HEALTH CARE 

FRAUD

Types of Providers 

Involved in Medicare, 

Medicaid, and the 

Children’s Health 

Insurance Program 

Cases

Report to Congressional Requesters

September 2012

GAO-12-820

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United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-820, a report to 

congressional requesters

September 2012

HEALTH CARE FRAUD

Types of Providers Involved in Medicare, Medicaid, 

and the Children’s Health Insurance Program Cases

Why GAO Did This Study

GAO has designated Medicare and 

Medicaid—which are administered by 

the Centers for Medicare & Medicaid 

Services (CMS), an agency of HHS—

as high-risk programs partly because 

their size and complexity make them 

vulnerable to fraud. Several federal 

agencies conduct health care fraud 

investigations and related activities, 

including HHS-OIG and DOJ’s Civil 

Division, and the 93 U.S. Attorney’s 

Offices (USAO). In fiscal year 2011, 

the federal government devoted at 

least $608 million to conduct such 

activities. Additionally, state MFCUs 

investigate health care fraud in their 

state’s Medicaid and CHIP programs.

GAO was asked to provide information 

on the types of providers that are the 

subjects of fraud cases. This report 

identifies provider types who were 

the subjects of fraud cases in 

(1) Medicare, Medicaid, and CHIP 

that were handled by federal agencies, 

and changes in the types of providers 

in 2005 and 2010; and (2) Medicaid 

and CHIP fraud cases that were 

handled by MFCUs. To identify 

subjects of fraud cases handled by 

federal agencies, GAO combined data 

from three agency databases—HHSOIG, USAOs, and DOJ’s Civil 

Division—and removed duplicate 

subject data. GAO also reviewed 

public court records, such as 

indictments, to identify subjects’ 

provider types because the USAOs 

and DOJ Civil Division data did not 

consistently include provider type. To 

describe providers involved in fraud 

cases handled by the MFCUs, GAO 

collected aggregate data from 10 state 

MFCUs, which represented the 

majority of fraud investigations, 

indictments, and convictions 

nationwide.

What GAO Found

According to 2010 data from the Department of Health and Human Services’ 

Office of the Inspector General (HHS-OIG) and the Department of Justice (DOJ), 

10,187 subjects—individuals and entities involved in fraud cases—were 

investigated for health care fraud, including fraud in Medicare, Medicaid, and the 

Children’s Health Insurance Program (CHIP). These subjects included different 

types of providers and suppliers—such as physicians, hospitals, durable medical 

equipment suppliers, home health agencies, and pharmacies—that serve 

Medicare, Medicaid, and CHIP beneficiaries. For criminal cases in 2010, medical 

facilities—including medical centers, clinics, or practices—and durable medical 

equipment suppliers were the most-frequent subjects investigated. Hospitals and 

medical facilities were the most-frequent subjects investigated in civil fraud 

cases, including cases that resulted in judgments or settlements.

• Subjects of criminal cases: Many of the 7,848 criminal subjects in 2010 

were medical facilities or durable medical equipment suppliers, representing 

about 40 percent of subjects of criminal cases. Similarly, in 2005, medical 

facilities and durable medical equipment suppliers accounted for 41 percent 

of criminal case subjects. Data from 2010 show that most of the subjects 

were in cases that were not referred by HHS-OIG to DOJ for prosecution 

(85 percent). Of the subjects whose cases were pursued, most were found 

guilty or pled guilty or no contest. 

• Subjects of civil cases: Over one-third of the 2,339 subjects of civil cases in 

2010 were hospitals and medical facilities. In 2010, about 35 percent more 

subjects were investigated in civil fraud cases than in 2005. Nearly half of the 

subjects of 2010 cases were pursued. Among the subjects whose cases 

were pursued, 55 percent resulted in judgments or settlements. 

Additionally, data from HHS-OIG show that nearly 2,200 individuals and entities 

were excluded from program participation for health care fraud convictions and 

other reasons, including license revocation and program-related convictions. 

About 60 percent of those individuals and entities excluded were in the nursing 

profession. Pharmacies or individuals affiliated with pharmacies were the nextlargest provider type excluded, representing about 7 percent of those excluded. 

According to data GAO collected from 10 state Medicaid Fraud Control Units 

(MFCU), over 40 percent of the 2,742 subjects investigated for health care fraud 

in Medicaid and CHIP in 2010 were home health care providers and health care 

practitioners. Of the criminal cases pursued by these MFCUs, home health care 

providers comprised nearly 40 percent of criminal convictions and 45 percent of 

subjects sentenced in 2010. Civil health care fraud cases pursued by these 

MFCUs in 2010 resulted in judgments and settlements totaling nearly 

$829 million. Pharmaceutical manufacturers were to pay more than 

60 percent ($509 million) of the total amount of civil judgments and settlements.

GAO provided a draft of the report to DOJ and HHS. DOJ provided technical 

comments, which have been incorporated as appropriate. View GAO-12-820. For more information, 

contact Kathleen M. King at (202) 512-7114 or 

kingk@gao.gov.
Page i GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Letter 1 

Background 7

Medical Facilities Were the Most Frequent Subjects of Criminal 

Investigations, and Hospitals Were the Most Frequent Subjects 

of Civil Investigations 12

Home Health Providers Were the Largest Percentage of Criminal 

Convictions for MFCUs, and Pharmaceutical Manufacturers 

Were Ordered to Pay the Most in Civil Cases 33

Agency Comments 40

Appendix I Methodology for Analyzing Data Obtained from the Federal 

Agencies 42

Appendix II Methodology for Selecting State Medicaid Fraud Control Units 

and Analyzing Submitted Data 47

Appendix III GAO Contact and Staff Acknowledgments 51

Tables

Table 1: Agencies, Divisions, and Their Roles in Health Care Fraud 

Investigation and Prosecution 8

Table 2: Number of Subjects Investigated in Health Care Fraud 

Cases, by Agency, 2010 13

Table 3: Number and Percentage of Subjects of Health Care Fraud 

Cases Referred to HHS-OIG, by Source of Referral, 2010 14

Table 4: Number and Percentage of Subjects in Criminal Health 

Care Fraud Investigations, by Provider Type, 2010 16

Table 5: Number and Percentage of Subjects in Criminal Health 

Care Fraud Investigations, by Entity or Individual Provider 

Type, 2010 18

Table 6: Number and Percentage of Subjects Investigated in 

Criminal Health Care Fraud Cases, by Outcome of Case, 

2010 20

Table 7: Number and Percentage of Health Care Fraud Subjects 

That Were Found Guilty or Pled Guilty or No Contest, by 

Provider Type, 2010 22

Contents
Page ii GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 8: Number and Percentage of Civil Health Care Fraud Case 

Subjects Investigated, by Provider Type, 2010 25

Table 9: Number and Percentage of Civil Health Care Fraud Case 

Subjects Investigated, by Entity or Individual Provider 

Type, 2010 27

Table 10: Number and Percentage of Subjects in Civil Health Care 

Fraud Cases, by Outcome of Case, 2010 28

Table 11: Number and Percentage of Subjects in Civil Health Care 

Fraud Cases with Judgment for Government or Relator, or 

Settlement, or Both, by Provider Type, 2010 30

Table 12: Number of Individuals and Entities Excluded from 

Program Participation, by Provider Type, 2010 32

Table 13: Number of Exclusions from Program Participation by 

Reason, 2010 33

Table 14: Number of Subjects of Health Care Fraud Referred to 10 

Medicaid Fraud Control Units (MFCU) for Investigation, 

by Provider Type, 2005 and 2010 35

Table 15: Outcomes for Subjects of Criminal Health Care Fraud 

Cases Handled by 10 Medicaid Fraud Control Units 

(MFCU), by Provider Type, 2010 37

Table 16: Criminal Case Sentencing Outcomes for Subjects of 

Health Care Fraud Cases Handled by 10 Medicaid Fraud 

Control Units (MFCU), by Provider Type, 2010 38

Table 17: Civil Judgments or Settlements for Subjects of Health 

Care Fraud Cases Handled by 10 Medicaid Fraud Control 

Units (MFCU) by Provider Type, 2005 and 2010 40

Table 18: Categories of Provider Types Developed for Analysis of 

Health Care Fraud Case Subjects 45

Table 19: Information about Health Care Fraud Handled by 10 State 

Medicaid Fraud Control Units (MFCU), Fiscal Year 2010 48

Table 20: Categories of Provider Types Used in Data Collection 

Instrument Sent to State Medicaid Fraud Control Units for 

Analysis of Health Care Fraud Case Subjects 49
Page iii GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Abbreviations

CHIP Children’s Health Insurance Program

CMS Centers for Medicare & Medicaid Services

DOJ Department of Justice

EOUSA Executive Office of U.S. Attorneys

FCA False Claims Act

FBI Federal Bureau of Investigation 

HHS Department of Health and Human Services 

HHS-OIG Department of Health and Human Services’ Office of

 Inspector General

MFCU Medicaid Fraud Control Unit

PACER Public Access to Court Electronic Records

PPACA Patient Protection and Affordable Care Act

USAO U.S. Attorney’s Office

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

United States Government Accountability Office

Washington, DC 20548

September 7, 2012

The Honorable Harry Reid

Majority Leader

United States Senate

The Honorable Max Baucus

Chairman

Committee on Finance

United States Senate

The Honorable Tom Harkin

Chairman

Committee on Health, Education, Labor, and Pensions

United States Senate

In fiscal year 2011, 48.4 million individuals were enrolled in Medicare; 

55.6 million in Medicaid; and 8.7 million in the Children’s Health Insurance 

Program (CHIP).1 Together, these programs accounted for approximately 

$849.2 billion in federal expenditures.2 The federal government allocated 

at least $608 million in funding to investigate and prosecute cases of 

alleged health care fraud in health care programs that year.3

 

1

The Centers for Medicare & Medicaid Services (CMS)—an agency within the Department 

of Health and Human Services (HHS)—oversees Medicare, Medicaid, and CHIP. 

Medicare is the federal health insurance program for persons aged 65 or over, certain 

disabled individuals, and individuals with end-stage renal disease. Medicaid and CHIP are 

joint federal-state programs that finance health insurance coverage for certain categories 

of low-income adults and children.

Many 

different types of providers and suppliers who serve Medicare, Medicaid, 

2

In fiscal year 2011, Medicare expenditures totaled approximately $565.6 billion; federal 

Medicaid expenditures were nearly $275 billion; and federal expenditures for CHIP were

about $8.6 billion.

3

Fraud involves an intentional act or representation to deceive with the knowledge that the 

action or representation could result in gain. The Health Care Fraud and Abuse Control 

Program received just over $608 million in fiscal year 2011. See Department of Health and 

Human Services and Department of Justice, Health Care Fraud and Abuse Control 

Program Annual Report for Fiscal Year 2011: February 2012. The program, which is 

under the joint direction of the Attorney General and the Secretary of HHS, is designed to 

coordinate federal, state, and local law enforcement activities with respect to health care 

fraud and abuse. Additional funds to combat health care fraud spent by HHS and the 

Department of Justice (DOJ) are not included in this figure.

 
 

Page 2 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

and CHIP beneficiaries are subjects of fraud cases, including physicians, 

hospitals, durable medical equipment suppliers, home health agencies, 

and pharmacies.4 Because their size and complexity make them 

vulnerable to fraud, we have designated Medicare and Medicaid as highrisk programs.5

The Centers for Medicare & Medicaid Services (CMS)—an agency within 

the Department of Health and Human Services (HHS) that oversees 

Medicare, Medicaid, and CHIP—along with HHS-OIG, and the 

Department of Justice (DOJ)—including the Federal Bureau of 

Investigation (FBI)—work together to investigate and prosecute alleged 

fraud in Medicare, Medicaid, and CHIP. For example, CMS, HHS-OIG, 

and DOJ officials comprise Medicare Strike Force teams, which are 

designed to use data analysis techniques to identify and stop Medicare 

fraud. Additionally, these agencies coordinate with state Medicaid Fraud 

Control Units (MFCU), which are primarily responsible for investigating 

and prosecuting fraud within their state Medicaid programs.

According to the Department of Health and Human 

Services’ Office of Inspector General (HHS-OIG), common health care 

fraud schemes include providers or suppliers billing for services or 

supplies not provided or not medically necessary, purposely billing for a 

higher level of service than that provided, misreporting data to increase 

payments, paying kickbacks to providers for referring beneficiaries for 

specific services or to certain entities, and stealing providers’ or 

beneficiaries’ identities.

HHS-OIG, FBI, and MFCUs receive referrals of alleged fraud from a 

variety of sources, including program beneficiaries, state agencies, law 

enforcement, and whistleblowers. CMS and its contractors report alleged 

fraud cases to HHS-OIG for investigation. HHS-OIG typically refers 

investigations of the alleged fraud cases that it believes have merit to 

DOJ for civil litigation or criminal prosecution because it does not have 

the authority to prosecute health care fraud cases. MFCUs—which are 

generally located in the state offices of the Attorney General—investigate 

and typically prosecute health care fraud cases under state laws. 

Additionally, MFCUs coordinate with HHS-OIG and DOJ on certain fraud 

 

4

Subjects of health care fraud cases can be individuals, such as a dentist or a nurse; an 

organization, such as a pharmaceutical manufacturer; or a facility, such as a hospital.

5

See GAO, High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 

2011).
 

Page 3 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

cases. DOJ and its divisions may also receive referrals of alleged fraud 

through civil cases filed by individuals under the False Claims Act (FCA). 

The outcomes of health care fraud cases can include civil and criminal 

penalties.6 Civil penalties include monetary settlements, and criminal 

penalties include incarceration sentences, fines, and restitution. HHS-OIG 

also can impose administrative penalties on providers—including 

imposing a civil monetary penalty, or excluding a provider from 

participating in federal health care programs. In fiscal year 2011, the 

federal government won or negotiated approximately $2.4 billion in 

judgments and settlements related to health care fraud.7

Concerns have been raised about the need to better detect and combat 

fraud in federal health care programs, such as Medicare, Medicaid, and 

CHIP. Some of these concerns have specifically focused on determining 

whether resources to fight fraud are being targeted toward the types of 

health care providers committing the most fraud. This report provides 

information on individuals or entities involved in health care fraud cases in 

Medicare, Medicaid, and CHIP. These individuals and entities are 

generally referred to as “subjects” of health care fraud cases. In this 

report, we identify: (1) subjects of health care fraud cases by provider 

type involving Medicare, Medicaid, or CHIP that were handled by federal 

agencies, and changes in the types of providers in 2005 and 2010; and 

(2) subjects of health care fraud cases by provider type for those cases 

involving Medicaid or CHIP that were handled by MFCUs, and changes in 

the types of providers investigated in fraud cases in 2005 and 2010.

To identify subjects of health care fraud cases—including referrals, 

investigations, prosecutions, and outcomes—by provider type for cases 

involving Medicare, Medicaid, or CHIP that were handled by federal 

agencies, and to examine changes in the types of provider in 2005 and 

2010, we obtained data on closed health care fraud cases from HHSOIG, DOJ’s Civil Division, and the Executive Office of U.S. Attorneys 

 

6

In this report, we use the term outcome to refer to the disposition of civil and criminal 

cases, which can include, among other things, convictions, monetary penalties, 

dismissals, and the decision not to pursue investigation or prosecution.

7

We have previously reported that although there have been convictions for multimillion 

dollar schemes that defrauded the Medicare program, the extent of the problem is 

unknown. There are no reliable estimates of the extent of fraud in the Medicare program 

or for the health care industry as a whole. See GAO, Medicare: Progress Made to Deter 

Fraud, but More Could Be Done, GAO-12-801T (Washington, D.C.: June 8, 2012).
 

Page 4 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

(EOUSA), which provides administrative support for the 94 U.S. 

Attorney’s Offices (USAO).8 We obtained data on fraud cases involving 

Medicare, Medicaid, and CHIP—including any cases that were closed in 

calendar years 2005 and 2010.9 However, due to limitations with some of 

the 2005 data, our analysis of the changes in the types of providers in

2005 and 2010 is limited. Each fraud case can have more than one 

subject, and our analysis focuses on the subjects of the fraud cases 

rather than the cases themselves. Additionally, a fraud subject can be 

either an entity itself or an individual affiliated with an entity.10

 

8

The USAOs are a division within DOJ that litigates both civil and criminal health care 

fraud cases in their districts throughout the country. Although the Federal Bureau of 

Investigation (FBI) investigates health care fraud and DOJ’s Criminal Division prosecutes 

health care fraud, we did not obtain data from them because officials told us that the FBI 

and DOJ’s Criminal Division primarily work on health care fraud cases jointly with the 

HHS-OIG or USAOs. Officials indicated that the vast majority of health care fraud cases 

handled by FBI and DOJ’s Criminal Division would be entered in databases used either by 

HHS-OIG or USAOs. As a result, we did not request data from DOJ’s Criminal Division or 

the FBI.

The data 

we received from HHS-OIG pertained only to health care fraud in 

Medicare, Medicaid, and CHIP; however, data we received from the 

USAOs and DOJ’s Civil Division may also include other federal health 

care program fraud as well as fraud in the private sector as the databases 

used to track fraud cases do not capture fraud exclusively in Medicare, 

Medicaid, and CHIP. Since many fraud cases are handled jointly by HHSOIG, USAOs, and DOJ’s Civil Division (and entered into each agency’s 

own database), we identified fraud case subjects that were in more than 

one data set we received by comparing subject information to the extent 

9

We chose calendar year 2010 since HHS-OIG and DOJ and its divisions received 

additional funding for health care fraud activities in fiscal year 2010 and it was the mostrecent complete year of data available at the time of our request. We chose calendar year 

2005 to compare data we received for 2010 because this was before the Deficit Reduction 

Act was enacted, which increased funding for antifraud activities. We use the term “cases” 

throughout this report to refer to any suspected fraud information that was received by 

HHS-OIG, USAOs, or DOJ’s Civil Division regardless of whether the case was formally 

investigated or prosecuted. Additionally, we refer to any cases received by HHS-OIG as 

investigations regardless of the level of resources expended on the case.

10For example, the subject of a fraud case could be a durable medical equipment supplier 

because the company billed for equipment that it did not provide, or could be an individual 

affiliated with the entity, such as an employee of a durable medical equipment supplier

that billed for equipment not prescribed by a physician. In both of these examples, the 

entity involved is the durable medical equipment supplier, but in the first example the 

subject is the entity itself while in the second example the subject is an individual affiliated 

with the durable medical equipment supplier. In our analysis, we refer to subjects of fraud 

cases as the entities they are or the entities with which the individuals are affiliated.
 

Page 5 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

possible. However, it is possible that our analysis still includes some 

duplication in fraud case subjects. With the exception of one analysis at 

the agency level, we excluded duplicate data so that each subject was 

only included once. The data we received from HHS-OIG contained 

information on the provider type of the subject; provider type is not a 

required field in the USAOs database, consequently, the USAOs do not 

consistently have provider type information, and DOJ’s Civil Division does 

not collect data by provider type. In order to identify the provider type of 

subjects in the USAO and DOJ Civil Division data that were missing 

information, it was necessary for us to conduct an extensive search of 

publicly available court records to identify the provider type for 2,470 

subjects. We searched for the subjects in the Public Access to Court 

Electronic Records (PACER) database and reviewed indictments, plea 

agreements, and other court documents to obtain information on the 

subject’s provider type. After we identified the provider types for data we 

received from USAOs and DOJ’s Civil Division and after reviewing the 

data on provider types in the HHS-OIG data, we aggregated the various 

provider types into broad categories, which are described in appendix I. 

We also reviewed agency documents and conducted interviews with 

officials from HHS-OIG and DOJ—including the Civil and Criminal 

Divisions, FBI, and EOUSA—to obtain information about health care 

fraud cases and the databases used to track these cases. To assess the 

reliability of the data, we interviewed officials from these agencies to 

discuss the quality of the data we obtained, reviewed relevant 

documentation, and examined the data for reasonableness and internal 

consistency. We found these data were sufficiently reliable for the 

purposes of our report (see app. I for additional information about our 

methodology).

To identify subjects of health care fraud cases by provider type for those 

cases involving Medicaid or CHIP that were handled by state MFCUs, 

and to examine changes in the types of providers investigated and 

prosecuted for fraud in 2005 and 2010, we collected aggregate data on 

closed fraud cases from 10 state MFCUs for 2005 and 2010. These 

MFCUs were selected because, collectively, they accounted for the 

majority of open fraud investigations, fraud indictments or charges, fraud 

convictions, amounts recovered from civil settlements and judgments, 

MFCU grant expenditures, and number of MFCU staff in fiscal year 
 

Page 6 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

2010.11 The 10 selected MFCUs were in California, Florida, Illinois, 

Indiana, Louisiana, Massachusetts, New York, Ohio, Texas, and 

Virginia.12 We developed a standardized data-collection instrument based 

on the HHS-OIG’s Quarterly Statistical MFCU Report Template and 

accompanying definitions. We received feedback on a draft of the datacollection instrument from officials from two MFCUs before finalizing it.

Although the data we received from the 10 MFCUs represent a majority of 

fraud cases handled by all MFCUs nationwide, the data are not 

generalizable to other states. The data we received represented actions 

related to fraud cases that occurred only in the years we requested.13

 

11Nationwide, in fiscal year 2010 the selected state MFCUs accounted for 54.8 percent of 

open fraud investigations; 60.1 percent of fraud indictments and charges; 62.8 percent of 

fraud convictions; 40.6 percent of civil settlements and judgments; 66.0 percent of MFCU 

grant expenditures; and 64.1 percent of MFCU staff.

Each instance of fraud in the data submitted by the 10 MFCUs represents 

one individual, facility, or organization that we refer to as the subject of 

the fraud case. Fraud case subjects may be an individual, such as a 

dentist or a nurse; an organization, such as a pharmaceutical 

manufacturer; or a facility, such as a hospital. Several subjects may be 

investigated in one fraud case; however, each subject in a fraud case is 

counted separately. Additionally, for our analysis, we aggregated various 

provider types into broad categories, which are described in appendix II. 

Because the state MFCUs may work together on certain cases that cross 

state lines, it is possible that duplicate data are included in our analysis. 

We also conducted interviews with officials from CMS, the HHS-OIG’s 

Office of Evaluations and Inspections, and the National Association of 

MFCUs to obtain information on fraud cases handled by the MFCUs. We 

relied on the data as reported by the 10 MFCUs and did not 

independently verify these data. However, we reviewed the data for 

reasonableness and followed up with state officials for clarification when 

necessary. On the basis of these activities, we determined these data 

12We did not receive complete CHIP fraud data from Florida, New York, and Texas 

because the MFCUs in these states do not investigate fraud in CHIP. In the other seven 

states, data on CHIP fraud were included.

13We requested data from the state MFCUs for any actions—such as indictments, 

convictions, or penalties—that occurred on a subject’s fraud case in 2005 or 2010. For 

example, if a subject was indicted in 2004 and sentenced in 2005, the MFCU data would 

only include information about the subject’s sentencing in 2005, because the indictment 

occurred in a year outside of our data request. 
 

Page 7 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

were sufficiently reliable for the purpose of our report (see app. II for 

additional information).

We conducted this performance audit from June 2011 to September 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for any findings and 

conclusions based on our audit objectives.

Medicare, Medicaid, and CHIP beneficiaries receive health care from a 

variety of providers and in different settings. When suspected cases of 

fraud emerge, many agencies are involved in investigating and 

prosecuting these cases and they rely on multiple statutes. 

Medicare, Medicaid, and CHIP beneficiaries receive health care from a 

variety of providers—including physicians, nurses, dentists, and other 

medical professionals—in many different settings, such as hospitals, 

medical practices, clinics, and health centers. Additionally, beneficiaries 

may receive care and assistance from home health agencies and aides, 

durable medical equipment suppliers, and medical transportation 

companies. In 2010, about $478 billion in federal Medicare, Medicaid, and 

CHIP spending was attributable to hospital care (41.3 percent of total 

spending) and physician and clinical services (18.3 percent of total 

spending) based on National Health Expenditure Account data from CMS. 

Expenditures for prescription drugs accounted for 9.3 percent of spending 

in these programs, and nursing home care accounted for 7.8 percent. 

Many other categories of providers accounted for the remaining 

23.4 percent.

Several agencies are involved in investigating and prosecuting health 

care fraud cases, including the HHS-OIG; DOJ’s Civil and Criminal 

divisions; the 94 USAOs; the FBI; and state MFCUs. The HHS-OIG and 

FBI primarily conduct investigations of health care fraud, and DOJ’s 

Background 

Medicare, Medicaid, and 

CHIP Health Care 

Providers

Agencies That Investigate 

and Prosecute Health Care 

Fraud
 

Page 8 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

divisions typically prosecute or litigate those cases.14

Table 1: Agencies, Divisions, and Their Roles in Health Care Fraud Investigation and Prosecution

See table 1 for 

additional information about the role of each agency in fraud 

investigations and prosecutions.

Agency Division Role in investigating and prosecuting health care fraud 

Department of 

Health and Human 

Services’ Office of 

Inspector General 

(HHS-OIG) 

Office of Investigations Responsible for conducting and coordinating investigations into allegations of 

fraud in HHS programs, including Medicare, Medicaid, and CHIP. They are 

also responsible for certain exclusions of providers from participating in 

federal health care programs.

HHS-OIG investigators also play an active role in the Medicare Strike Force 

teams—which are teams comprising staff from federal, state, and local 

investigation agencies, designed to combat Medicare fraud by using dataanalysis techniques—located in nine cities nationwide.

Office of Counsel to the Inspector 

General

Has the authority to impose administrative penalties related to health care 

fraud, including civil monetary penalties.

Department of 

Justice (DOJ)

a Criminal Division Prosecutes criminal health care fraud. DOJ’s Criminal Division also plays an 

active role in the Medicare Strike Force teams.

Civil Division Represents the U.S. government in civil matters, such as cases brought 

against pharmaceutical manufacturers for marketing prescription drugs for 

uses other than what have been approved. DOJ’s Civil Division also has the 

authority to bring criminal charges against pharmaceutical and medical device 

manufacturers for, among other things, unlawful off-label marketing under the 

Federal Food, Drug, and Cosmetic Act. 

U.S. Attorney’s Offices (USAO) Litigate or prosecute civil and criminal health care fraud cases in their 

districts—94 USAOs throughout the country. The USAOs in the nine cities 

where Medicare Strike Force teams are located also participate in those 

teams.

Federal Bureau of Investigation 

(FBI) 

Investigates health care fraud through coordinated initiatives with federal, 

state, and local agencies. The FBI also participates in task forces, and 

undercover operations to identify health care fraud, as well as the Medicare 

Strike Force teams.

Medicaid Fraud 

Control Unit 

(MFCU)

Each state and the District of 

Columbia has its own MFCUb Investigate and typically prosecute civil and criminal health care fraud in the 

state’s Medicaid program. The MFCUs also investigate cases of patient 

abuse and neglect. Although MFCUs typically work on Medicaid fraud cases, 

they may obtain permission from HHS-OIG to investigate fraud in Medicare.

MFCUs are required to be separate and distinct from the state Medicaid 

agencies and receive state and federal Medicaid funds. 

Source: GAO analysis of information from the HHS-OIG, DOJ and its divisions, and MFCUs.

 

14CMS and its contractors also conduct activities related to health care fraud. For 

example, CMS oversees the work of Zone Program Integrity Contractors, which are 

responsible for investigating potential fraud in Medicare fee-for-service in their assigned 

geographic area. These contractors identify suspect claims and provider billing patterns, 

investigate fraud leads, and refer suspected fraud cases to HHS-OIG.
 

Page 9 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

a

DOJ’s Civil Rights Division may also conduct activities related to health care fraud though they 

investigate conditions of confinement at state and local residential institutions.

b

North Dakota received a waiver from the federal government and does not operate a MFCU.

These agencies often work together to investigate and prosecute health 

care fraud cases. For example, HHS-OIG may open a fraud case, work 

with the FBI during the investigation, and then refer the case to a USAO 

for prosecution. Additionally, HHS-OIG, the FBI, a USAO, and DOJ’s 

Criminal Division work jointly on health care fraud cases handled by 

Medicare Strike Force teams. Health care fraud cases are opened by the 

agencies either when they receive information about suspected fraudulent 

activity from a source—which can include program beneficiaries and CMS 

and its contractors—or if they proactively identify possible fraudulent 

behavior through data analysis. Additionally, in civil cases known as qui 

tam cases, individuals—referred to as relators—with evidence of fraud 

can file a civil suit under the False Claims Act (FCA).15 These qui tam 

cases are handled by a USAO or DOJ’s Civil Division, though they may 

receive assistance in the investigation from HHS-OIG or the FBI. In other 

fraud cases, if a fraud case is opened by HHS-OIG, the agency typically 

conducts its investigation, determines whether the case has merit, and 

refers the case to DOJ for criminal prosecution or civil litigation. 

Alternatively, HHS-OIG may find that the case does not have merit and 

may close the case. HHS-OIG also has authority to impose civil monetary 

penalties or exclude the provider from participating in federal health care 

programs.16

 

15The False Claims Act (FCA) prohibits certain actions, including the knowing presentation 

of a false claim for payment by the federal government. 31 U.S.C. § 3729(a)(1)(A). FCA 

claims may be brought by private persons—“relators” or “whistleblowers”—in the name of 

the government, alleging the submission of false claims. A qui tam case is a civil action 

brought by the relator for the person and for the government though the action is in the 

name of the government. In these qui tam cases, the relator can receive a portion of a 

monetary settlement, and reasonable expenses and attorneys’ fees and costs. 31 U.S.C. 

§ 3730(b),(d).

Similarly, DOJ’s divisions may choose not to pursue a fraud 

case for a number of reasons, including a lack of evidence or insufficient 

16Providers and individuals can be excluded for a variety of reasons other than for a 

health care fraud conviction, including licensure suspension, surrender, or revocation, 

patient abuse/neglect conviction, or felony controlled substance conviction. Under 

section 1128 of the Social Security Act, exclusions from federal health programs are 

mandatory under certain circumstances and permissive in others. 42 U.S.C. § 1320a-7.
 

Page 10 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

evidence to support the charges, or a lack of resources for investigation 

or prosecution.17

MFCUs investigate and typically prosecute health care fraud cases in the 

state’s Medicaid program under state laws, and frequently coordinate with 

HHS-OIG and DOJ on the investigation and prosecution of certain fraud 

cases. Many MFCUs have authority to prosecute cases of fraud, but not 

all MFCUs are able to do so and refer cases to other agencies for 

prosecution. For example, Texas’ MFCU does not have the authority to 

prosecute cases and refers cases to another agency or office, such as 

the U.S. Attorney’s Office or the state’s District Attorney, for prosecution.

Several statutes concern health care fraud.18

• Civil monetary penalty provisions of the Social Security Act are 

applicable to certain enumerated activities, such as knowingly 

presenting a claim for medical services that is known to be false and 

fraudulent.

These statutes include the 

following:

19 The Social Security Act also provides for criminal 

penalties for knowing and willful false statements in applications for 

payment.20 In addition, providers may be excluded on a mandatory or 

permissive basis from participating in federal health care programs for 

engaging in certain fraudulent activities.

• The Anti-Kickback statute makes it a criminal offense for anyone to 

knowingly and willfully solicit, receive, offer, or pay any remuneration 

in return for or to induce referrals of items or services reimbursable 

under a federal health care program, subject to statutory exceptions 

and regulatory safe harbors.21

 

17DOJ has to review and decide whether to intervene in qui tam cases within a statutorily 

specified amount of time.

For example, a payment program 

18The statutes included here provide examples of those that may be relevant to health 

care fraud cases. Other statutory provisions, including those located in title 18 of the 

United States Code, may also be relevant to such cases. See, e.g., 18 U.S.C. §§ 669 

(concerning theft or embezzlement in connection with health care ), 1035 (concerning 

false statements relating to health care matters), and 1347 (concerning health care fraud).

1942 U.S.C. § 1320a-7a.

2042 U.S.C. § 1320a-7b.

2142 U.S.C. § 1320a-7b(b). 

Fraud Statutes and 

Outcomes
 

Page 11 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

under which a hospital paid physicians who referred patients for 

admission would implicate the anti-kickback statute.

• The Stark law and its implementing regulations prohibit physicians 

from making “self-referrals”—certain referrals for “designated health 

services” paid for by Medicare22 to entities with which the physician 

(or immediate family) has a financial relationship. The Stark law also 

prohibits these entities that perform the “designated health services” 

from presenting claims to Medicare or billing for these services.23

• The Federal Food, Drug, and Cosmetic Act makes it unlawful to, 

among other things, introduce an adulterated or misbranded 

pharmaceutical product or device into interstate commerce.24

• The False Claims Act (FCA) is often used by the federal government 

in health care fraud cases.25 The FCA prohibits certain actions, 

including the knowing presentation of a false claim for payment by the 

federal government. Claims that are submitted in violation of certain 

other statutes may also be considered false claims and, as a result, 

create additional liability under the FCA. Many health care fraud cases 

pursued under the FCA are for billing for goods or services not 

rendered, billing for unnecessary health care goods or services, or 

billing for goods or services at a higher rate than what was provided. 

Under the FCA, civil cases can be brought by the U.S. government or 

by a private citizen.

The outcome of a fraud case can depend on whether the case is civil or 

criminal, and if the case is prosecuted or litigated, the penalties 

authorized under the relevant statutes. For example, civil cases that are 

litigated may result in judgments imposed by a court or settlements 

reached by the subjects and litigators of the fraud case. In criminal cases, 

outcomes can include incarceration, probation, and fines. HHS-OIG may 

also impose civil monetary penalties on providers for committing fraud, 

and may exclude providers from participating in federal health care 

 

22The Social Security Act prohibits payments to states for Medicaid services that would be 

prohibited by Medicare under the Stark law. 42 U.S.C. § 1396b(s).

2342 U.S.C. § 1395nn(a)(1).

2421 U.S.C. § 331(a).

2531 U.S.C. §§ 3729-3733.
 

Page 12 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

programs. In some cases, a subject may receive both civil and criminal 

penalties, and be excluded.

According to 2010 data, 10,187 subjects were investigated for health care 

fraud. Medical facilities (such as medical centers, clinics, and medical 

practices) and durable medical equipment suppliers were the most 

frequent subjects of criminal fraud cases in 2010. Hospitals and medical 

facilities were the most frequent subjects of civil fraud cases, including 

cases that resulted in judgments or settlements. Nearly 2,200 individuals 

were excluded from program participation by HHS-OIG, about 60 percent 

of whom were in the nursing profession.

According to 2010 data, 10,187 subjects were investigated for health care 

fraud—of which, 7,848 were subjects of criminal fraud cases, and 2,339 

were subjects of civil fraud cases. Data from 2010 shows that HHS-OIG 

investigated health care fraud cases for nearly 8,900 subjects, many 

more than were opened by the USAOs and DOJ’s Civil Division.26 Table 2 

contains information on health care fraud subjects by agency, reflecting 

the work of each agency in 2010. To fully reflect the work of each agency, 

data on subjects that were included in more than one agency database 

were included in the top portion of the table. The duplicate cases were 

removed to arrive at the unique count of subjects and were not included 

in our other analyses. Data comparing cases handled in 2005 and 2010 

show that HHS-OIG investigated cases for nearly 2,800 more subjects in 

2010 than it did in 2005, while the USAOs and DOJ’s Civil Division 

handled cases for approximately the same number of subjects.

 

26As previously mentioned, each fraud case can have more than one subject involved. 

According to 2010 data, there were 4,709 criminal cases and 1,024 civil cases. 

Medical Facilities 

Were the Most 

Frequent Subjects of 

Criminal 

Investigations, and 

Hospitals Were the 

Most Frequent 

Subjects of Civil 

Investigations 

Approximately 10,200 

Subjects Were Investigated 

for Health Care Fraud in 

2010
 

Page 13 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 2: Number of Subjects Investigated in Health Care Fraud Cases, by Agency, 2010

Agency Subjects of criminal cases Subjects of civil cases Total

HHS-OIG 7,270 1,606 8,876

USAOs 877 545 1,422

DOJ’s Civil Division n/a 445 445

Subjects that were included in more than one agency 

databasea (299) (257) (556)

Unique count of subjects investigated in fraud cases 7,848 2,339 10,187

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG), Department of Justice’s 

(DOJ) U.S. Attorneys’ Offices (USAO), and DOJ’s Civil Division data.

Notes: Data in this table are for calendar year 2010. The data from HHS-OIG pertained only to health 

care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); however, 

data from the USAOs and DOJ’s Civil Division may also include other health care fraud.

DOJ’s Civil Division handles civil health care fraud cases and has the authority to bring criminal 

charges against pharmaceutical and medical device manufacturers under the Federal Food, Drug, 

and Cosmetic Act. 

a

Health care fraud data reported in this table contain duplicate information for some subjects of the 

fraud cases because fraud cases are often jointly handled by HHS-OIG, USAOs, and DOJ’s Civil 

Division, and information about these cases are entered into each agency’s own database. We 

excluded duplicate information for subjects that we identified in more than one agency database so

that each subject was only included once in our analysis.

According to 2010 HHS-OIG data, most of the subjects involved in fraud 

cases were referred to HHS-OIG by federal law enforcement agencies—

such as the FBI—(38 percent), or state or local law enforcement agencies 

(10 percent).27 Case subjects were also referred to HHS-OIG by CMS 

contractors tasked with program integrity (14 percent), current or former 

employees of providers (9 percent), or individuals (9 percent), and the 

remainder were from other sources. (See table 3 for additional 

information on the source of health care fraud cases referred to HHSOIG.)

 

27The data we received from the USAOs and DOJ’s Civil Division did not contain 

information on the source of the fraud case. However, officials from DOJ indicated that 

they generally receive fraud cases from HHS-OIG, the FBI, or from relators who have filed 

claims under the False Claims Act.
 

Page 14 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 3: Number and Percentage of Subjects of Health Care Fraud Cases Referred to HHS-OIG, by Source of Referral, 2010

Criminal Civil Total Percentage of total

Federal law enforcement 3,022 337 3,359 37.8% 

CMS program integrity contractors 1,113 122 1,235 13.9

State, local, or tribal law enforcement agency 805 62 867 9.8

Current or former employees of providers 783 53 836 9.4

Individuals who are unaffiliated 778 44 822 9.3

Qui Tama 71 684 755 8.5

Other 486 128 614 6.9

State, local, or tribal non-law-enforcement agency 203 54 257 2.9

Self-disclosureb 9 122 131 1.5

Total 7,270 1,606 8,876 100% 

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG) data.

Notes: The data included in this table represent information about the source of the fraud case, which 

can include more than one subject and are for calendar year 2010. The data from HHS-OIG pertained 

only to health care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

a

Qui tam cases are brought under the False Claims Act by a private citizen.

b

Self-disclosure refers to cases where providers report any improper actions to HHS-OIG themselves.

About 49 percent of criminal health care fraud subjects were, or were 

affiliated with, medical facilities (such as medical practices, clinics, or 

centers), durable medical equipment suppliers, and home health 

agencies. Of the 7,848 subjects associated with criminal cases, about 

1,100 were charged, and 85 percent of those charged were found guilty 

or pled guilty or no contest. Of those subjects who were found guilty or 

pled guilty or no contest, about 37 percent were medical facilities and 

durable medical equipment suppliers.

Medical Facilities and 

Durable Medical 

Equipment Suppliers Were 

the Most Frequent 

Subjects of Criminal Fraud 

Cases in 2010
 

Page 15 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

According to 2010 data, many different types of providers—including 

medical facilities and hospitals, or individuals affiliated with these 

entities—were suspected of health care fraud.28 Specifically, about onequarter of subjects investigated in criminal health care fraud cases were 

medical facilities or were affiliated with these facilities. Additionally, about 

16 percent of subjects were durable medical equipment suppliers. Over 

19 percent were subjects for which we could not determine an affiliation. 

See table 4 for additional information on the subjects of criminal health 

care fraud cases by provider type for 2010.

 

28Subjects of the fraud cases could be the entities themselves, such as a durable medical 

equipment supplier that billed for equipment that it did not provide, or individuals affiliated 

with an entity, such as an employee of a durable medical equipment supplier that billed for 

equipment not prescribed by a physician. In both of these cases, the entity involved is the 

durable medical equipment supplier, but in the first example the subject is the entity itself 

while in the second example the subject is an individual affiliated with the durable medical 

equipment supplier. We generally refer to the subjects of fraud cases as the entities with 

which they are affiliated.

Criminal Health Care Fraud
 

Page 16 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 4: Number and Percentage of Subjects in Criminal Health Care Fraud 

Investigations, by Provider Type, 2010

Number of subjects of 

criminal cases

Percentage of total 

criminal cases

Medical facilities

Medical practices 1,101 24.3%

Medical centers or clinics 807

Durable medical equipment suppliers 1,275 16.2

Home health agencies 639 8.1

Other centers, clinics, or facilities 598 7.6

Hospitals 357 4.5

Pharmacies 321 4.1

Nursing homes 253 3.2

Management service providers 209 2.7

Medical transportation companies 200 2.5

Other 162 2.1

Mental health centers or clinics 122 1.6

Government employees, contractors, or grantees 103 1.3

Insurance companies 79 1.0

Dental clinics or practices 55 0.7

Pharmaceutical manufacturers or suppliers 38 0.5

Medical supply companies 18 0.2

Unknown affiliation

Health care providers 779

Individuals 19.2 a 668

Data unavailable 64

Total 7,848

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG) and Department of 

Justice’s (DOJ) U.S. Attorneys’ Offices (USAO) data.

Notes: Data in this table are for calendar year 2010. The data from HHS-OIG pertained only to health 

care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); however, 

data from the USAOs may also include other health care fraud.

Each unique subject is only counted once in this table. We identified 299 subjects of criminal cases 

that were duplicate subjects in the 2010 data. We removed these duplicate subjects from the analysis 

reported here.

For the subjects in the DOJ’s USAO data, we identified the provider type using the court documents 

obtained from the Public Access to Court Electronic Records (PACER) database.

a

Individuals whose affiliation was unknown include some who were not health care providers. For 

example, this category includes individuals who were investigated for health care fraud because they 

obtained illegal prescription drugs from physicians or pharmacies.
 

Page 17 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Among the 7,848 subjects in 2010 criminal cases, nearly 50 percent were 

the entities themselves, rather than individuals affiliated with those 

entities. See table 5 for more detailed information on the types of 

providers that were subjects in 2010 criminal cases. Of the 3,864 subjects 

that were entities, most were durable medical equipment suppliers (819), 

home health agencies (507), medical centers or clinics (506), or medical 

practices (486). Additionally, more than 15 percent were physicians, and 

about 14 percent were management employees—such as owners, 

operators, or managers.
 

Page 18 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 5: Number and Percentage of Subjects in Criminal Health Care Fraud 

Investigations, by Entity or Individual Provider Type, 2010

Number of 

subjects of 

criminal cases

Percentage of 

total criminal 

cases

Entities

Durable medical equipment suppliers 819

49.2%

Home health agencies 507

Medical centers or clinics 506

Medical practices 486

Hospitals 336

Other centers, clinics, or facilities 330

Nursing homes 202

Pharmacies 196

Other entities 482

Entities subtotal 3,864

Individuals

Physicians 1,208 15.4

Management employees

Durable medical equipment suppliers 420

13.6

Medical centers or clinics 185

Home health agencies 85

Other entities 375

Employees 517 6.6

Individuals that were not affiliated with an 

entity and were not health care providers 344 4.4

Recipients and beneficiaries 258 3.3

Nurses, nurses’ aides, or health care aides 166 2.1

Othera 426 5.4

Individuals subtotal 3,984

Total 7,848

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG) and Department of 

Justice’s (DOJ) U.S. Attorneys’ Offices (USAO) data.

Notes: Data in this table are for calendar year 2010. For the subjects in the Department of Justice’s 

U.S. Attorneys’ Offices data, we identified the provider type using the court documents obtained from 

the Public Access to Court Electronic Records (PACER) database. The data from HHS-OIG pertained 

only to health care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); 

however, data from the USAOs may have also included other health care fraud.

a

This category includes pharmacists, psychologists, therapists, counselors, physician assistants, 

dentists, and other individuals.
 

Page 19 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Our data show that 2010 criminal cases involved 2,300 more subjects 

than 2005 cases. Additionally, some provider types had particularly large 

increases in 2010 compared to the number of subjects investigated in 

criminal cases in 2005. For example, cases where pharmacies were the 

subjects increased from 99 subjects in 2005 to 321 in 2010 (an increase 

of 224 percent), and the number of home health agency subjects 

increased from 284 to 639 (an increase of 125 percent). The 2005 data 

show that medical facilities and durable medical equipment suppliers 

were the provider types with the most subjects investigated in cases, as 

was also the case with 2010 data. In 2005, medical facilities represented 

23 percent of all subjects in criminal cases, and durable medical 

equipment suppliers accounted for 18 percent. Similarly, in 2010, medical 

facilities accounted for 24 percent of all subjects in criminal cases, and 

durable medical equipment suppliers accounted for 16 percent.

Most of the 7,848 subjects who were investigated for criminal fraud in 

2010 were not pursued—meaning that HHS-OIG did not refer the 

subject’s case to DOJ for prosecution. Most subjects—about 

85 percent—were investigated in criminal cases that were not pursued 

for a variety of reasons, mainly due to lack of resources or insufficient 

evidence. The 2010 data indicated that 1,086 subjects were charged in 

criminal fraud cases, which represented about 14 percent of all criminal 

case subjects. Additionally, nearly 1 percent of subjects were involved in 

criminal case appeals, most of which were decided favorably for the U.S. 

government. See table 6 for additional information about the number of 

subjects in criminal cases by outcome.

Changes in Provider Types in 

2005 and 2010 

Outcomes for the Subjects of 

Criminal Fraud Cases from 

2010 Data 
 

Page 20 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 6: Number and Percentage of Subjects Investigated in Criminal Health Care Fraud Cases, by Outcome of Case, 2010

Number of 

subjects 

Number of subjects 

by category

Percentage of total 

subjects by category

Subjects that were chargeda

Found guilty or pled guilty or no contest 925

1,086 14% Acquitted 13

Subject’s case was dismissed 102

Other outcome, such as pretrial diversion 46

Subjects whose cases were not pursuedb

Lack of resources 2,219

6,700 85

Lack of sufficient evidence or insufficient details 904

Subject’s case did not meet guidance, was outside of 

HHS-OIG jurisdiction, or violation occurred outside of 

HHS-OIG’s region 338

Subject already under investigation or investigated in 

another case 336

Other reasonsc 2,903

Subjects who appealed their original cases

Appeal was dismissed by appellant 5 

Appeal decision was favorable for the U.S. government 55 62 1 

Appeal decision was not favorable for the U.S. government 2 

Total 7,848

Source: GAO analysis of data obtained from Department of Health and Human Services’ Office of Inspector General (HHS-OIG) and 

Department of Justice’s (DOJ) U.S. Attorneys’ Office (USAO).

Notes: Data in this table are for calendar year 2010. The data from HHS-OIG pertained only to health 

care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); however, 

data from the USAOs may have also included other health care fraud.

a

Subjects in this section were involved in cases that were pursued, meaning that the USAOs received 

the case and took some sort of action on it. For example, in some cases, the USAO received the 

case and decided to dismiss the charges while in others the USAO prosecuted the case and the 

subject was found guilty.

b

Subjects in this section were from cases that were not pursued further than the case being received 

or investigated by HHS-OIG. For these cases, HHS-OIG did not refer them to the USAOs for 

prosecution for the reasons included in this section of the table.

c

Other reasons include that the allegations in the case did not constitute a violation or the criminal 

case was closed to pursue a civil case, impose a civil monetary penalty, or exclude the provider. 

Some subjects had their cases closed by HHS-OIG rather than referring the case to the USAOs for 

prosecution for undetermined reasons.
 

Page 21 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Among the 1,086 subjects that were charged, over 85 percent 

(925 subjects) were found guilty, pled guilty, or pled no contest to some or 

all of the criminal charges against them. For the remaining 15 percent of 

subjects, charges were dismissed (9.4 percent), subjects were found not 

guilty (1.2 percent), or had another outcome (4.2 percent).29

Of the 925 subjects who were found guilty or pled guilty or no contest, 

about 19 percent were from medical facilities—including medical centers, 

clinics, or practices. Although 2010 Medicare, Medicaid, and CHIP 

expenditures on durable medical equipment services was 1.3 percent of 

total spending in those programs, approximately 19 percent of subjects 

that were found guilty or pled guilty or no contest were durable medical 

equipment suppliers. Many different provider types were among the 

remaining subjects found guilty or that pled guilty or no contest. We could 

not identify the affiliation of nearly one-third of the subjects, including both 

health care providers and individuals. See table 7 for additional 

information on these subjects in 2010 criminal cases by provider type. 

 

29Subjects involved in cases where there was another outcome included subjects that had 

pretrial diversions, were charged in other cases, or were involved in cases that were 

transferred to another district.
 

Page 22 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 7: Number and Percentage of Health Care Fraud Subjects That Were Found 

Guilty or Pled Guilty or No Contest, by Provider Type, 2010

Number of subjects 

that were found 

guilty or pled guilty 

or no contest

Percentage of total 

number of subjects 

that were found 

guilty or pled guilty 

or no contest

Medical facilities

Medical centers or clinics 130

18.7%

Medical practices 43

Durable medical equipment suppliers 171 18.5

Other centers, clinics, or facilities 58 6.3

Other 49 5.3

Home health agencies 42 4.5

Pharmacies 40 4.3

Management service providers 33 3.6

Nursing homes 14 1.5

Medical transportation companies 14 1.5

Pharmaceutical manufacturers or suppliers 9 1.0

Mental health centers, clinics, or facilities 9 1.0

Medical supply companies 8 0.9

Insurance companies 5 0.5

Dental clinics or practices 4 0.4

Government employees, contractors, or grantees 3 0.3

Hospitals 2 0.2

Unknown affiliation

Individuals 220

Health care providers 52 31.6

Data unavailable 19

Total 925

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG) and Department of 

Justice’s (DOJ) U.S. Attorneys’ Offices (USAO).

Notes: Data in this table are for calendar year 2010. For the subjects in the DOJ’s USAO data, we 

identified the provider type using the court documents obtained from the Public Access to Court 

Electronic Records database. The data from HHS-OIG pertained only to health care fraud in 

Medicare, Medicaid, and the Children’s Health Insurance Program; however, data from the USAOs 

may have also included other health care fraud.
 

Page 23 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Of the 925 subjects who were found guilty or pled guilty or no contest, 

60 percent were sentenced to incarceration,30

Subjects of criminal fraud cases could also be sentenced to home 

detention, public service, or their sentences could be suspended. 

Additionally, subjects could also be ordered to pay fines and restitution. 

Data from HHS-OIG contained information on these types of penalties, 

but data we received from the USAOs did not. According to 2010 data 

from HHS-OIG

and 73 percent were 

sentenced to probation. Nearly 26 percent of those sentenced to

incarceration were subjects affiliated with durable medical equipment 

suppliers, and 21 percent were affiliated with medical facilities. Similarly, 

both durable medical equipment suppliers and medical facilities each 

represented 17 percent of subjects sentenced to probation. The average 

length of a sentence to incarceration was about 3.5 years, and the 

maximum sentence received was a life sentence. Nearly 60 percent of 

subjects sentenced to incarceration received sentences between 2 and 

5 years, while nearly 21 percent received a term of 1 year or less. More 

than 13 percent received sentences between 6 and 10 years and about 

5 percent received sentences of more than 10 years of incarceration. The 

average probation term was 2.8 years, and the maximum term was 

10 years. Nearly 78 percent of subjects sentenced to probation received a 

probation term between 2 and 5 years.

• 56 subjects were sentenced to home detention terms;

• 75 subjects were sentenced to complete public service;

• 31 subjects received suspended sentences;

• 440 subjects were required to pay a fine; and

• 307 subjects were required to pay restitution.

 

30An official at HHS-OIG told us that it captures information on whether the subjects were 

sentenced to be incarcerated but does not capture information on whether the subjects 

were sentenced to serve that term in jail or prison, and a USAO official indicated that 

subjects sentenced to incarceration serve those sentences in prison.
 

Page 24 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Among those subjects that were required to pay fines or restitution, or 

both, the average amounts required were $898,361 in fines, and 

$1.8 million in restitution. In total, subjects were ordered to pay nearly 

$960 million in combined fines and restitution.31

According to 2010 civil case data for health care fraud, 2,339 subjects 

were investigated in civil cases. Hospitals represented nearly 20 percent 

of these subjects, and medical facilities about 18 percent. Civil cases 

involving approximately 1,100 subjects were pursued—meaning that the 

USAOs or DOJ’s Civil Division received the cases and took some sort of 

action, such as litigating the case; and of those, 55 percent resulted in a 

judgment for the government or in a settlement. For those cases that 

resulted in a judgment or settlement, or both, about 44 percent of the 

subjects were hospitals and medical facilities.

According to 2010 data, hospitals were nearly 20 percent of the subjects 

of civil fraud cases, and medical facilities were also frequently the 

subjects of civil cases, making up about 18 percent of the subjects. We 

were unable to determine the provider type or their affiliation for about 

18 percent of the subjects of civil cases. (See table 8 for additional 

information on the subjects of civil health care fraud cases by provider 

type for 2010.) 

 

31According to 2010 data from HHS-OIG, subjects of criminal cases were ordered to pay 

about $395 million in fines and $565 million in restitution. Although the subjects were 

ordered to pay these amounts, the amounts actually recovered from them may be less 

than what was ordered. HHS-OIG also receives recoveries, which is money returned 

administratively—such as through self-disclosure, demand letters, or prepayment prior to 

disposition—rather than settlements or judgments. 

Hospitals and Medical 

Facilities Were the Most

Frequent Subjects of Civil 

Fraud Cases, Including 

Cases That Resulted in 

Judgments or Settlements

Civil Health Care Fraud 
 

Page 25 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 8: Number and Percentage of Civil Health Care Fraud Case Subjects 

Investigated, by Provider Type, 2010

Number of subjects 

of civil cases

Percentage of 

total civil cases

Hospitals 455 19.5%

Medical facilities

Medical practices 218

17.7

Medical centers or clinics 197

Other centers, clinics, or facilities 145 6.2

Home health agencies 120 5.1

Pharmaceutical manufacturers or suppliers 108 4.6

Durable medical equipment suppliers 102 4.4

Management service providers 101 4.3

Nursing homes 100 4.3

Pharmacies 75 3.2

Insurance companies 74 3.2

Other 55 2.4

Mental health centers, clinics, or facilities 42 1.8

Government employees, contractors, or 

grantees 32 1.4

Dental clinics or practices 31 1.3

Medical transportation companies 29 1.2

Medical supply companies 25 1.1

Unknown affiliation

Data unavailable or incomplete 218

Health care providers 190 18.3

Individuals 22

Total 2,339

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG), Department of Justice’s 

(DOJ) U.S. Attorneys’ Offices (USAO), and DOJ’s Civil Division data.

Notes: Data in this table are for calendar year 2010. The data from HHS-OIG pertained only to health 

care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); however, 

data from the USAOs and DOJ’s Civil Division may have also included other health care fraud.

Fraud cases are often jointly handled by HHS-OIG, USAOs, and DOJ’s Civil Division. As a result, the 

data we received contain duplicate information for some of the subjects of fraud cases. We identified 

257 subjects of civil cases that were duplicate subjects in the 2010 data and removed these duplicate 

subjects from the analysis reported here.

For the subjects in the USAOs and DOJ’s Civil Division data, we identified the provider type using the 

court documents obtained from the Public Access to Court Electronic Records (PACER) database.
 

Page 26 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

As previously mentioned, individuals can bring civil health care fraud 

suits, known as qui tam cases, under the FCA. According to 2010 data 

from the USAOs and DOJ’s Civil Division, 88 percent of subjects 

investigated in civil cases were investigated in qui tam cases.

Nearly 61 percent of the subjects investigated in 2010 civil cases were 

entities themselves, rather than individuals affiliated with those entities. 

Most of these entities were hospitals, medical centers or clinics, medical 

practices, or pharmaceutical manufacturers or suppliers. Additionally, 

physicians represented 12 percent of the subjects; and management 

employees, such as owners, operators, or managers, represented 

8 percent of the civil case subjects. (See table 9 for more-detailed 

information on the types of providers that were subjects in 2010 civil 

cases.) 
 

Page 27 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 9: Number and Percentage of Civil Health Care Fraud Case Subjects 

Investigated, by Entity or Individual Provider Type, 2010

Number of subjects 

of civil cases

Percentage of 

total civil cases

Entities 

Hospitals 432

60.6%

Medical centers or clinics 121

Medical practices 121

Pharmaceutical manufacturers or suppliers 108

Home health agencies 91

Nursing homes 83

Durable medical equipment suppliers 82

Management service providers 82

Other entities 298

Entities subtotal 1,418

Individuals

Physicians 284 12.1

Management employees 194 8.3

Employees 94 4.0

Nurses, nurses’ aides, or health care aides 29 1.2

Othera 320 13.7

Individuals subtotal 921

Total 2,339

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG), Department of Justice’s 

(DOJ) U.S. Attorneys’ Offices (USAO), and DOJ’s Civil Division data.

Notes: Data in this table are for calendar year 2010. For the subjects in the USAOs and DOJ’s Civil 

Division data, we identified the provider type using the court documents obtained from the Public 

Access to Court Electronic Records (PACER) database. The data from HHS-OIG pertained only to 

health care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); 

however, data from the USAOs and DOJ’s Civil Division may have also included other health care 

fraud.

a

This category includes pharmacists, psychologists, therapists, counselors, physician assistants, 

dentists, recipients and beneficiaries, and others.

In 2010, over 600 more subjects were investigated in civil cases than in 

2005, about a 35 percent total increase. Changes in provider types for 

civil cases are not reported here because we were unable to identify 

provider types for about 31 percent of the subjects in the 2005 data. In 

the 2010 data, we were unable to identify the provider type for about 

18 percent of subjects. Because of this limitation, the percentage 

increases in certain provider types investigated in civil fraud cases may 

Civil Case Subjects in 2005 and 

2010 
 

Page 28 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

not be an accurate reflection of the actual increases in provider types of 

civil fraud cases.

Not all of the subjects investigated in 2010 civil cases were pursued—

meaning that the USAOs or DOJ’s Civil Division received the case and 

took some sort of action. According to the data we received, 1,087 

subjects were involved in civil cases that were pursued, representing 

nearly 47 percent of all civil case subjects. Among other subjects of civil 

cases, more than 53 percent were not pursued for numerous reasons, 

including a lack of resources or insufficient evidence. Additionally, less 

than 1 percent of subjects were involved in civil appeals cases. (See table 

10 for additional information about the number of subjects involved in civil 

cases by outcome.)

Table 10: Number and Percentage of Subjects in Civil Health Care Fraud Cases, by Outcome of Case, 2010

Number of 

subjects 

Number of subjects 

by category

Percentage of total 

subjects by category

Subjects in civil case investigations that were pursueda

Judgment for U.S. government or relator, or settlement, or both 602

1,087 46.5%

Judgment for opposition (subject) 11

Case was declined 33

Case was voluntarily dismissedb 315

Case was closed with necessary actions taken 70

Other outcome 56

Subjects in civil case investigations that were not pursuedc

Lack of resources 271

1,246 53.3

Lack of sufficient evidence or insufficient details 58

Subject already under investigation or investigated in another case 66

Other reasonsd 851

Subjects who appealed their original cases

Appeal was dismissed by appellant 2 

6 0.3

Appeal decision was favorable for the U.S. 4 

Total 2,339

Source: GAO analysis of data obtained from Department of Health and Human Services’ Office of Inspector General (HHS-OIG), 

Department of Justice’s (DOJ) U.S. Attorneys’ Office (USAO) and DOJ’s Civil Division data. 

Notes: Data in this table are for calendar year 2010. The data from HHS-OIG pertained only to health 

care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); however, 

data from the USAOs and DOJ’s Civil Division may have also included other health care fraud.

a

Subjects in this section were involved in cases that were pursued, meaning that the USAOs or DOJ’s 

Civil Division received the case and took some sort of action on it. For example, in some cases, 

DOJ’s Civil Division received the case and declined to intervene while in others DOJ’s Civil Division 

litigated the case and the court issued a judgment against the subject.

Outcomes for Subjects of Civil 

Fraud Cases in 2010 
 

Page 29 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

b

This category includes qui tam cases that were voluntarily dismissed by the relator as well as qui tam 

cases that were voluntarily dismissed by the relator after the government decided not to intervene in 

the case.

c

Subjects in this section were from cases that were not pursued further than the case being received 

or investigated by HHS-OIG. HHS-OIG did not refer these cases to the USAOs or DOJ’s Civil Division 

for prosecution or litigation for the reasons included in this section.

d

Other reasons include that the case does not meet established office guidance, the allegations in the 

case do not constitute a violation, or the case is outside of U.S. prosecutorial guidelines. Some 

subjects had their cases closed by HHS-OIG rather than referring the case to the USAOs or DOJ’s 

Civil Division for prosecution or litigation for undetermined reasons.

According to data from the USAOs and DOJ’s Civil Division, most qui tam 

cases did not result in a judgment or settlement. For example, 52 percent 

of subjects in qui tam cases were either voluntarily dismissed by the 

relator (34 percent) or were declined by the USAOs or DOJ’s Civil 

Division (18 percent). Nearly 24 percent of qui tam cases were settled 

and in 8 percent of qui tam cases there was a judgment for the 

government.32

For the 602 subjects for which cases resulted in a settlement or judgment 

for the government or for the relator, 27 percent of the subjects were 

hospitals and about 17 percent were medical facilities. For nearly 

16 percent of subjects, we were unable to determine the affiliation of the 

provider or individual. (See table 11 for information on provider types for 

subjects where the case resulted in a settlement or judgment for the 

government or relator.)

 

32Nearly 15 percent of subjects were involved in cases where the case had another 

outcome, such as the case was transferred from the district or the court dismissed the 

case on a motion. Additionally, 1.6 percent of subjects were involved in qui tam cases 

where there was a judgment for the opposing party.
 

Page 30 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 11: Number and Percentage of Subjects in Civil Health Care Fraud Cases with 

Judgment for Government or Relator, or Settlement, or Both, by Provider Type, 

2010

Number of subjects 

with judgment 

or settlement, or both

Percentage of total 

number of subjects 

with judgment or 

settlement, or both

Hospitals 165 27.4%

Medical facilities

Medical practices 65

16.6

Medical centers or clinics 35

Other centers, clinics, or facilities 41 6.8

Home health agencies 34 5.6

Nursing homes 26 4.3

Durable medical equipment suppliers 25 4.2

Management service providers 21 3.5

Dental clinics or practices 21 3.5

Pharmaceutical manufacturers or suppliers 19 3.2

Insurance companies 15 2.5

Pharmacies 13 2.2

Medical transportation companies 11 1.8

Mental health centers, clinics, or facilities 5 0.8

Other 5 0.8

Medical supply companies 3 0.5

Government employees, contractors, or grantees 2 0.3

Unknown affiliation

Data unavailable 58

Health care providers 34 15.9

Individuals 4 

Total 602

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG), Department of Justice’s 

(DOJ) U.S. Attorneys’ Offices (USAO), and DOJ’s Civil Division data.

Notes: Data in this table are for calendar year 2010. For the subjects in the USAOs and DOJ’s Civil 

Division data, we identified the provider type using the court documents obtained from the Public 

Access to Court Electronic Records (PACER) database. The data from HHS-OIG pertained only to 

health care fraud in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); 

however, data from the USAOs and DOJ’s Civil Division may have also included other health care 

fraud.
 

Page 31 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

According to data from HHS-OIG, of those subjects investigated in cases 

with a judgment or settlement, 275 subjects were to pay restitution as a 

result of the judgment or settlement and 89 subjects were to pay fines. 

Approximately 38 percent of the subjects that were to pay restitution were 

hospitals; 17 percent were medical facilities; and 11 percent were 

physicians whose affiliation we were unable to determine. Among those 

subjects that were to pay fines or restitution, or both, the average 

amounts were about $7.1 million in fines and about $5.4 million in 

restitution. In total, subjects were to pay over $2.1 billion in combined 

fines and restitution as a result of the judgments or settlements.

33

HHS-OIG excluded individuals and entities from participating in federal 

health care programs for a variety of reasons in 2010. These reasons 

included convictions for health care fraud as well as reasons other than 

for health care fraud, such as patient abuse or neglect.34 When 

individuals or entities are excluded, their provider enrollment is revoked 

and they are not eligible to bill for services provided.35 According to 2010 

exclusion data we received from HHS-OIG, 2,190 individuals and entities 

were excluded. About 60 percent of the individuals and entities excluded 

were those in the nursing profession, such as nurses and nurses’ aides. 

The next-largest provider type excluded was pharmacies or individuals 

affiliated with pharmacies, though they only represented about 7 percent 

of the 2010 exclusions. (See table 12 for additional information on the 

types of providers excluded.)

 

33According to 2010 data from HHS-OIG, subjects of civil cases were to pay about 

$633.4 million in fines and $1.474 billion in restitution. HHS-OIG also receives recoveries, 

which is money returned administratively—such as through self-disclosure, demand 

letters, or prepayment prior to disposition—rather than settlements or judgments. 

34As previously noted, HHS-OIG can exclude individuals and entities from program 

participation for a variety of reasons other than for a health care fraud conviction, including 

license suspension, surrender, or revocation. The exclusions data we received from HHSOIG contains all exclusions, not those exclusively related to health care fraud convictions.

35Additionally, HHS-OIG has the authority to impose a civil monetary penalty on anyone 

who employs an excluded individual or entity.

Nearly 2,200 Individuals 

and Entities Were 

Excluded from Program 

Participation by HHS-OIG, 

about 60 Percent of Whom 

Were in the Nursing 

Profession 
 

Page 32 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 12: Number of Individuals and Entities Excluded from Program Participation, 

by Provider Type, 2010

Provider type Exclusions Percentage

Nursing profession with unknown affiliation 1,281 58.5%

Pharmacies 150 6.8

Health care provider with unknown affiliation 125 5.7

Mental health centers, clinics, or facilities 100 4.6

Medical centers, clinics, or facilities 98 4.5

Durable medical equipment suppliers 85 3.9

Nursing homes 75 3.4

Home health agencies 51 2.3

Other 43 2.0

Other centers, clinics, or facilities 42 1.9

Medical practices 39 1.8

Medical transportation companies 34 1.6

Dental clinics or practices 28 1.3

Government employees, contractors, or grantees 12 0.5

Pharmaceutical manufacturers or suppliers 9 0.4

Hospitals 8 0.4

Management service providers 6 0.3

Insurance companies 3 0.1

Unaffiliated individuals 1 0.0

Total 2,190

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General data.

Notes: Data in this table are for calendar year 2010 and do not include cases also resulting in a civil 

monetary penalty imposed by HHS-OIG.

There were a number of reasons why the 2,190 individuals and entities 

were excluded; about 42 percent were excluded for license revocation, 

suspension, or surrender; over 28 percent were for program-related 

convictions; and about 10 percent were for felony health care fraud 

convictions. Most of those excluded because of revoked, suspended, or 

surrendered licenses were in the nursing profession. (See table 13 for 

additional information on the reasons for excluding individuals in 2010.)
 

Page 33 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 13: Number of Exclusions from Program Participation by Reason, 2010

Exclusion reasons

Number of 

exclusions Percentage

License revocation/suspension/surrender 909 41.5%

Program-related conviction 619 28.3

Felony health care fraud conviction 228 10.4

Patient abuse/neglect conviction 185 8.4

Felony controlled substance conviction 142 6.5

Federal/state health care program 

exclusion/suspension

35 1.6

Entity owned/controlled by excluded/convicted 

individual

32 1.5

Conviction relating to program or health care fraud 17 0.8

Fraud/kickbacks 10 0.5

Individual controlling excluded/convicted entity 5 0.2

Obstruction of an investigation conviction 4 0.2

Failure to grant immediate access 2 0.1

Misdemeanor controlled substance conviction 2 0.1

Total 2,190

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General (HHS-OIG) data.

Notes: Data in this table are for calendar year 2010 and do not include cases resulting in a civil 

monetary penalty imposed by HHS-OIG.

Data we received from 10 state MFCUs show that more than 40 percent 

of the fraud subjects were home health care providers, and health care 

practitioners. Home health care providers also accounted for nearly 

40 percent of criminal convictions and about 45 percent of subjects 

sentenced in 2010. In 2010, pharmaceutical manufacturers were to pay 

more than 60 percent of the total amount of civil judgments and 

settlements.

Home Health 

Providers Were the 

Largest Percentage of 

Criminal Convictions 

for MFCUs, and 

Pharmaceutical 

Manufacturers Were 

Ordered to Pay the 

Most in Civil Cases
 

Page 34 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Of the 2,742 subjects of health care fraud in Medicaid and CHIP referred 

to MFCUs for investigation, more than 40 percent were affiliated with two 

provider categories: home health care providers (26.6 percent) and health 

care practitioners (14.8 percent).36 Home health care providers and 

pharmaceutical manufacturers are the two provider categories that 

experienced the highest increases when comparing 2005 and 2010 data. 

For example, the number of home health care providers suspected of 

fraud increased significantly from 2005 to 2010, from 357 subjects to 730, 

a 104 percent increase. This was primarily driven by an increase in fraud 

cases among health care aides, which increased from 79 subjects in 

2005 to 324 in 2010. Similarly, the number of pharmaceutical 

manufacturers in fraud cases increased significantly from 71 in 2005 to 

296 in 2010. (See table 14, below, for additional information on provider 

types referred to MFCUs in fraud investigations.)

 

36Each instance of fraud in the data submitted by the 10 MFCUs represents one 

individual, facility, or organization that is referred to as the subject of the fraud case. Fraud 

case subjects may be an individual, such as a dentist or a nurse; an organization, such as 

a pharmaceutical manufacturer; or a facility, such as a hospital. Several subjects may be 

investigated in one fraud case; however, in the 10 states’ MFCU data submitted, each 

subject in a fraud case is counted separately. Home health care providers include home 

health agencies and home health care aides; and health care practitioners include 

physicians, doctors of osteopathy, nurses, physician assistants, and nurse practitioners.

More Than 40 Percent of 

Subjects in Fraud Cases 

Were Home Health Care

Providers and Health Care 

Practitioners 
 

Page 35 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 14: Number of Subjects of Health Care Fraud Referred to 10 Medicaid Fraud Control Units (MFCU) for Investigation, by 

Provider Type, 2005 and 2010

Source: GAO analysis of state MFCU data submitted by California, Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 

Texas, and Virginia, October and November 2011.

Notes: Data in this table are for calendar years 2005 and 2010.

Data in this table are for fraud in Medicaid and the Children’s Health Insurance Program (CHIP); 

however, the data may also include some health care fraud cases involving Medicare.

Each instance of fraud in the data submitted by the 10 MFCUs represents one individual, facility, or 

organization that is referred to as the subject of a fraud case. Fraud subjects may be an individual, 

such as a dentist or a nurse, an organization such as a pharmaceutical manufacturer, or a facility 

such as a hospital. Several subjects may be investigated in one fraud case; however, in the MFCU 

data submitted each subject in a fraud case is counted separately.

Data received from the state MFCUs included information for any actions—such as indictments, 

convictions, or penalties—that occurred on a subject’s fraud case in 2005 or 2010. For example, if a 

subject was indicted in 2004 and sentenced in 2005, the MFCU data would only include information 

about the subject’s sentencing in 2005, because the indictment occurred in a year outside of our data 

request.

a

In this table, hospitals and other medical facilities includes hospitals, radiology services, and 

substance abuse treatment centers.

Over half of the MFCUs’ subjects of fraud cases in 2010 were referred 

by the states’ Medicaid agencies (30.9 percent) and private citizens 

(25.1 percent). MFCUs do not pursue all cases of health care fraud that 

are referred to them.

2005 2010

Provider category 

Total number of 

fraud subjects that 

were referred for 

investigation

Percentage of 

total number of 

subjects referred

Total number of 

fraud subjects that 

were referred for 

investigation

Percentage of 

total number of 

subjects referred

Home health care providers 357 16.4 % 730 26.6%

Health care practitioners 487 22.3 406 14.8

Other health care services 384 17.6 384 14.0

Pharmaceutical manufacturers 71 3.3 296 10.8

Durable medical equipment suppliers 143 6.6 214 7.8

Dentists 125 5.7 184 6.7

Long-term care facilities 111 5.1 157 5.7

Management service providers 211 9.7 148 5.4 

Pharmacies 179 8.2 120 4.4

Hospitals and other medical facilitiesa 113 5.2 103 3.8

Total 2,181 2,742 
 

Page 36 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

In 2010, 692 subjects were indicted or charged in criminal health care 

fraud cases handled by 10 MFCUs; of those, nearly 40 percent were 

home health care providers—which includes home health care agencies, 

and home health care aides. Home health care providers also accounted 

for nearly 40 percent of criminal fraud convictions in 2010; health care 

practitioners—physicians, doctors of osteopathy, nurses, physician 

assistants, and nurse practitioners—had the second-highest percentage 

of criminal convictions in 2010 with approximately 16 percent. The 

number of home health care providers convicted in criminal cases more 

than doubled from 79 convictions in 2005 to 192 convictions in 2010, and 

health care practitioners had an increase of 11 convictions compared to 

2005. (See table 15 for additional information about criminal case 

outcomes and prosecutions of subjects by provider type for cases 

handled by 10 MFCUs.)

Home Health Providers 

Accounted for Nearly 

40 percent of Criminal 

Convictions and About 

45 Percent of Subjects 

Sentenced for 2010
 

Page 37 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 15: Outcomes for Subjects of Criminal Health Care Fraud Cases Handled by 10 Medicaid Fraud Control Units (MFCU), 

by Provider Type, 2010

Number of subjects

Provider category Indicted/charged Convicted Acquitted Dismissed Other resultsa

Home health care providers 271 192 1 6 4 

Health care practitioners 95 76 2 9 2 

Other health care services 88 73 0 16 3 

Management service providers 70 67 0 22 0 

Durable medical equipment suppliers 89 46 3 14 2 

Pharmacies 27 19 0 6 0 

Long-term care facilities 5 7 0 3 0 

Dentists 38 5 0 4 1 

Hospitals and other medical facilitiesb 9 3 0 2 0 

Pharmaceutical manufacturers 0 0 0 2 0 

Total 692 488 6 84 12

Source: GAO analysis of state MFCU data submitted by California, Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 

Texas, and Virginia, October and November 2011.

Notes: Data in this table are for calendar year 2010.

Data in this table are for fraud in Medicaid and the Children’s Health Insurance Program (CHIP); 

however, the data may also include some health care fraud cases involving Medicare.

Each instance of fraud in the data submitted by the 10 MFCUs represents one individual, facility, or 

organization that is referred to as the subject of a fraud case. Fraud subjects may be an individual, 

such as a dentist or a nurse, an organization such as a pharmaceutical manufacturer, or a facility 

such as a hospital. Several subjects may be investigated in one fraud case; however, in the MFCU 

data submitted each subject in a fraud case is counted separately.

Data received from the state MFCUs included information for any actions—such as indictments, 

convictions, or penalties—that occurred on a subject’s fraud case in 2005 or 2010. For example, if a 

subject was indicted in 2004 and sentenced in 2005, the MFCU data would only include information 

about the subject’s sentencing in 2005, because the indictment occurred in a year outside of our data 

request.

a

This would include subjects whose cases resulted in diversions and other criminal case outcomes 

that were not included in the convicted column of this table.

b

In this table, hospitals and other medical facilities includes hospitals, radiology services, and 

substance abuse treatment centers.

According to 2010 data for cases handled by the 10 MFCUs, home health 

care providers had the largest number of subjects sentenced to 

incarceration, probation, or other criminal case outcomes, accounting for 

nearly 45 percent of the total number of subjects. Durable medical 

equipment suppliers accounted for the largest monetary penalties, yet 

had relatively few subjects sentenced to incarceration, probation, or other 

criminal case outcomes, such as deferred sentences. Of all of the 

subjects sentenced, 42 percent were sentenced to probation, 32 percent 

were sentenced to incarceration, and 26 percent received other criminal 
 

Page 38 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

case outcomes.37

Table 16: Criminal Case Sentencing Outcomes for Subjects of Health Care Fraud Cases Handled by 10 Medicaid Fraud 

Control Units (MFCU), by Provider Type, 2010

(See table 16 for additional information on criminal case 

outcomes.)

Source: GAO analysis of state MFCU data submitted by California, Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 

Texas, and Virginia, October and November 2011.

Notes: Data in this table are for calendar year 2010.

Data in this table are for fraud in Medicaid and the Children’s Health Insurance Program (CHIP); 

however, the data may also include some health care fraud cases involving Medicare.

Each instance of fraud in the data submitted by the 10 MFCUs represents one individual, facility, or 

organization that is referred to as the subject of a fraud case. Fraud subjects may be an individual 

such as a dentist or a nurse, an organization such as a pharmaceutical manufacturer, or a facility 

such as a hospital. Several subjects may be investigated in one fraud case; however, in the MFCU 

data submitted each subject in a fraud case is counted separately.

 

37Other criminal case outcomes may include deferred sentences, limits on future 

employment, or limits on contact with certain individuals. 

Provider category

Number of 

subjects 

sentenced to 

incarceration

Number of 

subjects 

sentenced to 

probation

Number of 

subjects 

with other 

criminal 

case 

outcomes

Total number 

of subjects 

sentenced

Percent of 

total number 

sentenced

Total amounts 

of monetary 

penalties 

ordered to 

paya

Percent of 

total 

monetary 

penalties 

ordered to 

pay

Home health care 

providers 107 135 121 363 44.5% $7,471,691 9.6%

Health care 

practitioners 41 60 23 124 15.2 16,741,992 21.6

Management 

service providers 45 54 17 116 14.2 10,067,803 13.0

Other health care 

services 36 50 24 110 13.5 10,162,549 13.1

Durable medical 

equipment 

suppliers 25 20 6 51 6.3 25,615,519 33.0

Pharmacies 7 13 11 31 3.8 7,287,855 9.4

Long-term care 

facilities 2 5 5 12 1.5 22,034 0.03

Dentists 2 3 1 6 0.7 26,760 0.03

Hospitals and other 

medical facilitiesb 0 1 2 3 0.4 265,308 0.3

Pharmaceutical 

manufacturers 0 0 0 0 0.0 0 0.0

Total 265 341 210 816 $77,661,510
 

Page 39 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Data received from the state MFCUs included information for any actions—such as indictments, 

convictions, or penalties—that occurred on a subject’s fraud case in 2005 or 2010. For example, if a 

subject was indicted in 2004 and sentenced in 2005, the MFCU data would only include information 

about the subject’s sentencing in 2005, because the indictment occurred in a year outside of our data 

request.

a

Monetary penalties include subjects being ordered to pay fines, restitution to the Medicaid program, 

and investigative costs.

b

In this table, hospitals and other medical facilities includes hospitals, radiology services, and 

substance abuse treatment centers.

In 2010, cases handled by the 10 MFCUs involving pharmaceutical 

manufacturers resulted in the largest amount of civil judgments and 

settlements, totaling $509.4 million and representing about 62 percent of 

all judgments and settlements. According to the 2010 data, 360 subjects 

were ordered to pay nearly $829 million in civil judgments or settlements. 

This represents an increase of 71 percent in the number of subjects 

compared to 2005 when 211 subjects were ordered to pay over 

$808 million in civil judgments or settlements. In 2010, cases involving 

home health care providers had the third-highest number of civil 

judgments and settlements, and the second-lowest amounts of monetary 

penalties; conversely, there were relatively few management service 

provider subjects, yet those were the second-highest monetary penalty 

amounts among the categories of providers. (See table 17 for additional 

information on civil judgments and settlements by provider type.)

Pharmaceutical 

Manufacturers Were 

Ordered to Pay More Than 

60 Percent of the Civil 

Judgments and 

Settlements in 2010
 

Page 40 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 17: Civil Judgments or Settlements for Subjects of Health Care Fraud Cases Handled by 10 Medicaid Fraud Control 

Units (MFCU) by Provider Type, 2005 and 2010

Source: GAO analysis of state MFCU data submitted by California, Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Ohio, 

Texas, and Virginia, October and November 2011.

Notes: Data in this table are for calendar years 2005 and 2010.

Data in this table are for fraud in Medicaid and the Children’s Health Insurance Program (CHIP); 

however, the data may also include some health care fraud cases involving Medicare.

Each instance of fraud in the data submitted by the 10 MFCUs represents one individual, facility, or 

organization that is referred to as the subject of a fraud case. Fraud subjects may be an individual 

such as a dentist or a nurse, an organization such as a pharmaceutical manufacturer, or a facility 

such as a hospital. Several subjects may be investigated in one fraud case; however, in the MFCU 

data submitted each subject in a fraud case is counted separately.

Data received from the state MFCUs included information for any actions—such as indictments, 

convictions, or penalties—that occurred on a subject’s fraud case in 2005 or 2010. For example, if a 

subject was indicted in 2004 and sentenced in 2005, the MFCU data would only include information 

about the subject’s sentencing in 2005, because the indictment occurred in a year outside of our data 

request.

a

In this table, hospitals and other medical facilities includes hospitals, radiology services, and 

substance abuse treatment centers.

GAO provided a draft of the report to DOJ and HHS. DOJ provided 

technical comments, which have been incorporated as appropriate. HHS 

did not comment on the draft.

2005 2010

Provider category 

Total number of 

civil judgments or 

settlements

Total amount 

defendants ordered 

to pay (dollars)

Total number of 

civil judgments 

or settlements

Total amount 

defendants ordered 

to pay (dollars)

Pharmaceutical manufacturers 26 $360,464,411 111 $509,372,944

Other health care services 27 20,653,844 54 81,351,840

Home health care providers 22 15,977,759 43 1,347,230

Health care practitioners 23 7,827,100 33 5,688,174

Management service providers 13 258,291,795 27 129,634,819

Pharmacies 27 52,040,671 24 48,985,438

Hospitals and other medical facilitiesa 23 87,481,318 21 26,872,521

Long-term care facilities 20 1,115,974 18 258,552

Dentists 13 1,466,934 17 9,263,750

Durable medical equipment suppliers 17 2,951,298 12 15,798,274

Total 211 $808,271,103 360 $828,573,542

Agency Comments
 

Page 41 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretaries of Health 

and Human Services and Justice, the Inspector General of HHS, and 

other interested parties. In addition, the report will be available at no 

charge on the GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-7114 or kingk@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made key contributions to this report are 

listed in appendix III.

Kathleen M. King

Director, Health Care
Appendix I: Methodology for Analyzing Data 

Obtained from the Federal Agencies

Page 42 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

To identify subjects of health care fraud cases in Medicare, Medicaid, and 

the Children’s Health Insurance Program (CHIP)—including referrals, 

investigations, prosecutions, and outcomes—by provider type, and to 

examine changes in the distribution of provider types in 2005 and 2010, 

we obtained data on health care fraud cases from the Department of 

Health and Human Services’ Office of Inspector General (HHS-OIG), the 

Department of Justice’s (DOJ) Executive Office of U.S. Attorneys 

(EOUSA)—which provides administrative support for the 94 U.S. 

Attorney’s Offices (USAO)—and DOJ’s Civil Division.1

We obtained data from HHS-OIG’s Investigative Reporting and 

Information System, which contains information on health care fraud 

cases received or investigated by HHS-OIG. The data we received 

contained information on civil and criminal health care fraud cases closed 

in calendar years 2005 or 2010, as well as exclusions from program 

participation. The HHS-OIG data included information about the subjects, 

sources of the cases, outcomes of the investigations and prosecutions (if 

the cases were pursued), and the reasons for which the cases were 

closed (such as lack of evidence). The data we received from HHS-OIG 

also contained information on the provider types of the subjects.

We obtained data 

on fraud cases involving Medicare, Medicaid, and CHIP that were closed 

in calendar year 2005 or 2010. We collected data for closed cases only—

meaning that the agencies were no longer actively investigating or 

prosecuting a case—to avoid concerns about analyzing or reporting 

information about open cases.

Additionally, we obtained data from two divisions within DOJ—EOUSA 

and the Civil Division. The data we received from EOUSA was from the 

Legal Information Office Network System and contained information 

about the subjects of the fraud cases, outcomes of the prosecutions, and 

the reasons for which the cases were closed. Provider type is not a 

required field in the USAOs database; consequently the USAOs do not 

consistently have provider type information. DOJ’s Civil Division provided 

us data from the CASES database. The data received contained 

 

1

Although the Federal Bureau of Investigation (FBI) investigates health care fraud, and 

DOJ’s Criminal Division prosecutes health care fraud, we did not request data from them 

because officials told us that the FBI and DOJ’s Criminal Division primarily work on health 

care fraud cases jointly with the HHS-OIG or USAOs. Officials indicated that the vast 

majority of health care fraud cases handled by FBI and DOJ’s Criminal Division would be 

entered in databases used either by HHS-OIG or USAOs.

Appendix I: Methodology for Analyzing Data 

Obtained from the Federal Agencies
Appendix I: Methodology for Analyzing Data 

Obtained from the Federal Agencies

Page 43 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

information about the subjects, outcomes of the fraud cases, and reasons 

the cases were closed. The DOJ Civil Division does not collect 

information on the subject’s provider type. The data we received from 

HHS-OIG pertained only to health care fraud in Medicare, Medicaid, and 

CHIP; however, data we received from the USAOs and DOJ’s Civil 

Division may have also included other federal health care program fraud 

as well as fraud in the private sector as the databases used to track fraud 

cases do not capture fraud exclusively in Medicare, Medicaid, and CHIP.

Many fraud cases are handled jointly with HHS-OIG, USAOs, and DOJ’s 

Civil Division, and are entered separately into each agency’s database 

that tracks fraud cases. As a result, the data we received contains 

duplicate information on health care fraud cases and subjects. In order to 

minimize the duplication across the data we received, we identified fraud 

case subjects that were in more than one data set we received by 

comparing subject information to the extent possible. We then excluded 

the duplicate data that we identified so that each subject was only 

included once. However, it is possible that our analysis still includes some 

duplication in fraud cases and subjects. For cases and subjects that we 

identified as a match, we used the information in the HHS-OIG data 

instead of either the USAO data or DOJ’s Civil Division data because the 

HHS-OIG data contained information on the subject’s provider type. 

Among the data involving criminal cases, we identified 590 subjects—291 

subjects in the 2005 data and 299 subjects in the 2010 data—that were 

matches between the HHS-OIG data and the USAO data. For civil case 

data, we identified 423 subjects—166 subjects in the 2005 data and 257 

subjects in the 2010 data—that were matches between data we received 

from HHS-OIG, the USAOs, or DOJ’s Civil Division. We removed the 

duplicate subjects we identified from parts of our analysis.

In the USAO and Civil Division data, there were 2,470 subjects—1,484 of 

which were investigated in civil cases, and 986 that were investigated in 

criminal cases—for which we did not identify a duplicate case in the HHSOIG data, and did not contain information on the provider type. To identify 

the type of provider for these subjects, we obtained information from court 

records using the Public Access to Court Electronic Records (PACER).2

 

2

PACER is an electronic public access service that allows users to obtain case and docket 

information from federal appellate, district, and bankruptcy courts via the Internet.

 
Appendix I: Methodology for Analyzing Data 

Obtained from the Federal Agencies

Page 44 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

We reviewed court documents, such as indictments and plea 

agreements, to obtain information on the subject’s provider type. We 

reviewed information we found using PACER and categorized it into one 

of the provider categories in our analysis. However, our analysis of the 

changes in the types of providers in 2005 and 2010 is limited since the 

percentage of subjects for which we were unable to determine the 

provider type was substantially higher in 2005 for civil case subjects. One 

of the reasons we could not determine the provider type was because 

many of the court records for 2005 were not available in PACER.

After we identified the provider types for data we received from USAOs 

and DOJ’s Civil Division, and after reviewing the data on provider types in 

the HHS-OIG data, we created categories of providers in order to analyze 

the data. We assigned the subjects categories: the entity in which health 

care was provided, and the subject’s role in providing care (if care was 

provided). For example, an owner of a durable medical equipment supply 

company was categorized into an entity (durable medical equipment 

supplier) and a role (management employee); a physician employed by a 

hospital would be categorized as hospital for the entity and physician for 

the role. Table 18 provides additional details about the categories we 

developed for our analysis.
Appendix I: Methodology for Analyzing Data 

Obtained from the Federal Agencies

Page 45 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 18: Categories of Provider Types Developed for Analysis of Health Care Fraud Case Subjects

Entity Types of providers included

Dental clinics or practices Includes dentists, employees, and management who are employed by or operate dental 

clinics or practices; and entities that are dental clinics or practices.

Durable medical equipment suppliers Includes employees and management—such as owners and operators—of durable 

medical equipment suppliers that provide medical equipment and supplies; and entities 

that are durable medical equipment suppliers themselves. This category includes many 

types of durable medical equipment such as diabetic supplies, hearing aids, home 

infusion, oxygen, and power vehicles.

Government employees, contractors, or 

grantees

Includes employees, contractors, grantees, nurses, management, or state, local, or tribal 

agencies that are affiliated with a government agency. This category includes federal 

government employees, government grantees, and contractors who have received 

government contracts.

Health care providers with unknown 

affiliation

Includes physicians, physician assistants, nurses, health care aides, and employees 

whose affiliation we could not determine. This category includes physicians who may 

specialize in a particular area of medicine, such as cardiology, though we do not know 

where the physician practices. 

Home health agencies Includes employees, management, nurses, and health care aides who are employed by or 

operate home health agencies; and entities that are home health agencies themselves.

Hospitals Includes employees, management, nurses, physicians, and pharmacists who are 

employed by hospitals; and entities that are hospitals themselves. This category also 

includes state and local government hospitals.

Individuals with unknown affiliation Includes individuals and employees that we could not determine if they were health care 

providers or whether they were affiliated with a medical setting such as a hospital or 

medical center.

Insurance companies Includes employees, management, nurses, and health care aides who are employed by or 

operate health insurance companies; and entities that are insurance companies 

themselves. This category includes private health insurance companies, health care 

conglomerates, health-maintenance organizations, and preferred provider organizations.

Management service providers Includes employees and management who are employed by or operate companies that 

provide management services, such as billing, accounting, investing, or legal services; 

and entities that are companies that provide management services.

Medical centers or clinics Includes employees, management, nurses, physicians, and health care aides who are 

employed by or operate medical centers, clinics, or facilities; and entities that are medical 

centers or clinics. This category includes clinics, such as intercare facilities, hospice 

clinics, and other clinics that specialize in a particular area of medicine.

Medical practices Includes employees, management, nurses, physicians, and health care aides who are 

employed by or operate medical practices or medical groups; and entities that are medical 

practices themselves. This category includes medical practices that specialize in a 

particular area of medicine, such as cardiology or dermatology.

Medical supply companies Includes employees and management who are employed by or operate medical supply 

manufacturers or suppliers; and entities that are medical supply manufacturers or 

suppliers themselves.

Medical transportation companies Includes employees and management who are employed by or operate medical 

transportation companies, such as ambulance companies; and entities that are medical 

transportation companies themselves.
Appendix I: Methodology for Analyzing Data 

Obtained from the Federal Agencies

Page 46 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Entity Types of providers included

Mental health centers or clinics Includes employees, management, and nurses who are employed by or operate mental 

health centers or clinics; and entities that are mental health centers or clinics themselves. 

This category includes community mental health centers, psychology practices, and 

counseling centers.

Nursing homes Includes employees, management, nurses, and health care aides who are employed by or 

operate nursing homes, such as skilled nursing facilities, adult homes, and boarding 

homes; and entities that are nursing homes themselves.

Other Includes private citizens or individuals who were either not health care providers or whose 

affiliation was unknown. 

Other centers, clinics, or facilities Includes employees, management, nurses, and health care aides who are employed by or 

operate centers, clinics, and facilities, such as laboratories, physical therapy clinics, and 

optical practices; and entities themselves. This category includes centers, clinics, and 

facilities that are not otherwise specified in the other categories such as medical clinics, 

hospitals, nursing homes, or mental health centers or clinics.

Pharmaceutical manufacturers or 

suppliers

Includes employees and management who are employed by or operate pharmaceutical 

manufacturing or supplying companies; and entities that are pharmaceutical 

manufacturers or suppliers themselves.

Pharmacies Includes employees, management, and pharmacists who are employed by or operate 

pharmacies; and entities that are pharmacies themselves. 

Source: GAO analysis of data obtained from the Department of Health and Human Services’ Office of Inspector General, U.S. 

Attorney’s Offices, and the Department of Justice’s Civil Division.

To assess the reliability of the data we received from HHS-OIG, USAOs, 

and DOJ’s Civil Division, we interviewed officials from each of those

agencies about the quality of the data, reviewed relevant documentation, 

and examined the data for reasonableness and internal consistency. We 

found these data were sufficiently reliable for the purposes of our report.
Appendix II: Methodology for Selecting State 

Medicaid Fraud Control Units and Analyzing 

Submitted Data

Page 47 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

To identify subjects of Medicaid and Children’s Health Insurance Program 

(CHIP) fraud cases investigated or prosecuted, or both, by Medicaid 

Fraud Control Units (MFCU) by provider type, and to examine changes in 

the distribution of provider types investigated and prosecuted for fraud in

2005 and 2010, we collected data from 10 state MFCUs. Using data 

about MFCUs collected by the Department of Health and Human 

Services’ Office of Inspector General (HHS-OIG), we selected the 

10 state MFCUs that collectively accounted for the majority of open fraud 

investigations, fraud indictments or charges, fraud convictions, MFCU 

grant expenditures, and number of MFCU staff for all MFCUs in fiscal 

year 2010. The state MFCUs we selected also represented over 

40 percent of the civil settlements and judgments—though we were not 

able to analyze fraud-specific civil settlements and judgments because 

the HHS-OIG data available do not separate out fraud settlements and 

judgments from abuse and neglect case settlements and judgments. The 

10 selected MFCUs were in California, Florida, Illinois, Indiana, Louisiana, 

Massachusetts, New York, Ohio, Texas, and Virginia.1 The 10 selected 

MFCUs accounted for 66 percent of MFCU grant expenditures. (See 

table 19 for additional information about the MFCUs.)

 

1

We did not receive complete CHIP fraud data from Florida, New York, and Texas 

because the MFCUs in these states do not investigate fraud in CHIP. In the other seven 

states, data on CHIP fraud were included.

Appendix II: Methodology for Selecting State 

Medicaid Fraud Control Units and Analyzing 

Submitted Data
Appendix II: Methodology for Selecting State 

Medicaid Fraud Control Units and Analyzing 

Submitted Data

Page 48 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 19: Information about Health Care Fraud Handled by 10 State Medicaid Fraud Control Units (MFCU), Fiscal Year 2010

States 

Open fraud 

investigations

Fraud 

indictments/ 

charges

Fraud 

convictions

Civil settlements/ 

judgmentsa MFCU grant 

expenditures

Number of 

MFCU staff

California 840 113 104 52 $27,703,377 185

Florida 628 73 54 73 15,629,601 166

Illinois 186 15 23 18 10,063,030 69

Indiana 562 7 14 34 4,250,731 44

Louisiana 276 79 40 30 4,616,945 51

Massachusetts 278 16 4 36 4,710,043 40

New York 588 83 102 124 40,520,980 306

Ohio 457 105 95 42 5,346,883 57

Texas 1,262 128 80 17 16,950,656 183

Virginia 246 11 11 11 5,913,594 70

10-state total 5,323 630 527 437 $135,705,840 1,171

Total of all state MFCUs 9,710 1,048 839 1,077 $205,500,671 1,827.5

Percentage of national 

total represented by 

10 selected MFCUs 54.8 60.1 62.8 40.6 66.0 64.1

Source: GAO analysis of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) MFCU statistical data 

for fiscal year 2010.

a

Civil settlements and judgments data may include other cases in addition to health care fraud cases 

because the available HHS-OIG data includes both fraud cases and abuse and neglect cases.

We collected data from the state MFCUs by developing a standardized 

data-collection instrument based on the HHS-OIG’s Quarterly Statistical 

MFCU Report Template and accompanying definitions.2 (See table 20 for 

additional information about the definitions for the categories of provider 

types.)

 

2

MFCUs are required to submit data to the HHS-OIG quarterly regarding the number of 

investigations, open investigations by provider type, criminal and civil case results, 

administrative actions ordered, and monetary collections resulting from criminal and civil 

judgments or settlements. 
Appendix II: Methodology for Selecting State 

Medicaid Fraud Control Units and Analyzing 

Submitted Data

Page 49 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Table 20: Categories of Provider Types Used in Data Collection Instrument Sent to State Medicaid Fraud Control Units for 

Analysis of Health Care Fraud Case Subjects

Entity Types of providers included

Management service providers Includes managed care organizations, or other entities providing health care on an arranged, 

prepaid fixed amount; organizations or individuals providing Medicaid program administration 

support; billing companies that prepare and submit health care claims for payment on behalf 

of a health care provider or providers; and other program related services.

Dentists Includes those licensed by the state to provide professional dentistry services to individuals, 

and partnerships or other formal organization of dentists.

Durable medical equipment suppliers Includes persons or facilities that sell or lease disposable or nondisposable medical 

equipment or supplies.

Health care practitioners Includes physicians and doctors of osteopathy licensed to provide medical care, regardless 

of specialty, partnerships or other formal physician organizations; and nurses, physician 

assistants, dental hygienists, and nurse practitioners, and other providers of health care 

services, not otherwise listed, who are regulated by the state in some manner through 

professional licensure or registration. 

Home health care providers Includes home health agencies and home health care aides—nonprofessionally licensed 

individuals providing homemaker, housekeeping, or personal services to individuals, that are 

reimbursed by federally-funded health care programs. May also include in-home care 

providers, personal care aides, and relative care givers.

Hospitals and other medical facilities Includes hospitals; radiology—a person or organization (other than radiologists, who would 

be reported as physicians) who provides X-ray, MRI, or other radiology imaging services; 

and substance abuse treatment centers. 

Nursing homes Includes all nursing facilities, licensed to provide skilled or intermediate care for individuals 

age 21 years or older, and other long-term care facilities such as those residential settings 

that provide nursing or personal care services for residents, regardless of age.

Other health care services Includes podiatrists, optometrists and opticians, chiropractors, other practitioners, labs, 

mental health centers, clinics and facilities, including counselors and psychologists, and 

medical transportation providers. 

Pharmaceutical manufacturers Includes manufacturers of medicines/controlled substances that bill to federally funded 

health care programs.

Pharmacies Includes a person or organization operating a facility where medicine is compounded and 

dispensed, including pharmacists.

Source: GAO analysis of Department of Health and Human Services’ Office of Inspector General documents.

Before finalizing the data-collection instrument, we asked officials from 

two MFCUs to review the instrument to determine if the instrument would 

elicit appropriate responses, and to identify any data that would be 

particularly challenging for a MFCU to provide. We also interviewed 

officials from the Centers for Medicare & Medicaid Services, the HHSOIG’s Office of Evaluation and Inspections, and the National Association 

of MFCUs to obtain information on fraud cases handled by the MFCUs.
Appendix II: Methodology for Selecting State 

Medicaid Fraud Control Units and Analyzing 

Submitted Data

Page 50 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

We collected data for closed health care fraud cases only—meaning that 

agencies were no longer actively investigating or prosecuting a case—to 

avoid concerns about analyzing or reporting information about open 

cases. We requested data from the state MFCUs for any actions—such 

as indictments, convictions, or penalties—that occurred on a subject’s 

fraud case in 2005 or 2010. For example, if a subject was indicted in 2004 

and sentenced in 2005, the MFCU data would only include information 

about the subject’s sentencing in 2005, because the indictment occurred 

in a year outside of our data request. We requested aggregate subjectlevel data, rather than case-level data, from the MFCUs using a 

standardized data-collection instrument.3

 

3

Each instance of fraud in the data submitted by the 10 MFCUs represents one individual, 

facility, or organization that is referred to as the subject of the fraud case. Fraud case 

subjects may be an individual such as a dentist or a nurse, an organization such as a 

pharmaceutical manufacturer, or a facility such as a hospital. Several subjects may be 

investigated in one fraud case; however, in the 10 states’ MFCU data each subject in a 

fraud case is counted separately.

The MFCUs reported 

information on the total number of fraud subjects they investigated and 

prosecuted, and did not provide detailed information for each instance of 

fraud. Because the state MFCUs may work together on certain cases that 

cross state lines, it is possible that duplicate data are included in our 

analysis. We relied on the data as reported by the 10 MFCUs and did not 

independently verify these data. However, we reviewed the data for 

reasonableness and followed up with state officials for clarification when 

necessary. We found that these data were sufficiently reliable for the 

purposes of our report.
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 51 GAO-12-820 Fraud in Medicare, Medicaid, and CHIP

Kathleen M. King, (202) 512-7114 or kingk@gao.gov

In addition to the contact named above, key contributors to this report 

were Martin T. Gahart, Assistant Director; Christie Enders; Jawaria Gilani; 

Dan Lee; Drew Long; Dawn Nelson; and Monica Perez-Nelson.

Appendix III: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(290924)
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