Health Care Fraud

Estimates of health care fraud range from between 3 and 10 percent of all health care expenditures--as much as $100 billion based on estimated 1995 expenditures. In late 1993, the Attorney General designated health care fraud as a enforcement priority second only to violent crime initiatives. This report discusses (1) the extent of federal and state immunity laws protecting persons who report information on health care fraud and (2) the advantages and disadvantages of establishing a centralized health care fraud database to strengthen information-sharing and support enforcement efforts.

GAO found that: (1) there are no federal immunity protections for persons who report alleged health care fraud to law enforcement agencies; (2) the only federal provision that could protect such persons applies to persons reporting Medicare and Medicaid fraud; (3) private insurers and health care claims processors are also not provided any federal immunity protection if they report suspected fraud; (4) many states have enacted immunity protection, but the amount of protection varies by state; (5) Congress is considering legislation that would protect persons providing health care fraud information to the Departments of Health and Human Services or Justice; (6) most federal and state officials support the proposed immunity provisions and safeguards to protect against persons who make unsubstantiated allegations in bad faith; (7) many federal officials believe that the legislation should be expanded to provide immunity to persons sharing fraud-related information with any state or federal enforcement entity and insurers sharing information with other insurers; (8) the proposed legislation would create a central database to track criminal activity in the health care system; (9) the database would provide information on criminal convictions, civil judgments, and negative licensing actions and be accessible to federal and state agencies and health insurers; and (10) most law enforcement officials support the database's establishment and believe that enforcement benefits would accrue, but many are concerned about the potential for unauthorized disclosure of information and high development and operating costs.