Medicare Fraud and Abuse

The Department of Justice (DOJ) uses four "national initiatives" to enforce the False Claims Act rather than seeking repayment for Medicare overpayments made because of error, fraud, medically unnecessary services, and other problems. After hospitals alleged that DOJ had targeted them unfairly and applied the act and the initiatives overzealously, and Congress expressed concern, DOJ issued guidance for the appropriate use of these enforcement tools. GAO found that DOJ's process for assessing the U.S. Attorneys' Offices' compliance with the guidance is superficial. DOJ's assessments involve little more than reviewers asking supervisors what they have done to ensure compliance. DOJ's plans for strengthening the process will not provide more substantive information. GAO also found varied implementation of the guidance among the U.S. Attorneys' Offices: Some actions were inconsistent with the guidance and some offices may not have promptly incorporated it into their investigations. GAO could not conduct a complete and independent review because DOJ officials restricted access to some types of information. Nevertheless, it appears that two of the four initiatives are being developed in accordance with the guidance. GAO's survey of state hospital associations found that half of those that had expressed concern before the guidance was issued now believe that it had fully addressed their concerns. GAO recommends that DOJ take additional steps to improve its oversight of national health care initiatives.

GAO noted that: (1) DOJ's national initiative work groups have made further progress in implementing the Department's False Claims Act guidance since GAO issued its February 1, 1999, report; (2) all four work groups have completed their examination of the legal and factual basis for their initiatives and have prepared initiative-specific guidance for the U.S. Attorneys' Offices participating in the initiatives; (3) the guidance prepared by these work groups is consistent with the requirements in DOJ's guidance; (4) while DOJ officials told GAO compliance with its False Claims Act guidance is an ongoing priority for the Department, GAO believes DOJ's process for assessing the U.S. Attorneys' Offices' compliance may be superficial; (5) these assessments appear to involve little more than reviewers asking supervisors what they have done to ensure compliance with the guidance; (6) DOJ's plans for strengthening the assessment process, such as adding more questions, may not be enough to effectively assess compliance; (7) in GAO's view, these additional questions will not provide more substantive information than the original question and are only a starting point for an effective assessment; (8) GAO also found that the implementation of DOJ's False Claims Act guidance varied among the eight U.S. Attorneys' Offices GAO visited that were participating in the national initiatives; (9) five of these offices were participating in the Laboratory Unbundling initiative and had begun their involvement before DOJ's guidance was issued; (10) GAO found that their actions were, to varying degrees, inconsistent with the guidance; (11) GAO's limited review also raised questions about whether four of these offices were promptly incorporating the guidance into their ongoing investigations; (12) restrictions on GAO's access at all offices prevented GAO from conducting a complete and independent review; (13) GAO's survey of state hospital associations indicated that the issuance of DOJ's False Claims Act guidance has lessened their concerns about national initiative investigations; and (14) half of the associations expressing concerns with DOJ's use of the False Claims Act prior to the issuance of the guidance said that the guidance had fully addressed their concerns.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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