GAO-01-506

Report to Congressional Committees

United States General Accounting Office

GAO

March 2001 MEDICARE FRAUD

AND ABUSE

DOJ Has Improved

Oversight of False

Claims Act Guidance
Page i GAO-01-506 DOJ False Claims Act

Letter 1

Appendix I GAO Reports Concerning the Use of the False Claims

Act in Civil Health Care Fraud 15

Abbreviations

AHA American Hospital Association

DOJ Department of Justice

HCFA Health Care Financing Administration

HHS-OIG Department of Health and Human Services

 Office of Inspector General

PPS prospective payment system

Contents
Page 1 GAO-01-506 DOJ False Claims Act

March 30, 2001

Congressional Committees

Payments resulting from improper billing represent a major threat to the

fiscal integrity of Medicare—the federal health insurance program serving

approximately 39 million elderly and disabled Americans. The Department

of Justice (DOJ) places a high priority on identifying improper billing of

Medicare and other federally funded health care programs, and it reported

recoveries of over $840 million in fiscal year 2000 related to civil health

care fraud. Many of these recoveries are related to the False Claims Act,1

which provides for substantial damages and penalties against providers

who knowingly submit false claims to federal programs—including

federally funded health insurance programs.

The use of the False Claims Act against health care providers has been

controversial. The hospital industry has criticized DOJ for being overly

aggressive in its pursuit of hospitals for improper Medicare billings

through a series of nationwide investigations, known as national initiatives

or projects. For example, in 1998 many hospitals claimed that DOJ had

conducted unwarranted investigations and demanded large penalties for

unintentional errors related to billings for outpatient laboratory tests. In

response to hospital and congressional concerns, DOJ issued guidance on

the fair and responsible use of the act in civil health care matters,

including national initiatives, in June 1998. The guidance was intended to

emphasize the importance of pursuing False Claims Act cases against

health care providers in a fair and even-handed manner and to implement

new procedures related to national initiatives.

Congress subsequently required us to monitor DOJ’s implementation of

the guidance,2

 which has resulted in a series of reports (see app. I). While

our initial reviews indicated some problems with DOJ’s implementation of

 1

31 U.S.C. §§ 3729 to 3733: Anyone who “knowingly” presents false claims for payment to

the United States may be found to be in violation of the False Claims Act. The act defines

“knowingly” to include a person who (1) has actual knowledge of the false claim, (2) acts in

deliberate ignorance of the truth or falsity of the claim, or (3) acts in reckless disregard of

the truth or falsity of the claim.

2

These requirements were contained in the Omnibus Consolidated and Emergency

Supplemental Appropriations Act of 1999 (P.L. 105-277) and the Consolidated

Appropriations Act of 2000 (P.L. 106-113).

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-01-506 DOJ False Claims Act

the guidance, our more recent work shows that DOJ had made progress in

correcting these problems.

This report continues our ongoing evaluation of DOJ’s efforts to ensure

compliance with the guidance and focuses on the application of the

guidance in two recent DOJ initiatives. The Prospective Payment System

(PPS) Transfer initiative identifies hospitals that have incorrectly reported

patient transfers between hospitals as discharges. The Pneumonia

Upcoding initiative assesses whether Medicare has been billed improperly

on behalf of beneficiaries hospitalized with pneumonia. Both initiatives

focus on hospitals that may have received greater reimbursement from the

Medicare program than they were entitled to receive. Our specific

objectives were to (1) review the actions taken by DOJ to improve its

oversight of U.S. Attorneys’ Offices to ensure compliance with the

guidance and (2) determine if the PPS Transfer and Pneumonia Upcoding

projects are being conducted in accordance with the guidance.

While DOJ’s guidance applies to all civil health care fraud matters, we

focused our review, as we have in past reports, on the use of the guidance

in national initiatives. To evaluate DOJ’s oversight of U.S. Attorneys’

Offices, we discussed ongoing monitoring and compliance efforts with

DOJ officials, including those responsible for periodic evaluations of the

operations of each U.S. Attorney’s Office. We also reviewed relevant

materials related to these evaluations. To determine if the PPS Transfer

and Pneumonia Upcoding projects are being conducted in a manner

consistent with the guidance, we interviewed members of DOJ’s working

groups that coordinate each initiative. We also visited 4 of the 94 U.S.

Attorneys’ Offices and reviewed files for 11 closed matters and 15 open

matters, representing both initiatives. We chose the offices to visit in order

to review several examples of matters for each initiative. In addition, we

contacted representatives of the American Hospital Association (AHA)

and state hospital associations within each of the districts we visited to

obtain their views regarding the implementation of the guidance.

We were given access to documents through an agreement with DOJ to

ensure that confidentiality of ongoing cases and DOJ’s internal review

process would not be compromised. This agreement did not materially

affect our review because we were able to document compliance with

specific elements of the guidance in both open and closed matters. We

conducted our work between October 2000 and February 2001. Except for

these restrictions on our access, our work was performed in accordance

with generally accepted government auditing standards.
Page 3 GAO-01-506 DOJ False Claims Act

DOJ has taken steps to further strengthen its oversight of compliance with

its False Claims Act guidance. DOJ’s review of each U.S. Attorney’s

Office’s compliance with the guidance now appears to be an integral part

of the periodic evaluations it makes of all U.S. Attorneys’ Offices. Also,

DOJ’s annual requirement that all U.S. Attorneys’ Offices involved in civil

health care fraud control certify their compliance with the guidance

appears to have promoted compliance at the offices we visited. We found

that these offices had either documented their compliance in case files or

instituted a review process under the direction of their office’s Civil Chief.

Finally, we found that the working groups continue to coordinate national

initiatives and maintain ongoing contacts with participating U.S.

Attorneys’ Offices to determine whether they are complying with the

guidance.

Our review also suggests that DOJ is implementing its two most recent and

active national initiatives—the PPS Transfer and Pneumonia Upcoding

projects—in a manner that is consistent with the guidance. Our review

indicated that the working groups had conducted sufficient background

research and developed legal and factual bases underlying the initiatives.

They also provided U.S. Attorneys’ Offices participating in these initiatives

with detailed claims data, model contact letters, and other relevant

documentation before hospitals were contacted regarding potentially false

claims. The offices we visited coordinated their activities with the working

groups and, as the guidance requires, took each hospital’s unique

circumstances into consideration. The hospital association representatives

we spoke with continue to express concerns about the appropriateness of

DOJ’s use of the False Claims Act in civil health care matters, but did not

identify specific examples of noncompliance with the guidance among

U.S. Attorneys’ Offices. Officials from DOJ’s Executive Office for U.S.

Attorneys and its Civil Division generally concurred with our findings and

conclusions.

To emphasize fair and responsible use of the False Claims Act, DOJ issued

“Guidance on the Use of the False Claims Act in Civil Health Care Matters”

on June 3, 1998. The guidance instructs DOJ attorneys and U.S. Attorneys

to determine, before they allege violations of the act, that the facts and the

law sufficiently establish that the claimant knowingly submitted false

claims. The guidance covers all civil health care matters and has specific

provisions to address national initiatives. DOJ defines these initiatives as

nationwide investigations stemming from an analysis of national claims

data, indicating that numerous, similarly situated health care providers

have engaged in similar conduct to improperly bill government health care

Results in Brief

Background
Page 4 GAO-01-506 DOJ False Claims Act

programs. Prior to alleging a violation of the act in connection with a

national initiative, attorneys shall, in general, use contact letters to notify a

provider of a potential liability and give the provider an opportunity to

respond before a demand for payment may be made. The guidance

contains other safeguards to ensure the fair treatment of hospitals. For

example, U.S. Attorneys’ Offices must consider alternative remedies to the

use of the False Claims Act, including administrative remedies such as

recoupment of overpayments, program exclusions, and other civil

monetary penalties. In addition, they must also consider a provider’s

ability to pay; the effect on the community served by the provider,

particularly for rural and community hospitals; and the extent of provider

cooperation in the matter.

The guidance also requires the formation of a working group to coordinate

each national initiative. The working groups, composed of DOJ attorneys

and Assistant U.S. Attorneys with expertise in health care fraud control,

must develop “initiative-specific guidance” to provide direction and

support to the U.S. Attorneys’ Offices that are participating in the

initiative. For example, working groups may prepare a legal analysis of

pertinent issues, provide a summary of Medicare claims data indicating

potentially significant billing errors, and develop an investigative plan. The

working groups track the participating offices’ progress and respond to

their questions as each initiative proceeds. Ongoing contacts can help

assure the working group that the offices are following the guidance.

The two national initiatives that currently have the most active

investigations are the PPS Transfer and Pneumonia Upcoding projects.

The PPS Transfer3

 initiative was developed from a series of audits and

joint recovery projects by the Department of Health and Human Services

Office of Inspector General (HHS-OIG), the Health Care Financing

Administration (HCFA)—the agency within HHS that administers the

Medicare program—DOJ, and the claims processing contractors to

identify improperly coded transfers and recover overpayments from

hospitals.4

 The Pneumonia Upcoding initiative targets inappropriate

 3

Under Medicare’s prospective payment system, hospitals are reimbursed a single amount

to cover an entire inpatient stay. When a patient is transferred from one inpatient hospital

to another, the transferring hospital is only entitled to receive a pro-rated payment based

upon the patient’s diagnosis and the number of days at that hospital.

4

See, for example, HHS-OIG, Medicare Hospital Patient Transfers Incorrectly Paid as

Discharges—January 1992-December 1994 (A-06-95-0083), Nov. 1996, and Medicare

Hospital Patient Transfers Improperly Reported and Paid as Hospital Discharges (A-06-93-

00095), Feb. 1995.
Page 5 GAO-01-506 DOJ False Claims Act

coding of inpatient hospital claims for a relatively rare bacterial form of

the disease that is more costly to treat—approximately $2,500 more per

claim—than the more common forms of pneumonia. The initiative

assesses whether hospitals submitted claims for a more complex form of

the disease than was supported by the patient’s medical records.

This is the fourth report we have issued regarding DOJ’s implementation

of its False Claims Act guidance and its efforts to oversee compliance. In

February 1999, we issued an early status report on DOJ’s initial efforts to

implement the guidance.5

 In August 1999, we reported that DOJ’s process

for reviewing implementation of the guidance appeared superficial and

that U.S. Attorneys were not consistent in their application of the

guidance.6

 However, in March 2000, we reported that DOJ had taken steps

to improve compliance with its False Claims Act guidance.7

 We noted that

DOJ had strengthened its oversight of U.S. Attorneys’ Offices and that the

offices that we had previously found to be slow in implementing the

guidance appeared to have addressed their shortcomings. We also found

that the working groups were providing legal and factual material on each

national initiative for U.S. Attorneys’ Offices to consult prior to contacting

hospitals about potential False Claims Act liability.

DOJ has demonstrated its continued commitment to promoting the

importance of compliance with the False Claims Act guidance at its U.S.

Attorneys’ Offices. In response to our prior recommendations, DOJ

revamped its process for periodically evaluating the compliance of these

offices and instituted an annual compliance certification requirement for

all U.S. Attorneys’ Offices participating in national initiatives. These steps

have helped to encourage compliance.

 5

Medicare Fraud and Abuse: Early Status of DOJ’s Compliance With False Claims Act

Guidance (GAO/HEHS-99-42R, Feb. 1, 1999).

6

Medicare Fraud and Abuse: DOJ’s Implementation of False Claims Act Guidance in

National Initiatives Varies (GAO/HEHS-99-170, Aug. 6, 1999).

7

Medicare Fraud and Abuse: DOJ Has Made Progress in Implementing False Claims Act

Guidance (GAO/HEHS-00-73, Mar. 31, 2000).

DOJ Continues to

Monitor Compliance

With False Claims Act

Guidance
Page 6 GAO-01-506 DOJ False Claims Act

We found that DOJ’s periodic evaluations of the U.S. Attorneys’ Offices

now incorporate a more substantive examination of compliance with the

guidance. The review process, which was instituted in February 1999,

initially contained only one interview question relating to the guidance, but

DOJ has since expanded its evaluation procedure as it relates to the

guidance. By April 2000 the review included a number of questions

devoted to the guidance in both the previsit questionnaires and the

interviews conducted during on-site visits. Respondents must now

describe in detail the activities and procedures each office has in place to

ensure that the attorneys are informed of the guidance and that the office

is in compliance. Of the 16 full evaluations that took place between April

2000 when the evaluation process was expanded and the end of the

calendar year, none resulted in a determination that an office was out of

compliance with the guidance.8

 Through our discussions with DOJ officials

and our review of relevant materials, we were able to verify that the

evaluations provide an effective mechanism for identifying and

documenting areas of concern and potential vulnerability, such as the

need for additional information on the guidance for attorneys. No such

findings were made during reviews of U.S. Attorneys’ Offices currently

participating in a national initiative. U.S. Attorneys’ Offices must respond

to weaknesses identified in the review, and the Executive Office for U.S.

Attorneys subsequently verifies that, if needed, corrective action is taken.

Our review showed that, when weaknesses were identified, this process

was followed and implementation of corrective actions was monitored.

DOJ’s annual requirement that all U.S. Attorneys’ Offices involved in

national civil health care fraud initiatives certify their compliance with the

guidance appears to have promoted compliance at the offices we visited.

DOJ officials told us that all U.S. Attorneys’ Offices participating in civil

health care matters had attested to their compliance for the period ending

December 31, 2000. Although DOJ has not required offices to document

their compliance with the guidance as part of the certification process, the

offices we visited had either documented their compliance in individual

case files or instituted a review process under the direction of their office’s

Civil Chief. For example, every closed case file we reviewed in one office

contained a certification that the case had been conducted in accordance

 8

The evaluations generally take place on a 3-year cycle, with about 31 offices being

reviewed each year. DOJ officials informed us that, due to budget constraints, only 22 full

reviews took place during calendar year 2000.

DOJ Evaluation Process

Now Provides Meaningful

Assessment of Compliance

With the Guidance

U.S. Attorneys’ Offices

Certify Compliance
Page 7 GAO-01-506 DOJ False Claims Act

with the guidance. Based on our review of the supporting documentation

in these case files, we found no basis to dispute the office’s compliance

certifications. Another office directed an attorney not involved in the

national initiatives to review case files for evidence of compliance. The

attorney then prepared a report for the review and approval of the Civil

Chief prior to completing the annual compliance certification. We found

this report provided detailed support for the attorney’s conclusion that the

cases were handled in a manner consistent with the guidance.

Based on our analysis of working group materials and review of case files

at four offices, we believe that DOJ is following its guidance as it pursues

the PPS Transfer and Pneumonia initiatives. The working groups have

prepared material for the U.S. Attorneys’ Offices on the legal and factual

bases for contacting hospitals about potential False Claims Act liability for

each initiative. In addition, the working groups have prepared model

contact letters and other documents to ensure that hospitals are contacted

in a manner consistent with the guidance. The U.S. Attorneys’ Offices we

visited consulted the working group materials and conducted independent

investigations so that their settlement terms could be adjusted to reflect

each hospital’s situation. Although the AHA and some state hospital

association representatives remain concerned that the False Claims Act is

inappropriately being applied to inadvertent billing errors, they did not

identify specific instances where a particular U.S. Attorney’s Office has

acted inconsistently with the guidance in either national initiative.

The working groups prepared extensive initiative-specific guidance and

memoranda outlining the relevant legal and regulatory requirements

underlying the initiatives. After consulting with the HHS-OIG and HCFA,

the working groups analyzed national and hospital-specific claims data.

The U.S. Attorneys’ Offices were then able to use these data as a starting

point to begin investigating whether specific hospitals had knowingly

submitted false claims. The PPS Transfer working group conferred with

the HHS-OIG regarding its prior audits of PPS hospitals. Similarly, the

Pneumonia Upcoding working group obtained extracts of national

inpatient claims data from HCFA and reviewed these data with HCFA

specialists, the HHS-OIG, and an independent consultant to ensure their

validity.

We found that in addition to providing resources and coordinating the

initiatives, the working groups play an active role in monitoring the

progress of the offices participating in the initiatives. We were able to

PPS Transfer and

Pneumonia Upcoding

Initiatives Are Being

Conducted in

Accordance With the

Guidance

Working Groups Provide

Standardized Guidance

and Oversight
Page 8 GAO-01-506 DOJ False Claims Act

verify that participating districts consult with working group members on

an ongoing basis throughout the development and settlement of their

cases. This exchange of information allows the working groups to assess

compliance with the guidance.

Our review of case files at the four offices we visited suggests the

interactions between these offices and the hospitals they investigated

were consistent with the guidance. In reviewing records relating to initial

contacts from the U.S. Attorneys’ Offices and hospitals, the investigations,

and settlements, we observed that the offices were attentive to hospitals’

individual circumstances and that they varied their actions accordingly, as

required by the guidance. For example, our review of correspondence

showed that the contact letters used by these four offices were based on

the model letters distributed by the working groups. Consistent with the

guidance, the letters we reviewed informed hospitals of potential False

Claims Act liabilities but did not make demands for payment and gave

hospitals the opportunity to meet to discuss the matters further.

We found that U.S. Attorneys’ Offices we visited did not pursue hospitals

identified by the working group data as a matter of course. Instead, the

offices conducted their own reviews of each hospital’s billing patterns and

circumstances, as the guidance requires. These efforts sometimes revealed

other explanations for erroneous billing at specific hospitals, and the

hospitals repaid the overpayments with no imposition of damages or

administrative sanctions. For example, one Assistant U.S. Attorney

reviewed the data supplied by the PPS Transfer working group and found

that, while the billing patterns for two hospitals indicated incorrectly

coded cases, they did not necessarily reflect “knowing” behavior, as

defined by the False Claims Act. Without initiating a formal investigation

by sending a contact letter, the office held discussions with management

at both hospitals to solicit possible explanations that might account for

these billing aberrations. These interviews revealed that the hospitals had

not been informed that the facility they were transferring patients to had

changed its payment status. The hospitals thought they were discharging

patients to a rehabilitation facility—in which case they would have been

entitled to receive the full inpatient payment amount—when in fact the

facility had become a PPS hospital and the partial-payment rule applied.

Because the Assistant U.S. Attorney determined that the improper

payments were not knowingly submitted, there was no potential violation

of the False Claims Act and no contact letter was sent.

U.S. Attorneys’ Offices’

Interaction With Hospitals

Is Consistent With the

Guidance
Page 9 GAO-01-506 DOJ False Claims Act

In another instance, a study conducted for a U.S. Attorney’s Office

indicated that the claims data for one hospital reflected improper billing.

The office’s investigation determined that the hospital’s inaccurate coding

was not the result of deliberate action or recklessness on the part of the

hospital, but rather the mistakes of one individual member of the coding

staff. This hospital refunded the excess reimbursements to the Medicare

program and was not assessed damages.

Offices we visited routinely considered unique factors surrounding the

case as well as each hospital’s circumstances during the settlement

process. In one case, an office settled for lower damages because the

hospital had voluntarily disclosed that it had a billing problem. The

hospital’s cost of performing its own audit was deducted from the

settlement amount. In another case, the office reduced its proposed

settlement to reflect the hospital’s cooperation in voluntarily conducting a

self-audit as well as its unique status as the only provider in an area of the

state.

While working groups are not authorized to approve or disapprove

settlement agreements, we found that the U.S. Attorneys’ Offices we

visited kept them informed of the status of cases nearing settlement and

shared proposed settlement agreements with them. For example, one

proposed settlement was accompanied by a detailed analysis documenting

how it was handled in accordance with each element of the guidance. Our

review of closed cases also showed that the working groups were given an

opportunity to comment on the proposed settlement before the

agreements were finalized.

During our review, we contacted representatives from several state

hospital associations and the AHA. Most continued to voice concerns over

the appropriateness of DOJ’s national initiatives. They told us that they

generally believe that the vast majority of overpayments made to hospitals

reflect the complexity of the Medicare billing system and are not an

attempt to defraud the program. Therefore, they suggested that these

matters be handled by fiscal intermediaries9

 without the threat of harsh

penalties.

 9

Fiscal intermediaries are insurance companies that contract with the government to

process and pay Medicare claims submitted by hospitals.

Hospital Association

Representatives Expressed

Concerns With National

Initiatives
Page 10 GAO-01-506 DOJ False Claims Act

Hospital association representatives also raised several concerns. They

questioned the use of national normative claims data to target hospitals on

the basis that this process fails to take into account each hospital’s unique

circumstances—such as patient demographics—which may account for

discrepancies between a hospital’s billing pattern and broader, national

trends. This concern is particularly applicable to the Pneumonia Upcoding

project, in which hospitals are identified for review following a

comparison of hospital and national claims data. While we did not

independently analyze the methods used to prepare the claims data for the

pneumonia project, information on each hospital’s specific billing pattern

for complex pneumonia and the national norm for that diagnosis was

presented in each of the contact letters we saw. During our site visits we

saw evidence that the claims data were used as the starting point for

further investigation.

AHA representatives expressed concern that the data used to select

hospitals for the investigation of allegedly upcoded pneumonia claims

were drawn from a different time period than the period used as the

national norm for comparison purposes. DOJ officials stated that this was

not the case. Furthermore, the claims data that DOJ relied upon were

obtained from the HHS-OIG, and HCFA and an independent claims review

consultant were involved with extracting and analyzing the pneumonia

claims.

In addition, AHA representatives stated that DOJ is engaging in other

projects that have national implications but have not been recognized as

national initiatives. DOJ officials explained that they may have

multidistrict initiatives underway involving subjects under investigation in

multiple jurisdictions, but that these projects do not meet DOJ’s definition

of a national initiative.10 DOJ has instituted written guidelines specifically

addressing the proper coordination of multidistrict investigations, and,

like all civil health care fraud matters, multidistrict initiatives must be

conducted in accordance with the guidance. Our work for this report

involved no assessment of compliance with the guidance in such cases.

Another concern raised by hospital association representatives was that

DOJ often included burdensome corporate integrity agreements in

 10We noted in our February 1999 report that DOJ’s definition of a national initiative is

limited to those multidistrict projects that rely on national claims data.
Page 11 GAO-01-506 DOJ False Claims Act

national initiative settlements at the insistence of the HHS-OIG.11 The

representatives suggested that DOJ’s willingness to accommodate the

HHS-OIG violates the part of the guidance that requires that an individual

provider’s unique circumstances be taken into account when reaching a

settlement. They consider the imposition of corporate integrity

agreements to be particularly troublesome in cases where hospitals settled

for simple repayment without False Claims Act damages and had not

demonstrated serious billing problems. However, at the four U.S.

Attorneys’ Offices we visited, we found that 4 of the 11 closed PPS

Transfer and Pneumonia Upcoding cases we reviewed were resolved

without the imposition of corporate integrity agreements. Although

corporate integrity agreements were imposed in the remaining cases, all of

these cases required repayment of the original overpayment and additional

damages. The HHS-OIG makes an independent decision whether to require

a corporate integrity agreement as part of a settlement; it also has its own

guidance addressing participation in national initiatives.

Representatives from the state hospital associations we contacted did not

have specific complaints regarding the way U.S. Attorneys’ Offices were

conducting either the PPS Transfer or the Pneumonia Upcoding initiatives.

These associations also did not identify instances of U.S. Attorneys’

Offices failing to comply with the guidance. Some associations

acknowledged the willingness of the offices to develop an acceptable

investigative process. In addition, they noted that some Assistant U.S.

Attorneys have developed extensive knowledge about Medicare billing

requirements and provide reasonable opportunities to present their

positions.

We will continue to solicit the concerns of the hospital community

regarding DOJ’s implementation of the False Claims Act guidance when

we prepare our 2002 mandated report.

DOJ seems to have made substantive progress in ensuring compliance

with the False Claims Act guidance. It has strengthened its oversight of

U.S. Attorneys’ Offices. The review of each district’s compliance now

 11A corporate integrity agreement is an obligation imposed on a provider by the HHS-OIG

as part of a settlement of a potential fraud matter. In return, the HHS-OIG agrees not to

seek further administrative penalties against the provider for the behavior in question.

Corporate integrity agreements typically last for 3 years for national initiative cases and

require affirmative steps to improve compliance and report periodically to the HHS-OIG.

Concluding

Observations
Page 12 GAO-01-506 DOJ False Claims Act

appears to be an integral component of the periodic evaluation conducted

at all U.S. Attorneys’ Offices. These evaluations seem to be effective in

identifying areas of vulnerability leading to corrective action taken by the

local district. Further, each U.S. Attorney’s Office participating in a

national initiative is required to certify that it has complied with the

guidance on an annual basis.

DOJ’s implementation of the two most recent initiatives, the PPS Transfer

and Pneumonia Upcoding projects, appears to be consistent with the

guidance, based on our visits to a limited number of offices. Each working

group has taken the lead in developing the legal and factual basis for its

initiative. Their development of detailed claims data and other relevant

materials, such as model contact letters, has helped to promote

consistency among the districts in their implementation of the initiatives.

In our visits to several U.S. Attorneys’ Offices, we found that attorneys

were conducting their investigations in accordance with the guidance.

They coordinated their activities with the working group to ensure

consistency, but took into account the unique factors surrounding each

hospital’s circumstances. This flexibility is in keeping with the principles

outlined in the guidance.

We provided a draft of our report to DOJ for comment. Officials from

DOJ’s Executive Office for U.S. Attorneys and its Civil Division provided

oral comments, in which they generally concurred with our findings and

conclusions. They also provided several technical comments, which we

incorporated as appropriate.

We are sending copies of this report to the Honorable John Ashcroft,

Attorney General of the United States, the Honorable Tommy Thompson,

Secretary of HHS, and other interested parties. We will make copies

available to others upon request.

Agency Comments
Page 13 GAO-01-506 DOJ False Claims Act

If you or your staff have any questions about this report, please call me at

(312) 220-7600, or Geraldine Redican-Bigott at (312) 220-7678. Other major

contributors were Suzanne Rubins and Frank Putallaz.

Leslie G. Aronovitz, Director

Health Care—Program Administration

 and Integrity Issues
Page 14 GAO-01-506 DOJ False Claims Act

List of Committees

The Honorable Orrin G. Hatch

Chairman

The Honorable Patrick J. Leahy

Ranking Member

Committee on the Judiciary

United States Senate

The Honorable Judd Gregg

Chairman

The Honorable Ernest F. Hollings

Ranking Member

Subcommittee on Commerce, Justice, State,

 and the Judiciary

Committee on Appropriations

United States Senate

The Honorable F. James Sensenbrenner, Jr.

Chairman

The Honorable John Conyers, Jr.

Ranking Minority Member

Committee on the Judiciary

House of Representatives

The Honorable Frank R. Wolf

Chairman

The Honorable Jose E. Serrano

Ranking Minority Member

Subcommittee on Commerce, Justice, State,

 the Judiciary and Related Agencies

Committee on Appropriations

House of Representatives
APPENDIX I: GAO Reports Concerning the

Use of the False Claims Act in Civil Health

Care Fraud

Page 15 GAO-01-506 DOJ False Claims Act

Medicare Fraud and Abuse: DOJ Has Made Progress in Implementing

False Claims Act Guidance (GAO/HEHS-00-73, Mar. 31, 2000).

Medicare Fraud and Abuse: DOJ’s Implementation of False Claims Act

Guidance in National Initiatives Varies (GAO/HEHS-99-170, Aug. 6, 1999).

Medicare Fraud and Abuse: Early Status of DOJ’s Compliance With False

Claims Act Guidance (GAO/HEHS-99-42R, Feb. 1, 1999).

Medicare: Concerns With Physicians at Teaching Hospitals (PATH) Audits

(GAO/HEHS-98-174, July 23, 1998).

Letter to the Committee on Ways and Means, B-278893, July 22, 1998.

Medicare: Application of the False Claims Act to Hospital Billing Practices

(GAO/HEHS-98-195, July 10, 1998).

Appendix I: GAO Reports Concerning the

Use of the False Claims Act in Civil Health

Care Fraud

Report Mandated by the

Consolidated

Appropriations Act of 2000

(P.L. 106-113)

Reports Mandated by the

Omnibus Consolidated and

Emergency Supplemental

Appropriations Act of 1999

(P.L. 105-277)

Other Related Reports

(201109)

The first copy of each GAO report is free. Additional copies of reports are

$2 each. A check or money order should be made out to the

Superintendent of Documents. VISA and MasterCard credit cards are also

accepted.

Orders for 100 or more copies to be mailed to a single address are

discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

Orders by visiting:

Room 1100

700 4th St., NW (corner of 4th and G Sts. NW)

Washington, DC 20013

Orders by phone:

(202) 512-6000

fax: (202) 512-6061

TDD (202) 512-2537

Each day, GAO issues a list of newly available reports and testimony. To

receive facsimile copies of the daily list or any list from the past 30 days,

please call (202) 512-6000 using a touchtone phone. A recorded menu will

provide information on how to obtain these lists.

Orders by Internet

For information on how to access GAO reports on the Internet, send an email message with “info” in the body to:

Info@www.gao.gov

or visit GAO’s World Wide Web home page at:

http://www.gao.gov

Contact one:

• Web site: http://www.gao.gov/fraudnet/fraudnet.htm

• E-mail: fraudnet@gao.gov

• 1-800-424-5454 (automated answering system)

Ordering Information

To Report Fraud,

Waste, and Abuse in

Federal Programs