Feds announce $4B recovered in healthcare fraud efforts

The administration also announced new rules on Monday that creates a new screening and enrollment process for providers and suppliers to Medicare, Medicaid and the Children's Health Insurance Program. The rule also stops enrollments of new providers and suppliers if the feds or states discover healthcare fraud trends, and it stops payments to providers and suppliers in cases of suspected fraud. 

The new rules, Sebelius said, will end the "pay-and-chase model," instead allowing the federal government to take a more pro-active approach to stamping out fraud before it happens.
 
The announcement comes a month after Sen. Chuck Grassley (R-Iowa), the top Republican on the Senate Finance Committee, asked HHS and the Justice Department to explain why the Medicare fraud conviction rate remained flat despite extra funding pumped into fraud prevention efforts. According to Grassley's letter to the agencies, the number of criminal convictions fell slightly in 2009 while Congress appropriated $198 million in discretionary funds for Medicare fraud prevention in addition to an $11 million increase in mandatory spending.

However, a time lag between new Medicare fraud prevention investments and any surge in new cases and convictions is to be expected because it takes time to build criminal cases.

The Center for Health Transformation (CHT), headed by Former Republican House Speaker Newt Gingrich, downplayed the recovery efforts, saying that $2.5 billion represents as little as 2 percent of actual Medicare and Medicaid fraud each year, according to CHT calculations.

“We recognize there is no fix all, but celebrating a 2 percent increase in recovered fraud funds is akin to eating a big piece of chocolate cake to celebrate losing weight,” the CHT said in a Monday afternoon statement.

Julian Pecquet contributed to this article.