FBI Newark Thinking Outside the Box: New Approach to Combat Health Care Fraud

NEWARK, NJ—Michael B. Ward, Special Agent in Charge of the FBI’s Newark Division, announces an advertisement campaign today that was conceived and implemented by Newark’s own agents to increase reporting of health care fraud (HCF). Four separate ads crafted by the agents with artwork created by Clear Channel Outdoor (CCO) will be featured on CCO’s digital billboards on Interstates 95, 80, 78, 287, and 280, and in 40 kiosks in 13 malls throughout New Jersey—all beginning July 25 and running through September 25. FBI headquarters has designated this as the “pilot” program, meaning the program will be scaled to a national level if it successful. Success will be measured by a significant jump in citizen reporting of HCF incidents. This is the first time the FBI has used advertisements to further a general investigative priority.

The Problem Defined

As Americans live longer, health care costs are expected to rise per the increased demand for benefits. Health care expenditures continue to rise at more than twice the rate of inflation, and public funding for government sponsored programs is approaching $1 trillion.

Along with the Department of Health and Human Services, Office of Inspector General; Centers for Medicare and Medicaid Services; and state and local law enforcement agencies, the FBI is charged with addressing HCF threats and vulnerabilities to include fraud, abuse, and threats to public safety. In fact, Congress budgets funds through the Health Insurance Portability and Accountability Act of 1996 (HIPAA) for the FBI’s HCF program which are separate and distinct from the general FBI budget. This is because health care fraud causes one of the largest losses of taxpayer dollars from a government program. Medicare and Medicaid represent the largest publicly funded programs and are, therefore, targeted frequently. Independent estimates of fraudulent billings to health care programs in the United States, both public and private, are estimated at between 3 percent -10 percent of total health care expenditures, representing a staggering $60 billion to $200 billion in losses to fraud each year. These losses are more substantial than losses in any other sector of the public or private marketplace. Daily HCF losses are estimated at $164 million at the 3 percent figure. In New Jersey alone, losses for 2010 are estimated to be $7.5 million (based on national health care expenditures for 2010 and a 10 percent fraud loss). This ranks New Jersey’s HCF losses as the ninth highest total in the nation. (States ranking higher than New Jersey are: California, New York, Texas, Florida, Pennsylvania, Illinois, Ohio, and Michigan.)

But Why Use an Ad Campaign?

The FBI is committed to addressing HCF through disruption and dismantlement and subsequent prosecution of criminals who engage in such activity. Indeed, FBI offices throughout the nation have proactively addressed significant HCF threats through coordinated initiatives, task forces (such as Newark’s HCF Task Force), and undercover operations, resulting in an active nationwide caseload of 2,600 HCF investigations, charges against almost 1,000 subjects, and 750 convictions.

Though the numbers sound large, FBI Newark believes this is only scratching the surface. For example, the number of HCF complaints FBI Newark received from the public in 2010 totaled 18, down from 25 in 2008. Referrals from other agencies in 2010 totaled 9, down from 66 in 2008. The primary cause of the drop in numbers can be attributed to a decreased source base, meaning less reporting of HCF incidents by the public. Though the reason for a drop in citizen complaints is unclear, recognizing HCF for what it is and knowing where and how to report it a major consideration. On the contrary, a recent report by the Associated Press (Kelli Kennedy, July 12, 2011) cited the systemic problems in the Centers for Medicare and Medicaid Services (CMS) own computer systems for tracking HCF. However, without source reporting, it is difficult for law enforcement to infiltrate criminal groups:

“Post 9/11, the FBI transformed itself from the traditional police organization into an intelligence-driven machine,” said Ward. “Every step of every investigation is based on information from many different types of sources and interagency cooperation and it is all checked and rechecked. As a result, the end product produced by this machine is only as good as what you initially put into it. Databases only help you gather historical information and only get you so far, but they are certainly not the end-all in criminal investigations, particularly in health care fraud. To make a good case—any case—you need human source reporting. So, the aim of our new health care fraud ad campaign is three-fold: to increase awareness and educate the public about health care fraud, to enlighten them that it is something that affects each American individually and not some nebulous government problem, and finally, to give people a phone number and a face to talk to about it.” That phone number will be FBI Newark’s main number: (973) 792-3000.

Each advertisement targets a different audience. For example, one ad featuring a mother cradling an infant is targeted toward women and young parents: “Report health care fraud! It hurts more than the government and insurance companies.”

Another is geared primarily toward health care professionals and features an unidentified surgeon with a scalpel. Another targets the senior population—it features a picture of a bottle of medication with the caption: “There’s no magic pill to fix our health care system. Report health care fraud!”

Still another ad geared toward a more general and fiscal-minded group depicts an intravenous bag filled with blood dripping onto a pile of cash. The caption? “Report health care fraud! It’s bleeding our nation dry!”

Because of the FBI’s agreement with Clear Channel Outdoor, the exact cost of the program cannot be disclosed. The FBI can report, however, that the program is being paid for with HCF program funds from FBI Headquarters. “FBI research has shown that since 1997, for every dollar spent investigating HCF, $4.9 taxpayer dollars are recovered,” said Ward. (More recently, $6.8 dollars have been recovered for every $1 spent for the period of 2008 through 2010.) “Our purpose with this campaign is to generate an abundance of new leads. By coming to law enforcement with information about criminal activity, the public becomes a force multiplier. It’s almost as good as having an agent right there in the midst of the criminal activity. That alone will put criminals on alert and hopefully discourage the rampant theft from these programs.”

The program is scheduled to launch on Monday, July 25. Representatives from the FBI will be available to the press on location (at one of the malls featuring the ads) for comment on this endeavor. Contact Special Agent Bryan Travers at 973-792-3020 for information.