, producing additional in-depth grantee resources and 
SMP Consumer Alerts as need arises, and acting as a clearinghouse for ACL on complex case 
data and referral information in emerging fraud trends. 
 
SMP Information and Reporting System 
Since FY 2016, ACL has supported a national SMP information and reporting system (SIRS) to 
support the evolving needs of the SMP projects.  SIRS is expected to last at least 10 years and 
provides SMPs with advanced reporting features and data analytics to help them better manage 
their programs.  In FY 2021, ACL continued to work with SMPs to prioritize and implement 
ongoing system improvements to ensure SIRS continues to meet their needs and best support 
their programs.   
 
SMP Customer Satisfaction Survey  
During FY 2020, ACL developed a request for proposals to award a new expanded SHIP/SMP 
National Beneficiary Satisfaction Survey contract.  The goal of this contract, which entered Year 
2 in FY 2021, is to ascertain the quality and effectiveness of the services provided by the SHIP 
and SMP program.  The scope of the Beneficiary Surveys is to evaluate and measure satisfaction 
with SHIP and SMP educational presentations and Medicare one-on-one counseling sessions.  
The surveys assess how beneficiaries value the services and information they receive, identify 
opportunities for continuous improvement, and comply with regulatory requirements regarding 
data collection. The evaluation includes two types of surveys:  (1) for individual counseling 
sessions with Medicare Beneficiaries, and (2) for individuals that attended an educational 
presentation.  The results will create a baseline understanding of satisfaction with counseling 
services and educational presentations and identify opportunities for recognition as well as 
overall network improvements.   
 
The first year of the surveys indicate high rates of satisfaction with both the one-on-one 
interactions and group outreach conducted by the SMP projects nationally.  The average national 
ratings were as follows (1= Strongly Disagree; 5  Strongly Agree): 
 
 
 
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Group Outreach Activities:  
  4.66  This Presentation provided me with useful information 
o
  4.67  Overall, I am satisfied with the presentation today 
o
  4.61  I would contact the presenter for help or information 
o
  4.67  I would recommend this presentation to others  
o
 
One-on-One Interactions:  
  4.25  SMP provided me with useful information 
o
  4.30  Overall, I was satisfied with my interaction with SMP 
o
  4.34  I would contact SMP again for assistance 
o
  4.33  I would recommend SMPs service to others  
o
 
The overall survey results were consistent across states and territories.  There was a strong 
correlation between the usefulness of information respondents received and the beneficiarys 
overall satisfaction with the service provided by the SMP. 
 
 
Office of the General Counsel 
 
In FY 2021, HHS allocated the Office of the General Counsel (OGC) $7.4 million in HCFAC 
funding to support OGCs program integrity activities.  Such activities focused on litigation 
aimed at the recovery of program funds and review of CMS programs to strengthen them against 
potential fraud, waste, and abuse.  OGCs HCFAC activities in FY 2021 helped the Government 
establish over $ 1.08 billion in judgments, settlements, or other types of recoveries, savings, or 
receivables. 
 
FCA and Qui Tam Actions 
OGC supports DOJs FCA work by interpreting complex Medicare, Medicaid, and CHIP rules 
and policies, which assists DOJ in discerning which allegations involve program violations and 
helps focus government resources on the matters that are most likely to result in recovery.  In 
addition, OGC provides significant litigation support by assisting DOJ in interviewing and 
preparing CMS personnel who may act as witnesses and in responding to requests for documents 
and information.   
 
In FY 2021, OGC worked collaboratively with DOJ and HHS-OIG on numerous FCA matters 
regarding a variety of issues such as:  physician self-referral, supplier billing of tests and services 
that were not rendered or that were medically unnecessary, failure to report discounted 
prescription drug prices, misrepresentations under the Medicare Electronic Health Records 
incentive programs, kickbacks and other unlawful marketing practices in connection with the 
marketing of EHR products, billing for grossly substandard skilled nursing services, and billing 
for rehabilitation therapy services that were not reasonable, necessary, or skilled.  OGC efforts 
on these and other FCA matters in FY 2021 helped the Federal Government recover 
approximately $712.53 million. 
 
 
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Civil Monetary Penalties 
CMS is responsible for administering CMP laws that are aimed at combatting fraud, waste, and 
abuse.  OGC, in turn, advises CMS on its development and imposition of CMPs.  OGC also 
defends CMS in numerous administrative appeals and judicial litigation related to the imposition 
of CMPs.  The decisions in such cases can immediately affect the quality of care provided to 
affected beneficiaries, save program funds, and set precedents that demonstrate HHS 
commitment to policing this area. 
 
OGC obtained several favorable outcomes regarding the imposition of CMPs during FY 2021, a 
period during the core of the COVID19 pandemic that has especially spotlighted health care 
facilities response to infection control issues.  OGC has advised CMS on numerous actions 
related to facilities responses to infection outbreak and has also worked with CMS on nursing 
home enforcement actions involving infection control, including cases associated with COVID
19 and other pathogens.  For example, OGC successfully defended CMSs determination of 
immediate jeopardy and its imposition of CMPs totaling $624,015 for a long-term care facility 
that failed to properly implement its infection control policy on COVID-19 surveillance and 
transmission prevention.  The surveyors who inspected the facility discovered that staff had been 
systematically ignoring the facilitys infection control protocols.  Prior to the survey, an outbreak 
of COVID-19 in the facility resulted in the infection of 44 residents and the deaths of eight.  The 
administrative law judge (ALJ) found that the evidence in the case overwhelmingly supported 
CMSs allegations of noncompliance and rejected the facilitys due process argument that no 
specific regulatory requirements supported CMSs allegations.  He found that the plain language 
of 42 C.F.R  483.80 required facilities to design and implement infection control policies, and 
that it was broad enough to mandate a policy to protect residents from COVID-19.  The ALJ also 
found that a determination of immediate jeopardy was appropriate because of the clear risk that 
COVID-19 posed to vulnerable residents and the staffs failure to properly wear masks. 
 
Provider/Supplier Suspensions and Enrollment Revocations or Denials 
Payment suspensions, enrollment revocations, deactivations and denials all play a critical role in 
protecting program funds.  These actions help protect the trust funds by ensuring that providers 
and suppliers who have committed certain conduct or acts or against whom there are credible 
allegations of fraud are not given, or do not retain, the ability to submit claims.  OGC assists with 
this work by:  advising CMS on whether to suspend payment to Medicare providers and 
suppliers; interpreting CMS enrollment regulations; reviewing proposed enrollment rules, 
manual changes, and correspondence related to enrollment issues; and providing litigation 
support and program guidance in defense of suspensions, revocations, and denials.  For example, 
in FY 2021, OGC successfully defended CMSs revocation of a physicians enrollment and its 
placement of the physician on the preclusion list.  CMS, through its administrative contractor, 
informed the physician that it was initiating a Targeted Probe and Educate review after finding 
that he was in the top one percent of providers paid for certain CPT codes.  Over the course of 
the three-round review, the physician repeatedly failed to submit acceptable documentation in 
response to letters requesting information to support his claims.  The ALJ found that the 
physician engaged in a pattern or practice of submitting claims that did not meet Medicare 
requirements when he repeatedly failed to submit the required documentation.  She also found 
 
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that CMS had a legitimate basis to revoke the physicians enrollment and billing privileges and 
to place him on its preclusion list. 
 
Part C and Part D Compliance 
During FY 2021, OGC provided extensive advice to CMS on a variety of Part C and Part D 
compliance issues, including identifying enforcement options against plan sponsors that were 
noncompliant or violated program rules.  When challenged, OGC defends CMSs imposition of 
CMPs in administrative hearings and, in conjunction with DOJ, in federal court.  OGC also 
continued its review of compliance-related correspondence that CMS issues to Part C plans and 
Part D sponsors, which include warning letters, imposition of corrective action plan letters, 
intermediate sanctions, CMP notices, and non-renewal or termination notices.  OGC also defends 
CMS non-renewal or termination actions of Part C and Part D plan contracts. 
 
Regulatory Review and Programmatic Advice 
In FY 2021, OGC advised CMS on a variety of regulatory and program issues aimed at 
combating fraud and preventing the wrongful disbursement of program funds in the first 
instance.  For example: 
 
  To support CMSs response to the public health emergency related to the COVID-19 
pandemic, OGC continues to provide counsel on a wide variety of topics in the context of 
Medicare, Medicaid, and CHIP.  OGC has advised on issues related to section 1135 
waivers, adjustments to permissible sites of care, Emergency Medical Treatment and 
Labor Act requirements, survey and certification processes, including enforcement and 
oversight policies, the applicability of the Presidents executive orders regarding vaccines 
for federal contractors, payment for certain ambulance services and ambulance-related 
waivers, provider/supplier enrollment, COVID-19 accelerated and advanced payments, 
debt recovery requirements, improper payment measurement processes, beneficiary 
incentives to receive a COVID-19 vaccine, and waivers of the Stark Law and other fraud 
and abuse requirements.  OGC has provided expeditious responses to support the 
clearance of numerous rules that address the COVID-19 public health emergency. 
 
  OGC continues to spend extensive time on various opioid-related issues, primarily related 
to potential CMS monetary recoveries stemming from other parties settlements, 
judgments, and bankruptcy actions. 
 
  OGC continues to counsel the CMS Quality, Safety, and Oversight Group (QSOG), 
formerly known as the Survey & Certification Group, which provides oversight and 
enforcement of certified institutional providers with program health and safety 
requirements intended to assure basic levels of quality and safety.  OGC advises QSOG 
regarding the development of enforcement policies, authorities regarding various 
enforcement remedies such as CMPs and program termination, rulemaking, reviewing 
interpretive guidance, and administrative litigation issues. 
 
  OGC reviewed several rules designed to improve Medicare program integrity, including 
proposed rules related to enrollment and medical review requirements. 
 
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  OGC continues to counsel the CMS Innovation Center, which tests payment and delivery 
models to reduce expenditures and preserve or enhance quality of care for Medicare, 
Medicaid, and CHIP beneficiaries.  OGC provides ongoing advice regarding the 
development of contracts, the imposition of corrective action plans, participant screening, and 
recovery of funds for such models.  In addition, OGC continues to provide counsel to CMS 
on program integrity issues in the Medicare Shared Savings Program, including advice 
regarding program integrity screenings for applicants to the program, appeals of application 
denials and the implementation of its Beneficiary Incentive Program. 
 
  OGC continues to collaborate with DOJ and the Health Resources and Services 
Administration on issues arising in connection with the Provider Relief Fund created by 
the CARES Act, enacted in March 2020. 
 
Physician Self-Referral (Stark Law) 
In FY 2021, OGC provided extensive counsel to CMS in its ongoing implementation of the 
Medicare Physician Self-Referral Disclosure Protocol, which was created to enable Medicare 
providers to self-disclose technical violations of the Stark laws physician self-referral 
prohibition.  OGC continued to assist and advise CMS on its Stark reform efforts following its 
Final Rule, which went on display on November 20, 2020, modernizing and clarifying the Stark 
regulations.  Further, OGC assisted CMS in its issuance of blanket waivers of sanctions under 
the Stark law for COVID-19 purposes, which action provides vital flexibility for physicians and 
providers in the fight against COVID-19.  In addition, as discussed above, OGC continued to 
provide guidance to CMS and DOJ in navigating the complexities of the physician self-referral 
law in FCA cases.  These consultations help build stronger cases and focus investigatory efforts, 
leading to successful results for the Government.    
 
Medicare Secondary Payer  
OGCs efforts to recover Medicares conditional payments for which other payers bear primary 
payment responsibility directly support the HCFAC statutory goal of facilitating the enforcement 
of all applicable legal remedies for program fraud and abuse.  As part of this work in FY 2021, 
OGC assisted DOJ in its efforts to protect federal Medicare and Medicaid interests in federal 
opioid lawsuits as HHS continues to find ways to abate the opioid epidemic.   
 
Denial of Claims and Payments 
CMS and its contractors engaged in various activities and initiatives to detect and prevent 
abusive and fraudulent billing practices.  These measures included provider, supplier, and 
beneficiary education, use of claim sampling techniques, and rigorous scrutiny of claims with 
increased medical review.  In FY 2021, OGC continued to play a major role in advising CMS 
regarding the development and implementation of these types of program integrity measures and 
in defending CMS in litigation brought by providers and suppliers challenging these efforts.  For 
example, in Hammad v. Azar, the U.S. District Court for the Northern District of Florida 
affirmed a Medicare Appeals Council decision upholding the sampling methodology used in a 
post payment audit of a physicians Medicare claims.  The ruling noted the physician had failed 
to show that another sampling methodology would have materially affected the calculation of the 
amount of overpayment. 
 
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Bankruptcy Litigation 
OGC protects Medicare funds from waste in bankruptcy cases by asserting CMS recoupment 
rights to collect overpayments, arguing to continue suspension or termination actions against 
debtors, seeking adequate assurances from the bankruptcy court that CMS interests in the 
debtors estate will be protected, arguing for the assumption of Medicare provider agreements as 
executory contracts, and petitioning for administrative costs where appropriate.  OGC also 
handles change of ownership issues related to bankrupt Medicare providers to ensure successor 
financial liability and to protect patient health and safety.  For example, in FY 2021, OGC 
handled several matters involving novel issues arising under the COVID-19 Advanced and 
Accelerated Payments (CAAP) program and bankruptcy.  In one matter, when an Illinois 
hospital filed for bankruptcy under Chapter 11, it owed over $28.0 million in CAAP payments to 
CMS.  However, CAAP statutory provisions prohibited recoupment of any part of the CAAP 
debt during the four-month period between the February 2021 petition date and the one-year 
anniversary of the CAAP payment in June 2021.  OGC advised CMS regarding its ability to 
withhold Medicare payments for pre-petition services before the CAAP payment was due.  
Although CMS was prohibited by statute from demanding the payment of the balance due on the 
CAAP debt until November 2022, the parties voluntarily agreed to have the hospital repay the 
CAAP debt in full. 
 
State Medicaid Disallowances 
Over the past several years, upon identifying an increasing number of questionable state 
financing schemes designed to maximize federal payments under Medicaid, CMS has taken an 
increased number of Medicaid disallowances.  Correspondingly, OGC continues to see a 
significant increase in its workload regarding proposed disallowances, requested 
reconsiderations, and defense against Medicaid disallowance appeals before the Departmental 
Appeals Board.  As a result of OGCs advocacy, CMS has prevailed in matters in FY 2021 that 
have upheld millions of dollars in disallowances. 
 
In summary, OGCs efforts in FY 2021 directly supported the HCFAC programs goals.  As part 
of its program integrity work, OGC coordinated with CMS, DOJ, and HHS-OIG to enforce 
various statutes and regulations applicable to health care fraud and abuse, to the benefit of the 
Medicare, Medicaid, and CHIP programs. 
 
 
Food and Drug Administration Pharmaceutical Fraud Program 
 
In FY 2021, over $6.1 million in HCFAC funding was made available for the FDA 
Pharmaceutical Fraud Program (PFP).  The PFP was instituted to enhance the health care 
fraud-related activities of FDA's Office of Criminal Investigations (OCI) and the Office of the 
General Counsel Food and Drug Division (OGC-FDD).  OCI, with the support of OGC-FDD, 
investigates criminal violations of the Federal Food, Drug, and Cosmetic Act (FDCA), the 
Federal Anti-Tampering Act, and related federal statutes. 
 
 
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The PFP is designed to detect, prosecute, and prevent pharmaceutical, biologic, and medical 
device fraud.  The PFP gathers information from sources inside and outside FDA and focuses 
on fraudulent marketing schemes, application fraud, clinical trial fraud, and flagrant 
manufacturing- related violations concerning biologics, drugs, and medical devices.  The goal 
of the program is the early detection and prosecution of such fraudulent conduct.  This furthers 
FDAs public health mission by protecting the public from potentially dangerous medical 
products, helping to reduce health care costs, in most cases before they are incurred, and 
deterring future violators.  By initiating investigations of medical product fraud schemes 
earlier in their lifecycle, FDA is able to preclude potential public harm by barring medical 
products, which have not followed the legal FDA approval processes and do not meet FDA 
standards, from making it to market, saving valuable health care dollars from being spent.  
 
The PFP has identified multiple alleged medical product fraud schemes through various avenues.  
Since the inception of the PFP, OCI has opened a total of 314 criminal HCFAC investigations.  
In FY 2021, OCI, through its PFP, opened 15 criminal investigations, including investigations 
involving drug compounders, clinical trials, and foreign and domestic medical-product 
manufacturers.  FDA is committed to tackling emerging public health concerns.  In FY 2021, the 
PFP has opened two COVID-19 related criminal investigations.   
 
The investigations opened in FY 2021 consist of allegations involving: 
 
  Application fraud, involving individuals or companies who may have submitted false 
or fraudulent information to FDA to obtain an approval or clearance; or who did not 
submit the required information to legally market or test drugs, devices, or biologics.     
 
  Questionable manufacturing practices, involving the distribution of foreign-
manufactured active pharmaceutical ingredients (APIs), drug compounding 
pharmacies, and biologic tissue products.   
 
  Clinical trial fraud, involving possible falsification of study documents and/or 
fraudulent study subject enrollments.  The investigations consist in part of individuals 
suspected of falsifying and/or manipulating clinical trial data or conducting clinical 
trials without FDA oversight.     
 
  Fraudulent marketing schemes, involving the promotion of products through false or 
misleading claims, including for medical indications and stem cell biologic products. 
 
As noted in previous reports, the types of criminal investigations conducted through the PFP are 
typically complex investigations, such as application fraud and marketing fraud, requiring 
extensive document review.  It is not unusual for these complex fraud investigations to last for  
five years or more from initiation to conclusion.  Yet investigations under the PFP have produced 
numerous prosecutions. 
In October 2020, in the Eastern District of Kentucky, a compounding pharmacy and its owner 
entered into a plea agreement for unlawful wholesale distribution of prescription drugs.  The 
 
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company unlawfully distributed unapproved new drugs as well as distributed prescription drugs 
without proper licensing.  Sentencing included 36 months of probation, $20,100 in fines and 
$5,366,720 in asset forfeiture. 
 
In January 2021, in the District of Utah, a pharmacist pled guilty to receiving misbranded 
chloroquine from China with the intent to sell the drug in the United States.  The defendant 
imported over 50 kilograms of misbranded and mislabeled chloroquine labeled as Boswellia 
Serrata Extract.  Chloroquine was initially thought to provide some medical benefits for the 
treatment patients with COVID-19.  In June 2020, the FDA revoked the Emergency Use 
Authorization of oral hydroxychloroquine sulfate and chloroquine phosphate for the treatment of 
COVID-19.  The defendant was sentenced to three years of probation, a $10,000 fine and to pay 
for the destruction of the drugs.  
 
In February 2021, in the District of Nevada, a drug manufacturer pled guilty to concealing and 
destroying records prior to an FDA plant inspection in India.  The firm was sentenced to a 
criminal fine of $30,000,000 and forfeited an additional $20,000,000.  The company also agreed 
to implement a compliance and ethics program to prevent, detect and correct violations of U.S. 
Law related to drug manufacturing.  
 
In March 2021, in the Southern District of Florida, four individuals were charged for their roles 
in a scheme to falsify clinical trial data regarding an asthma medication.  The clinical trial was 
designed to investigate the safety and efficacy of an asthma medication in children aged 4 to 11. 
Three of the defendants have been sentenced to 107 months confinement, 96 months of 
probation, $300.00 in fines, $455,214 in restitution, and $257,000 in forfeiture.  The fourth 
defendant is awaiting trial.  
 
In July 2021, in the District of Massachusetts, two defendants were re-sentenced after the First 
Circuit Court of Appeals affirmed the criminal convictions.  The initial sentences were vacated. 
The defendants were sentenced in connection with a nationwide fungal meningitis outbreak that 
killed more than 100 patients and infected another 793 people.  The former co-owner of the 
pharmacy was re-sentenced to 174 months in prison, ordered to forfeit $1.4 million and pay 
$82.0 million in restitution.  The former supervisory pharmacist was re-sentenced to 126 months 
in prison, three years supervised release, ordered to pay forfeiture of approximately $473,584 
and restitution of $82.0 million.  
 
In August 2021, in the Southern District of Florida, two defendants were sentenced in connection 
with their participation in falsifying data related to clinical drug trials.  The defendants pled 
guilty to falsifying data in connection with two clinical trials where they fabricated medical 
records to make it appear subjects were participating in the clinical trials when they were not. 
They were sentenced to a combined 76 months in prison and ordered to pay $2,134,503 in 
restitution.  
 
The FDA believes that various investigations already initiated under the PFP may lead to future 
judicial action that may include criminal prosecution and monetary recoveries.  These 
investigations include drug manufacturers and clinical investigators under investigation for data 
 
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integrity and other violations, which possibly pose a risk to the publics health and safety. 
 
Finally, the FDA continues to train its employees and conduct outreach activities to maximize 
the agencys ability to prevent and detect fraud involving medical products.  Due to the COVID-
19 pandemic, FDA moved to a virtual training model to adapt to the needs of its workforce.  
  
   
 
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DEPARTMENT OF JUSTICE 
 
United States Attorneys 
 
The United States Attorneys were allocated $63.5 million in FY 2021 HCFAC funding for civil 
and criminal health care fraud enforcement efforts.  These funds supported attorneys, paralegals, 
auditors, and investigators, as well as litigation expenses for health care fraud investigations and 
cases.  The USAOs play a major role in health care fraud enforcement by bringing criminal and 
affirmative civil cases to recover funds wrongfully taken from the Medicare Trust Funds and 
other taxpayer-funded health care systems through fraud and false claims.   
 
Criminal Prosecutions34 
 
In FY 2021, the USAOs opened 831 new criminal health care fraud investigations and filed 
criminal charges in 462 cases involving 741 defendants.  During that same time period, 312 
defendants were convicted of health care fraud-related crimes. 
 
Civil Matters and Cases35 
 
In FY 2021, the USAOs opened 805 new civil health care fraud investigations and had 1,432 
civil health care fraud matters pending at the end of the fiscal year. 
 
The USAOs litigate the full spectrum of health care fraud matters, both independently and in 
partnership with the Civil and Criminal Divisions.  USAOs receive many health care fraud 
referrals directly from investigative agencies and increasingly are developing cases in-house 
through data analytics.  They also receive referrals through the filing of qui tam (or whistle-
blower) complaints.  USAOs coordinate closely both internally, with AUSAs developing parallel 
cases with their civil or criminal colleagues, and with other USAOs, collaborating on 
investigations that sprawl across district borders and new schemes marketed to and taken up by 
providers nationwide.  
 
Qui tam cases and other civil cases either are handled jointly with trial attorneys in the Civil 
Fraud Section or litigated independently by USAOs.  USAOs handle most criminal cases 
independently, but also partner with the Departments Criminal Division on Medicare Fraud 
Strike Force Teams which currently operate in twelve areas across the country.  Each Strike 
Force team consists of dedicated AUSAs and support personnel from the USAO, as well as from 
the Criminal Division.   
 
 
34 FY 2021 numbers are actual data through the end of September 2021.  This data includes records classified with 
the primary 03GHealth Care Fraud program code.   
35 FY 2021 numbers are actual data through the end of September 2021.  This data includes those records classified 
with the primary FRHCHealth Care Fraud civil code. 
 
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Since 2018, the USAOs for 10 federal districts in six states36 have joined the Health Care Fraud 
Unit in the Criminal Divisions Fraud Section (HCF Unit), as well as law enforcement partners at 
the FBI, HHS-OIG, and DEA, to form the ARPO Strike Force, a joint law enforcement effort to 
identify and investigate health care fraud schemes in the Appalachian region and surrounding 
areas, and to effectively and efficiently prosecute medical professionals and others involved in 
the illegal prescription and distribution of opioids. 
 
In addition, the USAO allocation supports AUSAs in eleven districts under the Opioid Fraud and 
Abuse Detection Unit (OFAD) program.  OFAD focuses specifically on opioid-related health 
care fraud using data to identify and prosecute individuals that are contributing to the 
prescription opioid epidemic.   
 
USAOs partner with the Civil and Criminal Divisions on major initiatives.  In FY 2020, as part 
of the National Nursing Home Initiative, USAOs opened numerous civil and criminal investi-
gations of nursing homes for gross failure of care.  These investigations are continuing.  USAOs 
also take an active part in the nationwide Healthcare Fraud Takedowns and Enforcement 
Actions. 
 
Since March 2020, USAOs have been actively pursuing pandemic-related fraud, including using 
civil injunctions and seizures to shut down fraudsters and their websites hawking phony cures, 
vaccines, and PPE; criminally prosecuting COVID-19-related scams; investigating failure of care 
at nursing facilities impacted by COVID-19; and investigating civil and criminal matters alleging 
fraud on Medicare, Medicaid, HRSA and other federal payors related to the pandemic or 
stimulus health care funding. 
 
Examples of successful health care fraud cases are discussed above, but notably USAOs are 
handling complex, resource-intensive cases involving a number of emerging trends including: 
 
  Multi-district telehealth lab and DME schemes; 
  EHR kickback and other schemes; 
  Medicare Part C fraud involving the manipulation of diagnosis codes of millions of 
beneficiaries; 
  Sophisticated kickback and other fraud schemes involving complex ownership structures 
of healthcare entities, including by private equity and real estate investment vehicles; 
  Nationwide investigations of alleged Controlled Substances Act violations by pharmacy 
chains; and 
  Pharmaceutical pricing cases brought under the FCA and AKS based on allegations of 
price-fixing and market allocation in the generic pharmaceutical industry.   
 
 
36 The USAOs are the Northern District of Alabama, Eastern District of Kentucky, the Western District of 
Kentucky, the Southern District of Ohio, the Eastern District of Tennessee, the Middle District of Tennessee, the 
Western District of Tennessee, the Northern District of West Virginia, the Southern District of West Virginia, and 
the Western District of Virginia. 
 
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In addition to funding attorneys, auditors, paralegals and investigators, the Executive Office of 
the U.S. Attorneys (EOUSA) provides critical litigation support for these complex health care 
fraud investigations and litigation.  EOUSA supports contract forensic investigators and auditors, 
as well as nurse consultants, who have been indispensable to the USAOs success in complex 
cases.  EOUSA partners with the Civil Division to provide support for other initiatives, including 
sophisticated data analytics (which have been instrumental in many large opioid prescribing 
investigations), and nursing home consultants to assist on the Nursing Home Initiative.  EOUSA 
provides other tools to the field, including the Special Investigation Resource and Intelligence 
System (SIRIS) Resource Center, which gives USAO personnel access to the NHCAAs SIRIS 
database.   
 
In addition to managing national-level support, EOUSA provides districts with case-specific 
funding for litigation support for extraordinary needs.  In FY 2021, HCFAC money funded more 
than 43 such requests from USAOs.  This support pays for consultants in such highly technical 
areas as software experts in EHR cases, economic experts in pharmaceutical pricing cases, and 
medical consultants in highly paid specialties, and is indispensable to investigating and 
developing these complex cases. 
  
To ensure a focused and coordinated approach to health care fraud enforcement, each USAO has 
designated criminal and civil health care fraud coordinators.  These coordinators host working 
group and/or task force meetings within their districts, attended by federal investigative agencies, 
state MFCUs, private sector representatives and others.  Coordinators also conduct training and 
outreach to a variety of audiences, including medical and hospital associations, the defense and 
relators bar, and Medicare beneficiaries. 
 
EOUSA also organizes extensive training for AUSAs, as well as paralegals, investigators, and 
auditors on a wide variety of health care fraud enforcement matters.  Although in-person training 
was not possible in FY 2021, EOUSA presented numerous webinars throughout the year focused 
on emerging health care fraud issues.   
 
 
Civil Division 
 
The Civil Division received approximately $45.5 million in FY 2021 HCFAC funding to support 
the health care fraud activities of the Commercial Litigation Branchs Fraud Section and the 
Consumer Protection Branch.  This amount also included funding to support the Department of 
Justices Elder Justice Initiative.  In FY 2021, the Fraud Section and the USAOs won or 
negotiated more than $5.0 billion in health care fraud settlements and judgments.37   
   
 
37 As stated earlier, the amount reported as won or negotiated only reflects the federal settlements and judgments and 
therefore does not reflect state Medicaid monies won or negotiated as part of any global federal-state settlements. 
 
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The Commercial Litigation Branchs Fraud Section 
 
The Civil Divisions Commercial Litigation Branch (Fraud Section) investigates complex health 
care fraud allegations and files suit under the civil FCA to recover money on behalf of defrauded 
federal health care programs including Medicare, Medicaid, TRICARE, the VA, and the FEHBP.  
The Fraud Section works closely with the USAOs and often teams with other law enforcement 
partners to pursue allegations of health care fraud.   
 
The Fraud Section investigates and resolves matters involving a wide array of health care 
providers and suppliers.  The Fraud Section continues to pursue fraud schemes arising from the 
opioid epidemic, and significant resolutions during the past year included civil settlements with 
Indivior Solutions (Indivior), Purdue Pharma (Purdue), and the Sackler family.  The Indivior 
civil matter resolved allegations associated with the marketing of the opioid-addiction-treatment 
drug Suboxone, including allegations that Indivior companies knowingly promoted the sale and 
use of Suboxone to physicians who were writing prescriptions that were not for a medically 
accepted indication and that lacked a legitimate medical purpose, were issued without any 
counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically 
unnecessary, and were often diverted.  The Purdue civil matter resolved allegations that the 
opioid manufacturer promoted its drugs to health care providers it knew were prescribing opioids 
for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and 
diversion, and further resolved allegations that Purdue engaged in three different kickbacks 
schemes to induce prescriptions of its opioids by paying kickbacks to doctors, an electronic 
health records company, and certain specialty pharmacies.  As noted, Purdue incorporated the 
criminal and civil settlements into its plan of reorganization, but the district court subsequently 
reversed a bankruptcy court order confirming the plan and litigation over the plan continues.    
The Sackler matter resolved allegations that certain individual members of the Sackler family 
who were shareholders and board members of Purdue knew that the legitimate market for 
Purdues opioids had contracted, but nevertheless requested that Purdue executives recapture lost 
sales and increase Purdues share of the opioid market, including by approving a new marketing 
program through which Purdue sales representatives intensified their marketing of OxyContin to 
extreme, high-volume prescribers, causing health care providers to prescribe opioids for uses that 
were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.   
 
The Fraud Section has also pursued schemes that violate the AKS, which prohibits the willful 
solicitation or payment of remuneration to induce the purchase of a good or service for which 
payment may be made under a federal health care program.  For example, the Fraud Section 
resolved allegations that EHR technology vendor Athena paid unlawful kickbacks to generate 
sales of its EHR product.  The Fraud Section also resolved allegations that generic 
pharmaceutical manufacturers Taro, Sandoz, and Apotex paid and received compensation 
prohibited by the AKS through arrangements on price, supply, and allocation of customers with 
other pharmaceutical manufacturers for certain generic drugs manufactured by the companies, 
resulting in higher drug prices for federal health care programs and beneficiaries.  Other matters 
relating to AKS violations involved psychiatric hospitals and a substance use treatment facility 
(Oglethorpe), home health care agencies (BAYADA), hospitals (AGHS), pharmaceutical 
 
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companies (Biogen), diabetic supplies (Arriva), diagnostic testing (Alliance), and medical 
devices (MMSI). 
 
As in years past, the Fraud Section also resolved a number of matters in which providers billed 
federal health care programs for medically unnecessary services or services not rendered as 
billed.  Such matters involved allegations that providers, including a cardiologist, a psychiatric 
service provider, skilled nursing facilities, and hospitals billed for services that the patients did 
not need (such as the UM, Oglethorpe, SMMC, Sava, and SMRS matters discussed earlier).  In 
addition, the Fraud Section continues to focus on inadequate care and on other fraud in nursing 
facilities, which provide care to a particularly vulnerable population (such as the Sava and SMRS 
matters discussed earlier).   
 
In addition, the Fraud Section is continuing to investigate potential FCA violations in connection 
with fraudulent schemes targeting government programs arising from the COVID-19 pandemic.  
This past year, the Fraud Section opened investigations into a wide array of COVID-19 related 
schemes, including allegations of health care providers billing for unproven or medically 
unnecessary tests or providing or causing the provision of COVID-19 vaccines to ineligible 
persons, ineligible providers exploiting HHS pandemic-related waivers, and fraud on COVID-19 
relief programs.  The Fraud Sections investigations of pandemic-related allegations include 
whistleblower actions filed under the qui tam provisions of the FCA.  In investigating potential 
FCA violations arising from the COVID-19 pandemic, the Fraud Section is closely coordinating 
with HHS-OIG and CMS, as well as non-federal entities, including state Attorneys General and 
state MFCUs. 
 
Because the Fraud Section receives every FCA complaint filed by whistleblowers across the 
country, it has a unique vantage point over health care fraud trends and developments nationwide 
and therefore regularly handles some of the most complex matters and coordinates national 
investigations with its law enforcement partners.  Likewise, given the diversity of health care 
fraud cases pursued by the Fraud Section, it frequently provides training and guidance on the 
FCA and health care fraud issues to AUSAs and agents.  The Section works closely with HHS-
OIG, including its Office of Counsel, in all settlements of health care fraud allegations to ensure 
that the administrative remedies possessed by HHS are appropriately considered and to enable 
the negotiation of compliance terms that diminish the risk that the offending conduct will be 
repeated.  The Section also collaborates with and counsels HHS-OIG and CMS on interagency 
initiatives and proposed rules and regulations.   
 
Finally, the Elder Justice Initiative, which is overseen by the Civil Division, coordinates and 
supports law enforcement efforts to combat elder abuse, neglect, and financial exploitation.  The 
Initiative helps law enforcement efforts by maintaining an information bank of Elder Justice 
related materials (including briefs, opinions, indictments, plea agreements, and subpoena 
templates); funding medical reviewers, auditors, and other consultants to assist DOJ attorneys 
and AUSAs in their nursing home and/or long term care facility cases; hosting quarterly 
teleconferences with DOJ attorneys and AUSAs across the country to discuss issues or 
developments in connection with nursing home and failure of care cases; and coordinating 
 
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nationwide investigations of skilled nursing facilities.  In addition to supporting law enforcement 
efforts, the Initiative continues to fund research projects awarded by the Office of Justice 
Programs, National Institute of Justice, to study the abuse, neglect, and exploitation of elderly 
individuals and residents of residential care facilities.   
 
Elder Justice Initiative members represent the Department on Interagency Working Groups such 
as the Elder Justice Coordinating Council.  The Civil Division also maintains the Elder Justice 
Website (www.elderjustice.gov), a valuable resource for elder abuse victims and their families, 
state and local prosecutors, elder abuse researchers, and practitioners.   
 
The Consumer Protection Branch 
 
The Consumer Protection Branch (CPB or the Branch) enforces consumer protection laws to 
deter and punish dangerous practices that both risk and result in harm to Americans.  The Branch 
aggressively pursues both civil and criminal cases against those who unlawfully manufacture, 
distribute, or sell pharmaceuticals, medical devices, and dietary supplements, causing harm and 
loss to consumers and the government.  As the Department component charged with enforcing 
the Federal Food, Drug, and Cosmetic Act (FDCA), the Branch works closely with the FDA, the 
DEA, and other law enforcement agencies to investigate matters.  It also coordinates closely with 
USAOs and the Commercial Litigation Branchs Fraud Section to prosecute matters, including 
major health care fraud cases.  In recent years, and especially over the last year, the Branch has 
dedicated particular focus to advancing civil and criminal actions against individuals and entities 
up and down the prescription opioid supply chain, seeking to hold accountable those responsible 
for the opioid crisis and to recoup billions of dollars for the United States and victims, and 
resulting in more than $5.8 billion in fines, forfeitures, and penalties for the federal fisc. 
 
With respect to opioid-related work, the Branch is leading a number of multi-component 
investigations and active cases against pharmaceutical opioid manufacturers, wholesale 
distributers, pharmacies, and health care providers.  The Branch is advancing this work through 
state-of-the-art data analysis and evidence-review tools, a large contract staff, and an enormous 
commitment of prosecutorial resources.  Indeed, Branch prosecutors dedicated more than 24,000 
hours to the matters in FY 2021.  The Branch is projected to exceed that amount in FY 2022.  
Each of the matters has the potential to return hundreds of millions, or even billions, of dollars to 
the federal government.  The Branch also is continuing coordination responsibilities established 
through the Departments Prescription Interdiction and Litigation Task Force. 
 
Over the last year, the Branch, partnering with the U.S. Attorneys Offices for the Districts of 
New Jersey and Vermont, obtained a guilty plea from Purdue Pharma LP.  Purdue pled guilty to 
conspiracies to defraud the United States and violate the anti-kickback statute.  The company 
represented to the DEA that it maintained an effective anti-diversion program when, in fact, 
Purdue continued to market its opioid products to more than 100 health care providers whom the 
company had reason to believe were diverting opioids.  Purdue also reported misleading 
information to the DEA to boost Purdues manufacturing quotas.  The misleading information 
comprised prescription data that included OxyContin prescriptions written by doctors that 
Purdue had reason to believe were engaged in diversion.  The conspiracy also involved aiding 
 
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and abetting violations of the Federal Food, Drug, and Cosmetic Act by facilitating the 
dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, 
and thus without lawful prescriptions.  Under the terms of the plea agreement, Purdue agreed to 
the imposition of the largest penalties ever levied against a pharmaceutical manufacturer, 
including a criminal fine of over $3.5 billion and an additional $2.0 billion in criminal forfeiture 
(which is subject to a credit of up to approximately $1.8 billion against recoveries by state and 
local government creditors in the Purdue bankruptcy). 
 
The result involving Purdue builds on the Branchs recent success involving Indivior Inc., a 
pharmaceutical manufacturer that committed fraud with respect to the safety of its opioid 
addition treatment drug, Suboxone.  As part of the criminal resolution reached with the company 
by the Branch and the U.S. Attorneys Office for the Western District of Virginia, the companys 
main subsidiary, Indivior Solutions, pled guilty to a felony charge of false statements involving a 
health care program, and the company agreed to pay $289.0 million in criminal penalties.  
Combined with a $300.0 million civil settlement with the company, a $1.4 billion global 
resolution with its former corporate parent, and guilty pleas entered by two of its former 
executives, the criminal resolution with Indivior capped off a more than $2.0 billion enforcement 
effort.   
 
With respect to chain pharmacies, the Branch led a multi-component effort that, in December 
2020, filed suit against Walmart, Inc., asserting nationwide violations of the Controlled 
Substances Act in the dispensing of opioids from, and distribution of opioids to, Walmarts more 
than 5,500 pharmacies.  The complaint details Walmarts substantial contribution to the opioid 
epidemic and seeks billions of dollars for the government and significant injunctive relief.  The 
case is now in litigation, taking up thousands of federal attorney and contractor time each month 
and requiring a significant litigation-support apparatus.  And the Branch also is litigating to 
enforce a subpoena against CVS.  The Branch expects in the coming year to reach resolutions, or 
advance investigations and litigation, as to other companies in the opioid supply chain, including 
other chain pharmacies and certain large distributors. 
 
Branch attorneys also continued over the past year to partner regularly with U.S. Attorneys 
Offices on local-impact civil and criminal cases involving community pharmacies and 
practitioners.  The Branch and its partners successfully enjoined and secured money judgments 
from individuals and entities involved in the illegal dispensing of opioids in Florida, Ohio, North 
Carolina, and Utah.  Through this work, the Branch immediately curtailed opioid diversionand 
related unlawful billing to federal healthcare programsby identifying and shutting down actors 
fueling the opioid abuse epidemic in their communities.  The Branch is advancing a number of 
other similar actions around the country and expects to bring more actions next year.    
 
In addition to its opioid enforcement efforts, the Branch continued to lead the Department in 
prosecuting pharmaceutical, dietary supplement, and medical device manufacturers and their 
executives for violations of the FDCA in the manufacturing and marketing of their 
products.  These efforts include the Branchs response to consumer fraud related to the COVID-
19 pandemic.  In FY 2021, CPB invested almost 18,000 hours into FDCA work, and 
another4,500 hours into COVID fraud work, for a total of nearly 23,000 hours.  The Branch is 
 
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projected to exceed that amount in FY 2022.   
 
The Branchs work under the FDCA touches a wide variety of fraudulent conduct.  For example, 
in July 2021, Avanos Medical Inc., a U.S.-based multinational medical device corporation, 
agreed to pay more than $22.0 million to resolve a criminal charge relating to the companys 
fraudulent misbranding of its MicroCool surgical gowns.  Acting in conjunction with the 
Criminal Divisions Fraud Section and the U.S. Attorneys Office for the Northern District of 
Texas, the Branch established that Avanos fraudulently claimed that its medical gowns met 
safety standards that they did not, in fact, meet.  Avanoss activities exposed health care 
professionals and patients to serious risk.  After being confronted with results of the Branchs 
investigation, Avanos agreed to set up a victim compensation fund of almost $9.0 million, pay a 
criminal monetary penalty of $12.6 million, disgorge $689,000 in profits, and implement 
important compliance terms.  
 
Similarly, Branch attorneys secured a criminal guilty plea and $50.0 million fine and forfeiture 
judgment against Fresenius Kabi Oncology Limited for concealing and destroying records in 
advance of an FDA inspection.  The Branchs investigation revealed that the destroyed records 
showed that the company was manufacturing drug ingredients for cancer-treatment drugs in 
contravention of FDA requirements meant to protect patients from harm. 
 
This year, the Branch advanced a major initiative to address fraud affecting clinical trials for 
prescription drugs and medical devices.  Working with the U.S. Attorneys Office for the 
Southern District of Florida, Branch attorneys obtained criminal convictions against three 
individuals and brought charges against another alleged to have engaged in a scheme of 
falsifying clinical trial data regarding a pediatric asthma medication.  The prosecution caused the 
data in question to be corrected before harm could result to children.  In another clinical trial 
fraud matter, two individuals pled guilty earlier this year, and four others face trial on charges 
that they knowingly enrolled subjects in trials when those subjects failed to meet eligibility 
criteria, falsified laboratory results, falsified medical records, and falsely represented that 
subjects were taking the drugs being studied when in fact they were not.  The Branch is 
advancing other investigations in the clinical trial fraud arena, as well.  The results obtained in 
these actions have sent a powerful message against fraud in clinical trials and drug-approval 
submissions to FDA.  
 
Branch attorneys also obtained injunctive relief to: stop a California companys fraudulent 
marketing of the supplement Poly-MVA, which falsely claimed to a be a cure, mitigation, or 
prevention for diseases including cancer; stop a Nevada company from falsely marketing 
adulterated tap water that had caused five cases of non-viral hepatitis in children; stop a New 
York company from manufacturing dietary supplements that did not meet product specifications 
and did not properly identify their contents; and stop a Washington company from distributing 
adulterated fruit juice products that were being widely disseminated in school lunch programs. 
 
Further, the Branch continued its efforts against fraud related to the COVID-19 pandemic.  In 
one example, Branch attorneys conducted an international investigation into the operators of a 
Vietnamese website that purported to sell popular COVID-related items like facemasks and other 
 
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personal protective equipment.  Despite assurances of authenticity, consumers who paid for such 
equipment never received any goods, and the operators simply kept the money they received 
through online payment systems.  The Department obtained injunctions against the operators, 
now imprisoned in Vietnam, and shut the websites down.  In addition, the Branch is continuing 
to litigate cases that started last year, including civil and criminal enforcement matters against 
fraudulent purveyors of bleach, colloidal silver, and other dangerous or ineffective products all 
touted as a COVID-19 cures.  The Branch also continues to advise U.S. Attorneys Offices 
across the country on COVID-related cases, guiding prosecutors in the use of enforcement tools 
under the Federal Food, Drug, and Cosmetic Act. 
 
As vaccines rolled out this year, Branch attorneys helped to ensure that the supply was safe and 
protected.  Most notably, the Branch partnered with the U.S. Attorneys Office in the Eastern 
District of Wisconsin to prosecute a hospital worker who intentionally spoiled doses of the  
Moderna vaccine, putting dozens of patients at risk.  That defendant recently was sentenced to 
three years in prison.   
 
The Department also brought the first enforcement effort under the newly enacted COVID-19 
Consumer Protection Act.  The civil complaint, filed in April 2021, seeks preliminary and 
permanent injunctions, civil penalties, and other equitable relief against a St. Louis-based 
chiropractor who advertised, without competent scientific evidence, vitamin D and zinc 
nutritional supplements as more effective than vaccines at preventing COVID-19.  The Branch is 
coordinating with FTC to bring additional actions under the Act to combat ongoing COVID-19 
fraud affecting consumers and health care programs.  
  
 
Criminal Division 
 
The Criminal Division was allocated $34.4 million in FY 2021 HCFAC funding to support 
criminal health care fraud litigation and interagency coordination, which is carried out primarily 
by the Fraud Sections Health Care Fraud Unit and, to a lesser extent, the Organized Crime and 
Gang Section. 
 
The Fraud Section 
 
The Fraud Sections HCF Unit employs criminal prosecutors who focus exclusively on 
investigating and prosecuting health care fraud matters and prescription opioid distribution and 
diversion schemes.  In sum, the HCF Units core mission is to:  (1) protect the public fisc from 
fraud, waste, and abuse; and (2) detect, limit, and deter fraud and illegal prescription, 
distribution, and diversion offenses resulting in patient harm.  The HCF Unit also supports the 
USAO community by providing legal, investigative and data analytics support, guidance and 
training on criminal health care fraud and opioid-related matters.   
 
Beginning in March 2007, the Fraud Section, working with the local USAO, the FBI, HHS-OIG, 
and state and local law enforcement agencies, launched the Health Care Fraud Strike Force in 
 
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Miami-Dade County, Florida, to investigate and prosecute individuals and entities that do not 
provide legitimate health care services but instead defraud Medicare and other government 
health care programs.  In FY 2021, the HCF Units Strike Force program provided attorney 
staffing, litigation support, and leadership and management to the Strike Forces operating in 24 
federal judicial districts across the United States.  The current strike forces include operations in 
cities including, but not limited to, Miami and Tampa/Orlando, Florida; Nashville, Tennessee; 
Ft. Mitchell, Kentucky; Los Angeles, California; Detroit, Michigan; Houston, San Antonio and 
Dallas, Texas; Brooklyn, New York; Baton Rouge and New Orleans, Louisiana; Chicago, 
Illinois; Newark, New Jersey/Philadelphia, Pennsylvania, along with the NRRSF located in 
Washington, D.C.  
 
In 2018, the HCF Unit created the ARPO Strike force, a joint effort between DOJ, HHS-OIG, 
FBI, DEA, and local law enforcement partners to combat health care fraud and the opioid 
epidemic in nine federal districts.  As of September 30, 2021, ARPO has charged 95 defendants 
involving more than 105 million prescribed opioid doses.  These efforts have resulted in 55 
guilty pleas and four trial convictions.   
 
In FY 2021, the HCF Unit achieved the following results: 
 
  Filed 131 indictments, criminal informations and complaints involving charges against 
185 defendants who allegedly collectively billed federal health care programs and private 
insurers approximately $1.7 billion;  
  Obtained 160 guilty pleas and litigated 13 jury trials, with guilty verdicts against 10 
defendants; and 
  Securing imprisonment for 79 defendants sentenced, with an average sentence of over 61 
months. 
 
Since its inception, Strike Force prosecutors filed more than 2,400 cases charging more than 
5,000 defendants who collectively billed federal health care programs and private insurers 
approximately $24.7 billion, more than 3,300 defendants pled guilty and over 400 others were 
convicted in jury trials, and more than 3,000 defendants were sentenced to imprisonment for an 
average term of approximately 49 months.   Medicare payment trends demonstrate the positive 
impact of Strike Force enforcement and prevention efforts.  Each year, the HCF Unit coordinates 
large-scale, law enforcement actions with its partners.   
 
The nature and scope of health care fraud has evolved rapidly over the past few years with the 
advent of new technologies that have broadened the reach of health care and, consequently, 
health care fraud.  As a result, the Fraud Section recently developed and launched the NRRSF:  a 
way to respond quickly to multi-jurisdictional health care fraud cases and priorities, without 
diverting attorneys from district-specific Strike Forces.  NRRSF prosecutors, who are based in 
Washington, D.C. (and, where appropriate, based in certain existing Strike Force locations), are 
dedicated exclusively to the immediate and decisive response to new and emerging health care 
fraud trends.  Like the other Strike Forces, the NRRSF coordinates with USAOs and federal and 
state law enforcement partners prosecute these significant multi-jurisdictional and corporate 
 
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fraud cases.  Examples of the types of matters under this Strike Forces purview include a large-
scale rural hospitals billing fraud matter indicted in the Middle District of Florida, charges 
against former NFL players for their alleged roles in a nationwide fraud scheme that targeted a 
plan that provided tax-free reimbursement of out-of-pocket medical care expenses that were not 
covered by insurance, the recent sprawling telemedicine cases involving billions of dollars in 
alleged fraud loss, and prosecutions of those seeking to criminally exploit the COVID-19 
pandemic through health care fraud and related financial fraud schemes.   
 
The HCF Unit chairs an interagency COVID-19 fraud working group with federal law 
enforcement and public health agencies to identify and combat health care fraud trends emerging 
during the COVID-19 crisis.  This has involved coordinating and training other Criminal 
Division and USAO prosecutors and offering support to their investigations and cases, including 
data analytics support.  The HCF Unit expects that the COVID-19 working group will continue 
to generate criminal prosecutions in several areas, including COVID-19 test bundling schemes, 
securities fraud cases involving health care technology companies, and CARES Act Provider 
Relief Fund (PRF) fraud cases.   
 
The HCF Unit conducted the May 2021 National COVID-19 Health Care Fraud Enforcement 
Action, which involved criminal charges against 14 defendants in seven federal districts across 
the United States for their alleged participation in various health care fraud schemes that 
exploited the COVID-19 pandemic and resulted in over $143.0 million in false billings.  The 
defendants were alleged to have engaged in various health care fraud schemes designed to 
exploit the COVID-19 pandemic, including by defrauding the PRF, exploiting regulatory 
waivers that were designed to encourage access to care, and offering COVID-19 tests and 
misusing the information and samples to submit claims to Medicare for medically unnecessary, 
and far more expensive laboratory tests.   
 
As part of the May 2021 Enforcement Action, for example, the president of a publicly traded 
medical technology company was charged along with two others in connection with the 
submission of over $70.0 million in false and fraudulent claims for allergy and COVID-19 
testing.  The conspiracy involved false and fraudulent statements about the existence, regulatory 
status, and accuracy of the companys COVID-19 test and allegedly sought to commit securities 
fraud and induce the ordering of the companys COVID-19 test and medically unnecessary 
allergy test.  The charges against the companys president were the first criminal securities fraud 
prosecution related to the COVID-19 pandemic that was brought by the DOJ, and were the result 
of a collaboration among the Fraud Sections HCF and Market Integrity Major Fraud Units and 
the U.S. Attorneys Office for the Northern District of California.  Four defendants have pled 
guilty in connection with the scheme and the companys president is awaiting trial.  
 
The HCF Unit also has led efforts across the country to prosecute misuse of COVID-19 
vaccination record cards. In the Northern District of Illinois, the HCF Unit charged a licensed 
pharmacist with crimes related to his alleged theft and sale of authentic Centers for Disease 
Control and Prevention (CDC) vaccination cards on eBay.  In the Northern District of California, 
the HCF Unit and the USAO charged a California-licensed naturopathic doctor for her alleged 
 
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scheme to sell homeoprophylaxis immunization pellets and to falsify COVID-19 vaccination 
cards by making it appear that customers had received the FDA-authorized Moderna vaccine. 
The case in the Northern District of Illinois was the first federal criminal fraud prosecution 
related to fake vaccination cards.   
 
The HCF Unit has brought criminal charges in the past year against nine defendants across the 
country who allegedly engaged in the misuse of the PRF monies.  The PRF was intended to 
provide relief to health care providers and maintain the access to medical care during the 
pandemic, money set aside to help Americans get needed medical care in a global health and 
economic crisis.  The defendants in these cases allegedly intentionally misappropriated 
government funds that were designed to aid medical providers in the treatment of patients 
suffering from COVID-19 and used them for their own personal expenses, including for 
gambling debts at a Las Vegas casino and payments to a luxury car dealership.  
 
Increased USAO outreach by the Strike Force partners is another positive measure that reflects 
the overall impact of the HCFAC program.  This year, the HCF Unit coordinated and hosted its 
largest ever National Health Care Fraud and Opioid Training Conference, which was attended 
virtually by more than 800 attendees (representing more than 67 U.S. Attorneys Offices) and 
law enforcement personnel from FBI, DEA, HHS-OIG, IRS-Criminal Investigation, Department 
of Defense (DOD), and U.S. Postal Service (USPS).  The Conference provided training on 
investigative techniques and tools, trial skills, case studies, and persistent and emerging schemes 
in both health care fraud and opioid abuse and drug diversion. 
 
Since 2007, the HCF Unit has deployed data analytics combined with investigative intelligence 
to great success.  In 2018, the HCF Unit formed its own in-house data team, which now consists 
of eight analysts with deep experience in Medicare and Medicaid data analysis, as well as 
financial analysis, who identify egregious health care fraud and prescription opioid-related 
targets to ensure the HCF Unit and its partners efficiently identify the worst offenders.  The 
concept and structure of the Data Analytics Team is regarded as ground-breaking for the 
Department.  The team uses data to identify billing patterns, suspicious prescribing practices, and 
curious relationships between doctors and patients that signify high-risk targets.  The 
investigations are then prosecuted by HCF Unit prosecutors or referred to USAOs and law 
enforcement partners in a targeting package, which includes data summaries and descriptions 
of why a pattern is suspect, such as submission of claims for dead beneficiaries, beneficiaries 
who live a great distance from the clinic they purportedly regularly attended in person, etc.38  In 
FY 2021, the team has completed approximately 5,643 requests for data analysis assistance.  
During this same time, it has also created a multitude of specific district-by-district targeting 
packages to help advance the HCF Units mission.  During this same time, it has also created 
hundreds of specific district-by-district targeting packages to help advance the HCF Units 
mission.   
 
38 For a medical professional, for example, the targeting package includes: (1) the fraud scheme(s) the individual is 
likely to be operating, (2) the patients and amount of money involved, (3) additional medical professionals and health care 
entities tied to the alleged scheme(s), (4) the location of entities involved in the scheme(s), and (5) areas for follow up by 
the prosecutor/agent team.  
 
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The Organized Crime and Gang Section (OCGS) 
 
The Criminal Divisions Organized Crime and Gang Section (OCGS) supports and conducts 
investigations of health care fraud and abuse targeting private sector health plans sponsored by 
employers and/or unions as well as health care fraud and abuse perpetrated by domestic and 
international organized crime groups.  There are more that 2.3 million such private sector health 
plans which cover some 135 million Americans.  OCGS also works to improve strategic 
coordination in the identification and prosecution of domestic and international organized crime 
groups engaged in sophisticated frauds posing a threat to the health care industry and provides 
legal advice and necessary approvals in the use of the RICO statute to combat health care fraud 
and abuse.  
 
In FY 2021, six OCGS attorneys conducted health care fraud prosecutions and investigations. 
In Knoxville, Tennessee, two OCGS attorneys continued working with the USAO for the Eastern 
District of Tennessee on the prosecution of a pain clinic co-owner and nurses for their roles in 
running pill mills.  The co-owner and three nurse practitioners were convicted following a 
three-month trial.  In October 2020, the clinic co-owner was sentenced to more than 33 years in 
prison and forfeiture of $3.6 million for her convictions of RICO conspiracy, two counts of drug 
conspiracy, money laundering offenses, and maintaining drug-involved premises.  Then in 
December 2020, three nurse practitioners were sentenced to prison terms ranging from 30 to42 
months for their convictions of maintaining drug involved premises.  The drug conspiracy 
involved the operation of four clinics which were basically pill mills which distributed over 11 
million tablets of oxycodone, oxymorphone, and morphine that generated over $21.0 million in 
clinic revenue, with a corresponding street value of $360.0 million.  Two part-owners charged 
with RICO conspiracy remain under indictment and are scheduled for trial in FY 2022.  This 
partnership between OCGS and the Eastern District of Tennessee has resulted in the 
investigation and prosecution of over 140 individuals.  This case was part of the Department's 
Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI High Intensity Drug 
Trafficking Area (HIDTA) programs.  OCDETF is the primary weapon of the United States 
against the highest-level drug trafficking organizations operating within the United States, 
importing drugs into the United States, or laundering the proceeds of drug trafficking.  This case 
is summarized above in the Highlights of Significant Criminal and Civil Investigations.  
In July 2021, two OCGS attorneys handled the retrial, in the District of Columbia, of a former 
union official resulting in a conviction for health care fraud.  The health care fraud charge 
stemmed from the union officials arranging for his girlfriend to be fraudulently placed on the 
unions health plan knowing that she was not a full-time employee of the union and, therefore, 
not eligible to participate in the health plan.  More than $66,000 in medical reimbursements were 
allegedly paid out of the unions health plan on behalf of his girlfriend to which she was not 
entitled.  The union official was acquitted of health care fraud conspiracy. 
Another two OCGS attorneys managed the investigation of health care fraud, embezzlements 
and other criminal abuses involving third party administrators to private sector health plans.  
 
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OCGS attorneys routinely provide litigation support and advice to AUSAs and criminal 
investigative agencies in the investigation and prosecution of corruption and abuse of private 
employment-based group health plans covered by the Employee Retirement Income Security Act 
(ERISA) including fraud schemes by corrupt entities that sell unlicensed group health insurance.  
Private sector employment-based group health plans are the leading source of health care 
coverage for individuals not covered by Medicare or Medicaid.  OCGS provides litigation 
support as requested at any stage of the prosecution from indictment through trial and appeal.   
OCGS attorneys provide health care fraud and abuse training and legal guidance to AUSAs and 
to criminal investigators and agents of the Department of Labors Employee Benefits Security 
Administration and Office of Inspector General, FBI and IRS.  Such training and guidance cover 
prosecutions involving abuse of private sector employee health plans subject to ERISA and 
health plans sponsored by labor organizations, as well as fraud and abuse committed in 
connection with the operation of MEWAs.  OCGS is also responsible for drafting and reviewing 
criminal legislative proposals affecting employee health benefit plans.  Finally, OCGS provides 
legal guidance to prosecutors and required approvals in the use of the RICO statute in 
prosecutions of racketeering enterprises involved in the distribution of opioids, fentanyl, and 
other pharmaceuticals; Medicare and Medicaid frauds; and private sector health care frauds.    
 
 
Civil Rights Division 
The Civil Rights Division was allocated $6.9 million in FY 2021 HCFAC funding to support 
Civil Rights Division litigation activities related to health care fraud and abuse.  The Civil Rights 
Division pursues relief affecting public, residential, and nonresidential health care facilities and 
service systems, and conducts investigations to eliminate abuse and grossly substandard care in 
public, Medicare, and Medicaid funded long-term care facilities.  Consistent with the ADAs 
integration mandate set forth in 28 C.F.R.  35.130(d), and the Supreme Courts ruling in 
Olmstead v. L.C., 527 U.S. 581 (1999), the Division also works to prevent the unnecessary 
segregation of individuals who require health care supports and services.   
  
The Division plays a critical role in the HCFAC Program.  The Special Litigation Section of the 
Civil Rights Division is the sole DOJ component responsible for enforcing the Civil Rights of 
Institutionalized Persons Act, 42 U.S.C. 1997 (CRIPA).  CRIPA authorizes the investigation of 
conditions of confinement at residential institutions owned or operated by or for state or local 
governments, including facilities for persons with developmental disabilities or mental illness, 
and nursing facilities, and initiation of a civil action for injunctive relief to remedy a pattern or 
practice violation of the Constitution or federal statute.  In addition, both the Special Litigation 
Section and the Disability Rights Section have engaged in interagency coordination with the goal 
of combatting the misuse of Medicaid funding related to the unnecessary segregation of persons 
with disabilities.  
 
The Disability Rights Section of the Civil Rights Division has primary enforcement authority 
for the Americans with Disabilities Act (ADA).  Title II of the ADA authorizes the 
investigation of allegations of discrimination by public entities against individuals with 
 
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disabilities, including discrimination in the form of unnecessarily segregating persons who 
require health care supports and services.  See Olmstead, 527 U.S. 581.  Title II also authorizes 
the initiation of civil actions to remedy discrimination in violation of the ADA.  In addition to 
violating the civil rights of individuals with disabilities, such unnecessary segregation often 
increases Medicaid costs.  Both the Disability Rights Section and the Special Litigation Section 
enforce the ADAs prohibition on unnecessary segregation.  
 
The Educational Opportunities Section of the Civil Rights Division also participates in the 
HCFAC Program to address the use of Medicaid funding for youth with disabilities who are 
unnecessarily placed in segregated education settings, including segregated residential 
placements, in violation of the ADA.  The Special Litigation, Educational Opportunities, and 
Disability Rights Sections work collaboratively with the USAOs and with HHS. 
 
FY 2021 Accomplishments  
 
Key litigation and enforcement accomplishments in FY 2021 of the Civil Rights Division are: 
 
  Number of matters in active enforcement:  17 
  Cumulative estimate of individuals with disabilities affected:39  69,523 
  Number of institutional facilities affected:   2,178 
 
Special Litigation Section 
 
In FY 2021, the Sections enforcement efforts affected more than 1,400 health care facilities in 
seven states, and included post-trial remedial efforts involving the unnecessary segregation of 
people with serious mental illness, the opening of two new investigations, the filing of a 
statement of interest,40  and monitoring compliance with six agreements impacting over 25,000 
individuals with disabilities.   
 
In October 2020, the Section and the United States Attorneys Office for the District of New 
Jersey opened an investigation under CRIPA into New Jersey Veterans Memorial Home at 
Menlo Park and New Jersey Veterans Memorial Home at Paramus (Veterans Homes).  The 
investigation is examining whether the Veterans Homes engage in a pattern or practice of 
violating the constitutional rights of residents by denying them appropriate medical care 
generally, and during the coronavirus pandemic in particular.  The investigation continues.    
 
In December 2020, the Section initiated an investigation of the State of Alaska under the ADA.  
The investigation will determine whether Alaska provides services to children with mental health 
disabilities in the most integrated settings appropriate.  That same month, the Section opened an 
 
39 Cumulative estimates of individuals with disabilities affected for FYs 2018-2020 are updated as follows: FY 
2018, from 55,685 to 58,422; FY 2019, from 59,090 to 59,422; FY 2020, from 52,990 to 59,422. 
40 The Statement of Interest, filed in Disability Rights Arkansas v. Solomon Graves 4:20-cv-01081, (E.D. Ark.) in 
February 2021, concerned medical records access for federal protection and advocacy organizations that monitor 
and enforce the rights of people with disabilities. 
 
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investigation into whether Nevada provides services to children with mental health disabilities in 
the most integrated settings appropriate.  Both investigations are ongoing.  In December 2020, 
the Section also issued a CRIPA findings report concluding that there is reasonable cause to 
believe the State of Iowa subjects Glenwood Resource Center (Glenwood) residents to 
unreasonable harm and risk of harm, in violation of their Fourteenth Amendment rights.  
Specifically, the Division found reasonable cause to believe that Iowa has subjected people with 
intellectual disabilities residing at Glenwood to:  (1) uncontrolled and unsupervised 
experimentation; (2) inadequate physical and behavioral healthcare; and (3) inadequate 
protection from harm, including deficient safety and oversight mechanisms.  The Section and the 
State are discussing necessary remedial measures at Glenwood.41   
 
In April 2021, the Section issued a report concluding there is reasonable cause to believe that 
Alameda County, California is violating the ADA in its provision of mental health services. 
The Sections investigation found that the County fails to provide services to qualified 
individuals with mental health disabilities in the most integrated setting appropriate to their 
needs.  Instead, it unnecessarily institutionalizes them at a public institution, John George 
Psychiatric Hospital, and in other facilities.  As a result, hundreds of people are institutionalized 
for lengthy stays at one of several large, locked psychiatric facilities in the County or are 
hospitalized at John George Psychiatric Hospital, while others are at serious risk of admission to 
these psychiatric institutions because of the lack of community-based services.  
 
In September 2021, the district court in United States v. Mississippi, 16-cv-622 (S.D. Miss.), 
issued a final remedial order after five years of contested litigation.  The order requires the state 
to divert adults with serious mental illness from unnecessary admission to the states four 
psychiatric hospitals.  It also requires the development and implementation of community-based 
services statewide to support individuals who are diverted from hospitalization or transitioned 
from a state Hospital.  Going forward, the Section will be monitoring compliance with the order 
in conjunction with a court-appointed monitor.   
 
The Section continued monitoring implementation of settlements in Georgia, Louisiana, New 
Hampshire, Virginia, and West Virginia that are helping individuals with intellectual, 
developmental, and mental health disabilities avoid unnecessary institutionalization.  In addition, 
the Section continued monitoring implementation of a settlement in Texas regarding conditions 
and care within institutions for people with intellectual and developmental disabilities.   
 
The Section continued to work toward a resolution of the Divisions investigative conclusion that 
South Dakota fails to serve older adults and people with disabilities in the most integrated setting 
appropriate to their needs.  
 
In its pending litigation with the State of Texas regarding the right to receive community-based 
services for people with intellectual and developmental disabilities (IDD) housed in Texas 
 
41 In December 2021 (FY 2022), the Division issued a CRIPA and ADA findings report concluding that Iowa fails 
to provide services to people with intellectual/developmental disabilities in the most integrated setting appropriate to 
their needs. 
 
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nursing facilities, Steward et al v. Young et al, 5:10-cv-1025, (W.D. Tex. 2010), the Section 
awaits a ruling from a trial completed in FY 2019.   
 
Disability Rights Section 
In FY 2021, the Disability Rights Section monitored compliance with seven settlement 
agreements, under which more than 24,900 people collectively will obtain relief, issued a letter 
of findings in one investigation, continued litigation of another case involving unnecessary 
segregation of people with disabilities, and submitted a statement of interest in pending private 
litigation. 
 
In December 2020, the Section reached a settlement agreement with the State of North Dakota 
resolving complaints that the state unnecessarily institutionalizes adults with physical disabilities 
in nursing facilities.  Under the agreement, North Dakota will expand access to community-
based services so that individuals who are in, or at risk of entering, nursing facilities can choose 
to live in their own homes.  The state will provide these services to more than 2,500 individuals 
with physical disabilities over the term of the eight-year agreement.  
 
On June 4, 2021, the United States entered into a settlement agreement with the Maine 
Department of Health and Human Services (DHHS) to resolve a complaint alleging that Maines 
restrictions on services placed a young man with intellectual disabilities at serious risk of having 
to move from his own home to a group home or institution.  The United States issued a findings 
letter on February 10, 2020, concluding that Maine is violating the ADAs integration mandate in 
its provision of services under the States Home and Community Services for Adults with 
Intellectual Disabilities or Autism Spectrum Disorder Medicaid waiver program.  Following an 
investigation, the Department found that Maine failed to provide the complainant with necessary 
services in the most integrated setting appropriate to the complainants needs, and failed to 
reasonably modify its relevant service program to avoid discrimination, thereby placing the 
complainant at serious risk of unnecessary segregation.  The settlement agreement requires 
DHHS to implement remedial measures, including establishing and implementing a process for 
individuals to obtain an exception to the waiver programs cap on in-home services, and 
modifying the programs service planning process to ensure that members individual needs and 
preferences determine the services they receive and the setting(s) in which they receive them. 
For the complainant, the agreement requires DHHS to provide access to all needed in-home 
services and pay $100,000 in damages. 
 
The Section continued to monitor the implementation of its settlement agreement with the State 
of North Carolina, under which the State is providing opportunities to individuals with mental 
illness in adult care homes to transition to less costly, integrated service settings.  As of August 
30, 2021, 4,671 individuals had been diverted or moved from large adult care homes to 
permanent supported housing since the agreement went into effect in 2012.  This total includes 
2,605 individuals who were diverted from adult care homes upon discharge from a State 
psychiatric hospital or upon being considered for admission to an adult care home, and 2,066 
individuals who moved out of adult care homes into the community.  Of the 4,671 individuals 
who have moved into permanent supported housing, 2,989 (or 64 percent) continue to receive 
 
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services in the community.  In addition, 5,760 individuals were receiving assertive community 
treatment services, and 2,640 individuals in the agreements target population had received 
supported employment services over the course of the agreement. 
 
The Section also continued to monitor its two settlement agreements with the State of Rhode 
Island, addressing the unnecessary segregation of individuals with disabilities in sheltered 
workshop and facility-based day programs.  Under the agreements, the State will provide 
supported employment placements to roughly 2,100 individuals with IDD by 2024, and roughly 
3,600 individuals will benefit from changes to the States employment and day service systems. 
Thus far, 964 individuals have obtained competitive, integrated employment over the course of 
these agreements. 
 
The Section, along with the USAO for the Eastern District of New York, continued monitoring a 
second amended settlement agreement with the State of New York and private plaintiffs 
regarding New Yorks mental health service system.  The agreement benefits at least 2,500 
people and remedies discrimination by the State in the administration of its mental health service 
system.  Under the agreement, individuals with serious mental illness who reside in 22 large 
institutional settings known as adult homes in New York City are provided the opportunity to 
receive services in the most integrated setting appropriate to their needs consistent with the ADA 
and Olmstead.  These individuals can choose to live and receive services in the community, 
enabling them to live, work, and participate fully in community life.  To date, more than 1,000 
former adult home residents have transitioned to and received services in the community, and 
over 2,000 additional adult home residents have expressed interest in doing so.    
 
The Section is working with class plaintiffs to monitor a settlement agreement with the State of 
Oregon.  Pursuant to the agreement, the State is decreasing its reliance on segregated 
employment settings and increasing supported employment services to help individuals with 
IDD obtain competitive integrated employment.  The State committed to provide supported 
employment services and related employment services so that by June 30, 2022, 1,115 working-
age individuals receiving sheltered workshop services would newly obtain competitive integrated 
employment.  The State also agreed that by July 1, 2022, it would provide employment services 
to at least 7,000 target population members, including 4,900 youths aged 14 to 24, and Individual 
Plans for Employment to at least half of those youths.  The State has reported that as of March 
2021, it had reduced the census of segregated sheltered workshop settings to 0.  The State has 
also reported that through the end of June 2021, it had provided supported employment services 
and related employment services so that 1,110 individuals receiving sheltered workshop services 
have newly obtained competitive integrated employment.  The State has also reported that 
through the end of June 2021, 6,815 target population members had received a new employment 
service, including, 4,675 transition-aged youths, and 4,025 of those youths had received an 
Individual Plan for Employment.   
 
The Section received a ruling on the States petition for rehearing filed with the U.S. Court of 
Appeals for the Eleventh Circuit in United States v. Florida.  In 2013, the Section commenced 
litigation against the State of Florida, alleging among other things, that the state administers its 
Medicaid service system for children with significant medical needs in violation of Title II of the 
 
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ADA by unnecessarily segregating them in nursing facilities, when they could, and want to, be 
served at home or in other community-based settings.  On September 20, 2016, U.S. District 
Court for the Southern District of Florida issued an order dismissing the United States claims.  
The United States filed a notice of appeal with the U.S. Court of Appeals for the Eleventh 
Circuit, which on September 17, 2019, issued an opinion reversing the District Courts order of 
dismissal and remanding and on December 22, 2021, the petition for rehearing was denied. 
 
Educational Opportunities Section 
 
The Educational Opportunities Section (EOS) has participated in the HCFAC Program for the 
past eight years.  The Section has carefully analyzed the legal issues related to unnecessary 
segregation in the context of K-12 schools.  In pending litigation against the State of Georgia, the 
Section alleges that the State is violating Title II of the ADA in its use of segregated educational 
services for approximately4,5000 Georgia students with emotional and behavioral disabilities.  A 
multi-year stay of that litigation was lifted in May 2020 and discovery is ongoing with the State 
with an anticipated 2022 trial date.  In another matter, the Section is actively investigating the 
State of Alabama about the States practice of placing children from the foster care system in 
psychiatric residential treatment facilities based on a need for care spaces, and then providing 
educational services only at segregated on-site schools.  The Section recently settled a major 
case involving districts sending children home on shortened days repeatedly segregating them 
from their peers without disabilities.  Finally, we have opened investigations of five school 
districts across the country that routinely segregate students with disabilities through seclusion 
and restraint practices in violation of the ADA. 
 
 
 Office of the Inspector General 
 
The Office of the Inspector General (DOJ-OIG) was allocated $1.4 million in FY 2021  
HCFAC funding to address health care fraud as it directly impacts the DOJ operations.   
The DOJ spends over $1.0 billion a year to provide health care to inmates of the Federal Bureau 
of Prisons (BOP) and the U.S. Marshals Service (USMS); and expends more than $115.0 million 
a year in annual workers compensation payments related to disabled and injured DOJ 
employees and informants.   
 
DOJ-OIG pursues a comprehensive approach to reducing fraud, waste, and abuse in the 
oversight of healthcare fraud among DOJ components.  One means by which DOJ-OIG 
accomplishes this is through the issuance of public reports that highlight internal control risks 
and recommend corrective actions on issues found.  The DOJ-OIG is currently conducting two 
audits of BOP comprehensive medical services contractors. The preliminary objective of these 
audits is to assess BOPs administration of the contracts, and the contractors performance and 
compliance with the terms, conditions, laws, and regulations applicable to these contracts. 
 
Additionally, the DOJ-OIG Investigations Division collaborates with the DOJ-OIG Audit 
Divisions Office of Data Analytics (ODA) to detect and deter fraud, waste and abuse in these 
 
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contracts and programs.  The DOJ-OIG ODA collects, cleans, validates, analyzes, and stores 
healthcare claims data to identify anomalous billing and prescription patterns and refers 
investigative leads to the Investigations Division for evaluation of investigative merit.  Although 
the DOJ-OIG can obtain standardized data for workers compensation payments and USMS 
healthcare claims data, BOP lacks a centralized system of inmate healthcare claims data. Thus, 
the DOJ-OIG ODA invests additional resources to stand-up an IT infrastructure that securely 
stores and standardizes healthcare claims data received via OIG subpoena from the numerous 
BOP comprehensive medical services contractors.  BOP, USMS, and workers compensation 
healthcare related data reside in a DOJ-OIG ODA data lake that contains stringent controls to 
safeguard this sensitive data. 
 
In FY 2020 and FY 2021, these efforts resulted in four cases for the Investigations Division and 
a Management Advisory Memorandum (MAM) to BOP, recommending that BOP establish and 
implement a procurement plan for air ambulance services that includes procedures for processing 
both claims billed through existing and future comprehensive medical services contracts and 
claims billed by air ambulance providers.  Secondly, upon establishing a procurement plan for air 
ambulance claims, the BOP should issue guidance to its health services administrators and 
contracting staff about how to appropriately adjust and process air ambulance claims.   
 
During FY 2021, the DOJ-OIG continued participating in two healthcare fraud working groups 
and continued to collaborate with other federal agencies that investigate healthcare fraud.  These 
efforts have provided opportunities for the DOJ-OIG to collaborate and share ideas with other 
organizations.  Additionally, the DOJ-OIG sought refreshed healthcare claims data directly from 
BOP comprehensive medical service providers.  The additional data will help to build upon the 
DOJ-OIGs comprehensive BOP healthcare data bank, ensuring the ability to use historical data 
as the foundation for predictive analytics efforts.   
 
Due to the COVID-19 pandemic, DOJ-OIG did not receive U.S. Department of Labor workers 
compensation claims data until the second half of FY 2021.  Since the OIG has received          
FY 2020 and FY 2021 workers compensation data, efforts have resumed in identifying 
potentially fraudulent billing patterns by providers as well as anomalous prescription drug claims 
and continuing to build upon DOJ-OIGs predictive analytics abilities.  The analysis of the 
Departments workers compensation data resulted in the initiation of multiple ongoing 
investigations.  
 
In FY 2021, a BOP comprehensive medical services (CMS) contractor agreed to settle to resolve 
False Claims Act allegations. The prison health care provider agreed to pay $694,593 for 
submitting claims for payment to the BOP that falsely represented the medical services provided 
to inmates.  The DOJ-OIG also identified approximately $44,126 in overpaid non-hospital 
laboratory claims to a BOP CMS contractor.  Through analysis of claims data, the DOJ-OIG 
determined the CMS contractor billed the BOP at the outpatient physician rate rather than the in-
network laboratory services rate. Since receiving initial funding, the DOJ-OIG has opened a total 
of 25 investigations related to DOJ healthcare-related activities and programs.  
The DOJ-OIG Evaluation and Inspections Division is conducting an ongoing evaluation of 
USMS drug costs and continues to monitor BOP efforts to implement recommendations made in 
 
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an FY 2020 report on BOP drug costs.   
 
FY 2021 Accomplishments  
 
Key oversight accomplishments in FY 2021 for the DOJ-OIG include: 
 
  Recoveries from False Claims Allegation Settlement: $694,593, 
  Identified overpayments: $44,126, 
  Management Advisory Memos issued to reduce program waste: 1, 
  Audits performed to reduce program waste: 2, and 
  Ongoing Evaluations performed to reduce program waste: 1 
 
   
 
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APPENDIX 
 
Federal Bureau of Investigation 
 
The FBI was allocated $152.4 million in funding from HIPAA to support the facilitation, 
coordination and accomplishment of the goals of the HCFAC Program.  In addition, the FBI 
received $6.9 million of the DOJ FY 2021 Discretionary HCFAC funding, which was primarily 
used by the FBI to align FBI investigative resources with DOJ prosecutive resources to address 
the health care fraud (HCF) threat.  The majority of the HCFAC funding the FBI received in FY 
2021 was used to support 836 positions (505 Agent, 331 Support).  In addition to funding 
personnel resources, the FBI utilized HCFAC funding to support undercover operations, 
financial and investigative analysis support, offsite HCF Task Force locations, operational travel, 
and other investigative and operational costs.   
 
In FY 2021, the FBI opened 593 new health care fraud (HCF) investigations. 2,947 
investigations were pending at the end of FY 2021.  Investigative efforts throughout the fiscal 
year produced 470 criminal HCF convictions, 526 indictments, and 281 prosecutors 
informations.  In addition, investigative efforts resulted in over 559 operational disruptions of 
criminal fraud organizations and the dismantlement of more than 107 HCF criminal enterprises.  
 
The FBI is the primary federal agency responsible for identifying and investigating health care 
fraud targeting both public health care benefit programs and private health care plans.  HCF 
investigations are considered a high priority within the FBIs Complex Financial Crime Program.  
Each of the FBIs 56 field offices have personnel assigned to investigate HCF matters.  
 
The FBI seeks to approach the HCF crime problem in a threat-based and intelligence-driven 
manner.  The approach employs the prioritization of threats and enforcement efforts, at both the 
national and field office levels, to ensure limited resources are focused on the most significant 
entities committing health care fraud and abuse.  As part of the HCF threat review and 
prioritization process, the FBI gathers relevant data and information to understand the impact of 
the HCF crime problem and to identify intelligence gaps, or areas which require additional 
research and analysis.  The process is on-going and requires collaboration not only among FBI 
components, but also with its partners in the public and private sectors.  As a result of the 
process, the FBI has designated criminal enterprises, corporate-level fraud and abuse, and public 
safety issues, to include those arising from the ongoing prescription opioid abuse epidemic, as 
the priority HCF threat areas of focus.  Each field office conducts a similar analysis to review 
and prioritize threats in their geographic area of responsibility, including setting forth the specific 
actions they will take to mitigate them.   
 
FBI field offices throughout the U.S. address the HCF threat through joint investigative efforts; 
the collection, analysis, and sharing of intelligence; and the utilization of advanced and 
sophisticated investigative techniques.  FBI field offices participate in DOJ-led Medicare Strike 
Forces, HCF task forces, and HCF working groups with federal, state, and local law enforcement 
and regulatory partners, including local USAOs, HHS-OIG, DEA, IRS, FDA, and state MFCUs. 
 
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The FBI also conducts significant information sharing and coordination efforts with private 
insurance partners through the National Health Care Anti-Fraud Association (NHCAA), the 
National Insurance Crime Bureau (NICB), and private insurance special investigative units.  The 
FBI is also actively involved in the HFPP, an effort to exchange information between the public 
and private sectors in order to reduce the prevalence of HCF.  
 
These collaborative relationships facilitate information sharing and coordination among the 
government agencies and private entities involved in addressing the HCF threat.  Moreover, 
these relationships allow for the identification of HCF threat trends and the initiation of new 
cases against the most egregious offenders involved in health care fraud and abuse.  
 
The FBIs Health Care Fraud Unit (HCFU), which is housed within the Criminal Investigative 
Divisions Financial Crimes Section, manages the FBIs HCF program, including providing 
operational and administrative support and guidance to 56 field offices to assist them in their 
efforts to identify and investigate health care fraud.  The FBIs HCFU also establishes national 
HCF program initiatives to ensure a coordinated approach to addressing the HCF threat.  In 
support of joint agency activities and general threat mitigation efforts, the HCFU developed and 
supported five national program initiatives in FY 2021, to include the Health Care Fraud Task 
Force and Working Group Initiative, Prescription Drug Initiative, Large-Scale Conspiracies 
Initiative, Major Provider Fraud Initiative, and the Outreach, Education, and Liaison Initiative.  
 
The Health Care Fraud Task Force and Working Group Initiative  
The Health Care Fraud Task Force and Working Group Initiative was established to encourage 
the formation of joint FBI-led HCF task forces and working groups.  Joint task forces and 
working groups combine federal, state, and local law enforcement and regulatory resources to 
address the health care fraud threat.  Task forces serve as a force multiplier for FBI efforts by 
bringing the experience, expertise, and resources of our federal, state, local, and tribal partners to 
bear to mitigate the HCF threat.  Task forces and working groups result in improved sharing of 
threat-related intelligence among participating agencies and expand criminal and civil tools for 
participants to use to identify and disrupt criminal activity.  Task force participants and their 
employing agencies also benefit from increased access to FBI training and equitable sharing 
arrangements.  In FY 2021, the FBI opened more than 170 joint HCF investigations among 13 
established task forces and opened more than 290 joint HCF investigations bureau-wide among 
its task force and working group partners. 
 
The FBI participates in DOJ Medicare Fraud and ARPO Strike Force throughout the country.  
Specifically, the FBI supports DOJ HCF Strike Forces located in Florida (Miami, Tampa, 
Orlando), Los Angeles, Texas (Houston, Dallas, McAllen/Rio Grande), the Gulf Coast (New 
Orleans, Baton Rouge, and Southern Mississippi), Detroit, Brooklyn (NYC), Chicago, Newark / 
Philadelphia, ARPO North (Kentucky, Ohio, Virginia, and West Virginia), ARPO South 
(Tennessee and Northern Alabama), and Washington D.C. NRRSF.   
 
In addition, in FY 2021, the FBI established the Health Care Fraud National Rapid Response 
Team (HCFNRT), a specialized team comprised of experienced Special Agents, Intelligence 
Analysts, and other professional staff members who are charged with investigating, or assisting 
 
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in the investigation of, complex health care fraud cases throughout the county.  HCFNRT 
members work closely with the DOJ prosecutors serving on the DOJ National Rapid Response 
Strike Force, thus aligning FBI investigative resources with DOJ resources.  
 
In September 2021, the FBI participated in a DOJ national HCF Law Enforcement Action that 
resulted in criminal charges against 117 subjects, including 39 doctors, nurses, and other licensed 
medical professionals, for their alleged participation in HCF schemes involving approximately 
$1.1 billion in false billings.  The continued support of DOJ Strike Force operations is a top 
priority for the FBI.  Additionally, the FBI coordinates and shares intelligence with HHS and 
DOJ components on other prevention and enforcement activities, to include efforts associated 
with the Large-Scale Conspiracies, Major Provider Fraud, and Prescription Drug Initiatives.  
 
As part of the DOJ ARPO Strike Force initiative to address the illegal diversion of prescription 
opioids in the Appalachian Region, DOJ provided additional funding to the FBI to support the 
deployment of Special Agents dedicated to identifying and investigating individuals, including 
medical professionals, who divert prescription opioids, and thus contribute to the nations opioid 
epidemic.  The ARPO Strike Force operates in Birmingham, Cincinnati, Knoxville, Louisville, 
Memphis, Pittsburgh, and Richmond.   
 
In September 2020 a physician, who was one of the highest prescribers of opiates in North 
Alabama, and who routinely accepted kickbacks in various forms in exchange for referrals for 
prescriptions, urine drug testing, durable medical equipment, and other studies, along with six 
other individuals, including his wife, son, and a brother, were arrested and charged in furtherance 
of the ARPO Initiative.  The subjects were charged with distribution and conspiracy to distribute 
controlled substances, health care fraud, violating the anti-kickback statute, and money 
laundering.  During the course of the investigations, approximately $41 million in fraudulent 
claims were submitted to Medicare, Tricare, and private insurance programs, out of which 
approximately $14.0 million was paid to the subjects.  
 
The Prescription Drug Initiative 
The Prescription Drug Initiative identifies and targets criminal enterprises and other groups or 
individuals engaged in prescription drug schemes, and prosecutes improper prescribing and 
dispensing practices of controlled substances.  These schemes are a significant crime problem as 
they impact public health and safety.  In Detroit, a physician was sentenced to 10 years 
imprisonment and assessed a $20,000 fine after pleading guilty to one count of conspiracy to 
distribute controlled substances and 19 counts of unlawful distribution of controlled substances.  
This physician conspired with others to issue a large number of prescription opioids to recruited 
patients who did not have a legitimate medical need, in exchange for cash payment.  During the 
pendency of the scheme, the physician prescribed more than one million dosage units of 
Schedule II drugs, predominantly oxycodone and oxymorphone, in addition to benzodiazepines, 
with a street value in excess of $22.0 million.  The FBI coordinated efforts in this case with the 
Detroit City Medicare Strike Force 
 
The Large-Scale Conspiracies Initiative 
The Large-Scale Conspiracies Initiative seeks to identify and target criminal enterprises and 
 
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other groups whose schemes result in significant monetary losses, or potential losses, to 
government health care benefit programs and private health insurance plans.  This initiative 
focuses predominantly on organized groups of individuals who co-opt medical providers to 
collaborate in fraud schemes.  Examples of the complex schemes carried out by these criminal 
organizations include the sharing and selling of beneficiaries personal identifying information, 
multi-tiered kickback schemes involving fraudulent referrals, and billing for medically 
unnecessary services or medical services that were never provided.   
 
In furtherance of this initiative, an investigation into a compounding pharmacy located in 
Massachusetts was opened after a nationwide outbreak of fungal meningitis occurred.  The 
outbreak was traced back to contaminated vials of preservative-free methylprednisolone acetate 
(MPA) manufactured in the compounding pharmacy.  The CDC reported that 753 patients in 20 
states were diagnosed with a fungal infection after receiving injections from the compounding 
pharmacy.  Of those 753 patients, more than 100 patients died and approximately 800 patients 
were sickened.  The outbreak was the largest public health crisis ever caused by a contaminated 
pharmaceutical drug.  Fourteen individuals were indicted including a co-owner and head 
pharmacist, and a supervisory pharmacist.  In FY 2021, the co-owner/head pharmacist was 
sentenced to 14.5 years in prison, ordered to forfeit $1.4 million in assets, and to pay $82.0 
million in restitution.  The supervisory pharmacist was sentenced to 10.5 years in prison, 3 years 
of supervised release, and ordered to pay $82.0 million in restitution.  The case was worked 
jointly with the FDA Office of Criminal Investigations, Department of Veterans Affairs OIG, 
Department of Defense OIG, Defense Criminal Investigative Service, and the U.S. Postal 
Inspection Service.    
 
Major Provider Fraud Initiative 
The Major Provider Fraud Initiative seeks to identify and target major medical providers, such as 
corporations, companies, and other groups engaging in significant medical billing fraud schemes 
that result in, or are intended to result in, large monetary losses to taxpayer funded, government 
health care benefit programs and private health care plans.  This initiative is intended to focus 
FBI operations on the most significant schemes impacting public and private health insurance 
programs and plans, to include focusing on large civil suits and threats to life.  Investigations 
targeting major providers are typically identified and initiated based upon data analytics, the 
review of civil qui tam filings, coordination with HHS, and coordination with DOJs civil and 
criminal components.  Due to the complexity of major provider investigations, the FBIs HCFU 
provides ongoing support to field offices that initiate them, including coordinating investigative 
activity among multiple field offices and investigative support from the Health Care Fraud Case 
Support Team and the Health Care Fraud National Rapid Response Team.  Many FBI 
investigations conducted jointly with our partners on DOJs Medicare Fraud Strike Forces fall 
under this initiative.  
 
An example of an investigation opened in furtherance of the Major Provider Fraud Initiative is 
the investigation into Purdue Pharma, LLC.  From the mid-1990s through February 2018, Purdue 
Pharma heavily marketed its opioid products and spent up to $1.5 billion a year on opioid 
marketing efforts for its branded products, including Butrans (buprenorphine), Dilaudid 
(hydromorphone), Hysingla ER (hydrocodone bitartrate), MS Contin (morphine sulphate), and 
 
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OxyContin ER (oxycodone hydrochloride).  Between 2010 and 2018, Purdue Pharma paid 
doctors and pharmacies illegal kickbacks to encourage medically unnecessary opioid 
prescriptions, resulting in fraudulent claims to government healthcare programs.  In FY 2021, 
Purdue Pharma plead guilty to one count of dual-object conspiracy to defraud the United States 
and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the 
AKS  Purdue also agreed to pay a total of $8.3 billion to resolve criminal and civil charges.  The 
FBI Washington Field Office coordinated efforts in this case with the US Attorneys offices for 
the District of New Jersey and the District of Vermont; and the DOJ, Civil Division, Consumer 
Protection Branch. 
 
Outreach, Education, and Liaison initiative 
In FY 2021, the FBI established the Outreach, Education, and Liaison initiative to ensure that the 
FBI initiates and maintains ongoing and frequent contact with our law enforcement, regulatory, 
and private sector partners, as well as the general public regarding the health care fraud 
threat.  As the primary federal agency responsible for identifying and investigating health care 
fraud targeting both public health care benefit programs and private health care plans, the FBI 
must undertake measurable efforts to meet with our partners to share information and educate the 
public about the health care fraud threat.  To assist in these efforts, the HCFU is working with 
the FBIs Office of Public Affairs to launch a campaign to increase public awareness of potential 
indicators of health care fraud.  The campaign will consist of information that will assist the 
public in identifying health care fraud activity and how they can report it.  The campaign 
will also provide guidance to the public through various media advertisements, including a social 
media outreach component.  Furthermore, the HCFU updated the FBI.gov web site with helpful 
information such as common health care fraud schemes and tips on how to avoid becoming a 
victim of health care fraud scams. 
 
HCF Training & Enrichment Efforts 
The FBI actively provides training and guidance on HCF matters.  The FBI has partnered with 
the DOJ, HHS-OIG, and private insurance organizations to provide training in the priority threat 
areas of HCF.  Funded training has included innovative methods of employing advanced 
investigative techniques, basic HCF training for FBI Special Agents and professional staff newly 
assigned to investigate HCF, and sessions on new and current HCF trends and issues.  In FY 
2021, the HCFU continued its virtual trainings to address the educational needs of the FBI 
personnel throughout the pandemic in lieu of in-person training.  The virtual training platform 
made training more accessible to FBI personnel.  In FY 2021, twelve sessions were hosted with 
an attendance of 920 participants.  Some of the topics covered included current trends in HCF, 
working with private insurance special investigations units, and HCF data analytics, among 
others.  The FBI HCF program will continue to support employees attendance to qualified 
virtual and in-person training offered by federal and local law enforcements agencies along with 
the private sector.  
   
 
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Return on Investment Calculation 
 
  The return on investment (ROI) for the HCFAC program is calculated by dividing the total 
monetary results to the federal government (not including relator payments) by the annual 
appropriation for the HCFAC Account in a given year (not including portions of CMS 
funding dedicated to the Medicare Integrity Program listed in the table on page 123).   
 
  The monetary results include deposits and transfers to the Medicare Part A Trust Fund and 
the Treasury, as well as restitution and compensatory damages to federal agencies. 
 
  The HCFAC Account is made up of three funding sources: mandatory funding for HHS and 
DOJ, including HHS-OIG, appropriated through Section 1817(k)(3)(A) of the Social Security 
Act; mandatory funding for FBI activities appropriated through Section 1817(k)(3)(B) of the 
Social Security Act; and discretionary funding for the HCFAC Account appropriated through 
the annual Labor-HHS-Education appropriation.   
 
  FBI mandatory HIPAA funding is included in the HCFAC ROI calculations given the 
important role the FBI plays in achieving the monetary results reflected in the HCFAC 
annual report and because that statute states that the funds are for the same purposes as the 
funds provided for HHS and DOJ under the Social Security Act.  However, FBI spending 
and monetary results are not required to be reported per the statute.  Therefore, even though 
the FBI mandatory HIPAA funding is included in the HCFAC ROI calculation, it is not 
reflected in the table on page seven of this report.   
 
  Only certain portions of discretionary HCFAC Account funding are included in the ROI 
calculation.  All discretionary HCFAC funding for HHS-OIG and DOJ are included in the 
HCFAC report ROI since they spend their discretionary funding on the same types of 
activities that they support with mandatory funding.  Only the portion of CMS Medicare 
discretionary HCFAC funding that supports law enforcement is included in the HCFAC 
report ROI.  The remainder of CMSs HCFAC Medicare discretionary funding supports 
activities in the Medicare Integrity Program (MIP) that are included in the MIP ROI, which 
calculates the impact of the prevention activities supported by the MIP mandatory and 
discretionary funds is calculated separately from the HCFAC ROI and is reported outside of 
the HCFAC report.  Impacts for both the CMS Medicaid and Medicare program integrity 
funding are included in a separate report.  
 
   
 
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Total Health Care Fraud and Abuse Control Resources 
 
The table below sets forth HCFAC funding, by agency, for health care fraud and abuse control 
activities in FY 2021, including sequester suspension.  The FBI also receives a stipulated amount 
of HIPAA funding for use in support of the Fraud and Abuse Control Program, which is shown 
below.  Separately, CMS receives additional Mandatory Resources under the Medicare Integrity 
Program (section 1817(k)(4) of the Social Security Act).  The inclusion of the activities 
supported with these funds is not required in this report, and this information is provided for 
informational purposes only.  Since 2009, Congress has also appropriated annual amounts to 
help carry out health care fraud and abuse control activities within DOJ and HHS.  Those 
amounts are set forth as Discretionary Resources in the table below and the results of the efforts 
supported with these funds are contained within this report.
Mandatory Resources42  Fiscal Year 2021 
Office of Inspector General  $213,886,600 
Health and Human Services Wedge43  40,908,373 
Medicare Integrity Program44  941,463,113 
MIP/Medicare (non-add)  869,042,874 
Medi-Medi (non-add)  72,420,239 
Department of Justice Wedge41  66,781,285 
Federal Bureau of Investigation45  152,394,202 
Subtotal, Mandatory HCFAC  $1,415,433,573 
   
Discretionary Resources   
Office of Inspector General  $99,000,000 
CMS Program Integrity  616,000,000 
CMS Program Integrity (non-add)  596,000,000 
Senior Medicare Patrols (ACL non-add)  20,000,000 
Department of Justice  92,000,000 
Subtotal, Discretionary HCFAC  807,000,000 
Grand Total, HCFAC  $2,222,433,573 
 
42 Section 3709 of the CARES Act (P.L. 116-136) suspended Medicare sequestration from May 1, 2020 through 
December 31, 2020; the Consolidated Appropriations Act, 2021 (P.L. 116-260) extended this suspension to March 
31, 2021; and the Medicare sequester moratorium included in P.L. 117-7 extended the suspension again until 
December 31, 2021. This sequester adjustment was meant to provide an economic boost to Medicare providers 
treating patients during the COVID-19 PHE and has resulted in additional funding for the HCFAC program.  The 
three bills overlap to cover the entirety of FY 2021.  The FY 2022 sequester amount will reflect a pro-rated period 
from October 1, 2021 to December 31, 2021. 
43 The HHS and DOJ Wedge funds are divided among multiple agencies within HHS and DOJ.  Page 7 of this report 
includes the allocations of the HHS and DOJ Wedge by agency or activity. 
44 The Medicare Integrity Program (MIP) and Medicaid Integrity Program funds fraud prevention and detection 
activities within Medicare and is not part of this report to Congress.  A separate report to Congress addresses MIP, 
as well as the Medicaid Integrity Program. 
45 The FBI receives funding annually to conduct anti-fraud activities authorized by HIPAA.  This funding is 
included in the HCFAC ROI calculation for this report. 
 
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Glossary of Common Terms 
 
The AccountThe Health Care Fraud and Abuse Control Account 
 
ACAAffordable Care Act 
 
AKSAnti-Kickback Statute  
 
ACLDepartment of Health and Human Services, Administration for Community Living 
 
AUSAAssistant United States Attorney 
 
CHIPChildrens Health Insurance Program 
 
CIACorporate Integrity Agreement 
 
CMPCivil Monetary Penalty 
 
CMPLCivil Monetary Penalties Law 
 
CMSDepartment of Health and Human Services, Centers for Medicare & Medicaid Services    
 
CPICenter for Program Integrity 
 
CYCalendar Year  
 
DEADrug Enforcement Administration 
 
DMEDurable Medical Equipment 
 
DOJThe Department of Justice 
 
FBIFederal Bureau of Investigation 
 
FCAFalse Claims Act 
 
FDAFood and Drug Administration 
 
FFSFee-for-Service 
 
FYFiscal Year 
 
HCFACHealth Care Fraud and Abuse Control Program or the Program 
 
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HEATHealth Care Fraud Prevention & Enforcement Action Team 
 
HFPPHealth care Fraud Prevention Partnership  
 
HHAHome Health Agency 
 
HHSThe Department of Health and Human Services 
 
HHS-OIGThe Department of Health and Human Services - Office of Inspector General 
 
HIHospital Insurance Trust Fund 
 
HIPAAThe Health Insurance Portability and Accountability Act of 1996, P.L. 104-191 
 
MA  Medicare Advantage 
 
MAOMedicare Advantage Organization 
 
MFCUMedicaid Fraud Control Unit 
 
MEDICMedicare Drug Integrity Contractors 
 
OCGSOrganized Crime and Gang Section 
 
OGCOffice of the General Counsel, Department of Health and Human Services  
 
PECOSProvider Enrollment, Chain and Ownership System  
 
PERMPayment Error Rate Measurement 
 
PFPPharmaceutical Fraud Pilot Program 
 
The ProgramThe Health Care Fraud and Abuse Control Program 
 
SecretaryThe Secretary of the Department of Health and Human Services 
 
SMPSenior Medicare Patrol 
 
UPICUnified Program Integrity Contractor 
 
USAOUnited States Attorneys Office 
 
 
 
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