Daniel Levinson, inspector general of the U.S. Department of Health and Human Services (HHS) since 2004, is making the crackdown of Medicare and Medicaid fraud and waste the cornerstone of his agency’s mission.

As inspector general, Levinson is the senior official responsible for audits, evaluations, investigations, compliance initiatives and law enforcement efforts to combat fraud and abuse in Medicare, Medicaid and more than 300 other public HHS programs. He oversees approximately 1,700 professional staff members who work to create economy and efficiency in HHS programs.

“The warning should be unambiguously clear by now,” Levinson said in a September 2011 news release. “We will continue using the combined law enforcement might of Strike Forces around the country to combat health care fraud.”

The Office of Inspector General (OIG) reported savings or expected recoveries of $25.9 billion for fiscal year 2010 as a result of its fight against various abuses and waste in the health care system. According to the National Health Care Anti-Fraud Association (NHCAA), the financial losses due to health care fraud are in the tens of billions of dollars each year.

In September 2011, the government announced a nationwide takedown by Medicare Fraud Strike Force operations in nine cities that resulted in charges against 91 defendants, including doctors, nurses and other medical professionals. The allegations include participation in Medicare fraud schemes involving approximately $295 million in false billing. The cities targeted in the operation were Brooklyn, Baton Rouge, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami and Tampa.

The most common type of health care scam involves health care providers who intentionally bill Medicare or private insurance companies for services that were never performed or that were different from the services provided. Other examples of fraud include charging co-payments for preventive services covered by Medicare or encouraging unnecessary services, claiming Medicare requires them. These scams can involve only a few people or can be sophisticated operations with many participants, and can filter millions of dollars to doctors and providers through false claims and other fraudulent billing practices.

“Some have said that Levinson’s office should be focusing on larger False Claims Act cases that bring big settlements,” or have criticized the criminal cases as targeting the ‘low-hanging fruit,’ said Kirk Ogrosky, a partner at Arnold & Porter LLP and former head of the U.S. Department of Justice (DOJ) criminal health care enforcement unit, in an interview with The Medicare NewsGroup. But Ogrosky said he believes the deterrent impact alone of Levinson’s efforts are “staggering.”

The Medicare Fraud Strike Force team, composed of federal, state and local agents, is increasingly using technology to mine data, evaluate trends, and better analyze and target the oversight of HHS programs. To be sure, many analysts caution there is plenty more to do to detect fraud.

For example, an OIG report issued in November 2011 revealed that government subcontractors paid to detect fraudulent claims are using inaccurate and inconsistent data, making it difficult to actually root out those scamming the system. The report also found systemic failures by federal health officials to adequately supervise the contractors.

Still, most of the errors involving Medicare payments are the result of clerical errors, not providers gaming the system. Levinson testified in front of the U.S. House of Representatives in March 2011 about the agency’s focus on the wastefulness of improper payments.

“By reviewing medical records and other documentation associated with a claim, we identify services that are undocumented, medically unnecessary or incorrectly coded, as well as duplicate payments and payments for services that were not provided,” Levinson said during the House testimony.

In addition to reviewing medical documentation to determine the scope of improper payments for service, Levinson’s office investigates whether particular medical services are even necessary. In some cases, according to his testimony to the U.S. House, patients are charged significant co-payments for items or services they did not need. For example, his office reviewed claims for certain types of support surfaces used to prevent and treat bedsores and found that more than one in five claims were medically unnecessary.

Levinson, a lawyer by training, has spent much of his career in public service. He worked as deputy general counsel of the U.S. Office of Personnel Management and as general counsel of the U.S. Consumer Product Safety Commission. He also worked in state government as a judicial law clerk, in the U.S Congress as a chief of staff, and spent more than a decade in private law practice specializing in employment law and policy.

Levinson serves on the Government Accountability and Transparency Board, and sits on the Executive Council of the Council of the Inspectors General on Integrity and Efficiency, where he co-chairs its Committee on Inspection and Evaluation.

-- by Susan Pasternak for The Medicare NewsGroup