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 divisions typically prosecute or litigate those cases.additional information about the role of each agency in fraud investigations and prosecutions. 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). 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 Similarly, DOJ’s divisions may choose not to pursue a fraud programs.case for a number of reasons, including a lack of evidence or insufficient evidence to support the charges, or a lack of resources for investigation or prosecution. 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.following: 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. The Social Security Act also provides for criminal penalties for knowing and willful false statements in applications for payment. 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. For example, a payment program 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 Medicare 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. 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. The False Claims Act (FCA) is often used by the federal government in health care fraud cases.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 FCA prohibits certain actions, 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 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. 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. 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). 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 HHS- OIG.) 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. 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. Specifically, about one- quarter 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. 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.