The Obama administration plans to announce Tuesday that the Justice Department recovered more than $5.6 billion in fraud committed against the government in fiscal 2011. Almost $3.4 billion of the funds came in civil fraud recoveries, with more than $2.2 billion tied to criminal fraud, according to administration officials familiar with the announcement who were not authorized to speak publicly on the matter.
The announcement is tied to a Cabinet-level meeting to be held Tuesday regarding plans to cut wasteful government spending across federal agencies and departments.
Among other cases, the Justice Department reached a $15 million settlement with American Grocers, a Texas company that was buying cheap expired food, altering expiration dates on the food and selling it with a steep markup to the federal government to serve to U.S. troops serving in the Middle East.
But most of the recoveries were tied to health-care fraud and the work of what officials call Medicare Fraud Strike Forces, or specialized teams of agents and prosecutors from the departments of Justice and Health and Human Services in nine cities that are monitoring Medicare spending and quickly bringing cases to court, the officials said. In 2008, the strike forces brought cases involving $384 million in fraudulent claims; this year, cases have topped $1 billion, officials said.
Fraud recoveries are up considerably in recent years, the administration officials said, jumping by 167 percent since 2008. Justice has recovered $15 billion in total fraud since 2009, of which $8.4 billion was tied to health care fraud. The money is returned to state governments, Medicare and Medicaid, to the Treasury for deficit reduction and to whistleblowers who identified the fraud, officials said.
Vice President Biden will chair Tuesday’s meeting, which will be attended by several Cabinet secretaries who plan to share similar examples of how they are identifying potential savings or cracking down on wasteful spending and fraud.
At HHS, Secretary Kathleen Sebelius is expected to unveil plans for the department to urge insurance companies to withhold payments on suspicious claims by patients who “doctor shop,” or use multiple doctors to obtain prescriptions for painkillers and narcotics including OxyContin and Percocet that can easily be abused or resold illegally.
The problem is a growing concern: A Government Accountability Office report released in October found that about 170,000 Medicare beneficiaries were receiving prescriptions for painkillers from five or more doctors at a cost of about $148 million paid by Medicare. In 2008, GAO said one beneficiary was able to obtain prescriptions for a total of 3,655 oxycodone pills from 58 different prescribers.
Tuesday’s meeting was also when we were expected to get our first look at how agencies and departments are cutting back on travel and conference costs in the wake of a controversial Justice Department watchdog report that initially accused the department of spending up to $16 on muffins served at a breakfast meeting.
The department’s acting inspector general later revised the findings, but not before the Office of Management and Budget ordered agencies to curtail and revamp their conference spending plans in time for Tuesday’s meeting.
But administration officials said late Monday that the spending reviews are underway as part of a broader order by President Obama to cut 20 percent of spending on travel, conference costs, technology and “office swag.”
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