Fraud and Abuse Update: OIG Reports Big Recoveries from Providers

us-capitol-building-2-431642-mThe U.S. Department of Health & Human Services (HHS), Office of Inspector General (OIG) recently issued its Semiannual Report to Congress regarding the OIG’s success in detecting and obtaining recoveries as a result of fraud, waste and abuse in Federal healthcare programs.  Our Atlanta and Augusta, Georgia based business and healthcare law firm follows healthcare industry developments with regard to compliance, fraud and abuse.

The OIG uses technology and forensic audit expertise to identify new types of healthcare fraud and take enforcement steps to curb fraud and obtain recoveries for the Federal government.  The OIG’s Semiannual Report covers the OIG efforts and results during the first six months of fiscal year 2016.  According to the Semiannual Report:

  • the OIG anticipates recoveries of more than $2.77 billion, comprising about $555 million in “audit receivables,” $2.22 billion in “investigative receivables.”
  • the OIG reported 428 criminal actions against individuals or entities engaged in crimes relating to Federal healthcare programs
  • the OIG reported 383 civil actions filed in U.S. District Court for civil monetary penalties (CMP) matters, unjust enrichment claims, and administrative recoveries based on provider self-disclosures
  • exclusions of 1,662 individuals and entities from participation in Federal healthcare programs

The Semiannual Report provides numerous specific case examples of the OIG’s accomplishments in combatting healthcare fraud and abuse so far this year, noted in the report as “Highlights of Our Accomplishments,” including the following:

  • Medical Equipment Company pays $646 million to settle False Claims Act (FCA) allegations. Olympus Corporation of the Americas, a distributor of endoscopes and similar medical equipment, will pay $310 million and enter a 5-year Corporate Integrity Agreement (CIA) (paying a total of $646 million) to settle allegations that it paid kickbacks to providers to induce purchases of its products.
  • Owner of Home Health Agency Sentenced to More than Six Years in Prison.

Advance Home Health Care Services, Inc.’s owner, Amer Ehsan, was sentenced to six years/eight months in prison and must pay $4.5 million in restitution based on a guilty plea to healthcare fraud conspiracy charges.  Ehsan allegedly billed Medicare for unnecessary home healthcare services and financially induced physicians to refer Medicare beneficiaries to his business.

  • Pharmacy CEO Sentenced to Ten Years in Prison for Healthcare Fraud

The CEO of Kentwood Pharmacy, Kim Duron Mulder, was sentenced to ten years in prison and must pay $8.8 million in restitution based on a guilty plea to conspiracy to commit healthcare fraud.  Mulder allegedly billed Medicare and private insurers for prescription drugs that were dispensed to patients and subsequently returned to pharmacy stock, resulting in fraudulently induced payments by public and private insurers of more than $79 million.

The Semiannual Report explains that the OIG’s focus and most significant work involves “investigative matters related to the Medicare and Medicaid programs, such as patient harm; billing for services not rendered, medically unnecessary services, or upcoded services; illegal billing, sale, diversion, and off-label marketing of prescription drugs; and solicitation and receipt of kickbacks, including illegal payments to patients for involvement in fraud schemes and illegal referral arrangements between physicians and medical companies.” Id. p. 12.  While the OIG’s efforts to combat fraud and abuse cover an array of creative fraud schemes, recent trends underscored fraud in the following fields:

  • Controlled and noncontrolled substances
  • Home health agencies/personal care services
  • Ambulance transportation
  • Durable medical equipment
  • Diagnostic radiology and laboratory testing

If you have questions about this blog post, you may contact us at our Atlanta or Augusta Offices, or by email to


*Disclaimer: Thoughts shared here do not constitute legal advice.


Source: OIG

Contact Information