Fraud and abuse are common and persistent problems for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).  Combined federal and state spending now exceeds $1 trillion, with fraud and abuse likely costing taxpayers well over $100 billion annually.

Together with state Medicaid agencies and state attorneys general, several federal offices, such as the Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Department of Justice (DOJ) Civil Division, work to root out abuses in those programs. The Government Accountability Office (GAO) considers Medicare and Medicaid at high-risk for fraud because of they are so large and complicated, and the GAO frequently publishes interesting reports on the Medicare and Medicaid program integrity.

The latest of those reports describes the different types of providers that made up Medicare, Medicaid, and CHIP fraud cases in 2010. Findings included:

  • 40 of individuals or entities in criminal fraud cases were durable medical equipment suppliers or medical facilities, such as medical centers, clinics, and practices. That proportion is essentially unchanged from what it was in 2005.
  • More than one third of civil fraud cases came from hospitals and medical facilities.
  • 15 percent of criminal fraud cases were prosecuted, almost always leading a guilty verdict, a guilty plea, or a plea of no contest.
  • Almost 50 percent of civil cases were prosecuted, with slightly more than half leading to guilty verdicts or settlements.
  • 2,200 providers were excluded from participating in Medicare, Medicaid, or CHIP because of fraud convictions, license revocations, or other program-related convictions.
  • 60 percent of the excluded providers were nurses.
  • 7 percent of excluded providers were pharmacies and individuals associated with pharmacies, the second largest group of excluded providers.

The GAO also looked at cases handled by 10 state Medicaid Fraud Control Units that together account for a majority of open fraud investigations, fraud indictments or charges, and fraud convictions, among other measures. In those states, home health care providers and health care practitioners made up 40 percent of criminal fraud cases.