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Why do we need to rethink the approach to fighting health care fraud?

Why is fraud, waste, and abuse different in health care? This video explains why health care is different and why a new approach to eliminating health care fraud by the Inspector General for the Department of Health and Human Services is needed.

The Real Cost of Health Care Fraud

How much is lost to health care fraud, waste, and abuse annually compared to how much is recovered? Are we making progress? This video shows that the real cost of health care fraud to the American taxpayer far exceeds fraud recoveries. We need to shift the focus to eliminating health care fraud.

What Motivates Health Care Fraud?

Fraud is certainly motivated by greed at some level. But for health care providers facing repeated cuts to reimbursement, there is actually another motivation that can be more powerful, and deceptive.

3 Ways to Accelerate DOGE Efforts by Eliminating Health Care Fraud, Waste, and Abuse

The Department of Government Efficiency, DOGE, has set a goal of reducing $1 Trillion in fraud, waste, and abuse in the Federal government. According to estimates, fraud, waste, and abuse in Federal health care programs alone accounts for more than $100 Billion. Eliminating health care fraud, or a majority of it, will accelerate DOGE efforts towards the $1 Trillion goal by potentially 10%! Here are 3 quick steps toward eliminating health care fraud, waste, and abuse:

1. Create a specifically defined HHS reporting program that does not require attorney representation focused on quick, direct action to financially reward whistleblowers within 6 months of submitting a fully developed health care fraud complaint.

2. Make HHS data available to help the public identify fraudulent billing to expand the investigative resources of HHS and serve as a deterrent to health care providers.

3. Expand the use of exclusion authority for individuals and entities that have disregarded their contractual obligation to CMS, i.e., failing to have an effective compliance program.

These steps will unlock savings from fraud, waste, and abuse in Federal health care programs without reducing Medicare and Medicaid benefits. Moreover, the message of eliminating healthcare fraud, waste, and abuse will squarely align the Administration with the desires of the American people.

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The 10-Step Plan

Open letter to health care providers published on Day 1 to announce (1) 30-day self-report grace period for repayment of overpayments without penalties and (2) strict enforcement at the end of the 30-day period.
Use the existing exclusion authority to increase the number of exclusions.
Focus OIG staff on health care industry segments.
Transition the Advisory Opinion Process to a weekly publication of guidance for each segment of the health care industry.
Increase focus on Compliance Program Effectiveness by clearly identifying the two teams: (1) The team that values compliance, continually emphasizes the compliance message, and the effectiveness of the compliance program is continually evaluated; and (2) The team that either does not have a compliance program or does not invest any effort in documenting the effectiveness of the compliance program. Reward those on Team 1 and impose stronger penalties, including exclusion, on Team 2.
Refocus investigation methods to distinguish between Fraud by cheaters and mistakes that result from well-intentioned, but incorrect regulatory interpretations.
Focus the power of the Division of Data Analytics (DDA) to identify and root out suspected fraudulent billing schemes.
Improve partnership with CMS to cooperatively eliminate fraudulent billing schemes instead of merely identifying CMS overpayments.
Partner with Industry leaders from each health care segment to identify challenges in complying with regulations and to define how they can rebuild trust between industry and regulators.
Establish working groups with health care and compliance associations to identify how the health care industry can help police itself and how OIG can help support those efforts.

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Why I wanted to be the Inspector General

When I started this website, I wanted to be the Inspector General for the Department of Health and Human Services, but it was a longshot to be sure. I created this video directed to Secretary Kennedy as a message why I should be his Inspector General.

Alas, the President nominated someone for the position and I wish him great success. At this point, I would like to help assist his efforts to fight fraud, waste, and abuse in the Federal health care system. I am keeping this video up to help s

Overview

The Office of Inspector General (OIG) of the Department of Health and Human Services (DHHS) is responsible for ensuring the integrity of Federal health care programs through compliance monitoring of the individuals and entities that bill Federal health care programs. I have been in healthcare compliance for almost 30 years and I have never had political aspirations and I have no political connections. In the world of politics, I am an outsider’s outsider. However, we are in a unique moment in history where the political landscape has shifted to a focus on identify and eliminating the fraud, waste, and abuse in government, and that includes the health care system.

$100 Billion lost to fraud, waste, and abuse

The Department of Justice estimates that health care fraud, waste, and abuse may account for as much as 10% of all health care expenditures, which now exceed $1 trillion annually. This could be up to $100 billion lost to fraud, waste, and abuse each year![1] I have worked as a compliance officer and consultant for many segments of the health care industry. I have seen individuals and organizations continue to rip off Federal health care programs, and by extension the taxpayer, through cleverly concocted fraudulent financial and billing schemes. All the while the people entrusted to eliminate this fraud, though well-intentioned, do not have the laser focus or operational knowledge of healthcare organizations to effectively target and eliminate these fraud schemes. Moreover, current efforts to “eliminate fraud, waste, and abuse” ultimately result in reduced reimbursement rates which, ironically, further encourage providers to agree to participate in these schemes because they are trying to maintain a financial lifestyle despite reimbursement cuts. My experience has led me to this point; I know the schemes, I understand the motivations, and most importantly, I know how to target and attack the fraud problem in the health care system.

[1] - https://www.justice.gov/archives/jm/criminal-resource-manual-976-health-care-fraud-generally

Experience, Insight, and Motiviation

I have been a Chief Compliance Officer and consultant for various segments of the health care industry. I have used my experience to teach other compliance professionals through my faculty position on the Health Care Compliance Association’s Compliance and Privacy Academies for almost 15 years. In addition, I have spoken at national and regional conferences on health care compliance, including presentations with attorneys from the Office of Inspector General’s Office of Counsel. I will bring my experience to the Office of Inspector General to protect taxpayer money invested in Federal health care programs by reducing fraudulent health care expenditures through the identification and elimination of fraud schemes and exclusion of those who participate in them. Simply stated, I will find those who are defrauding the health care system, destroy their fraud schemes, and prevent them from stealing again.

More Information About Darrell

Browse through articles that I have written in recent years, my current Curriculum Vitae, and a presentation on compliance enforcement that I did at the American Bar Association Health Care Fraud Institute with Greg Demske.

Darrell Contreras Curriculum Vitae (Updated February 2025) (pdf)

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Enforcement and Compliance in Laboratory Services (May 2024) (pdf)

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Article - The lab rental space sham (August 2024) (pdf)

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Article - Ice cream, passwords, and building a culture of compliance (November 2023) (pdf)

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Article - A simple revolution: Rethinking an effective code of conduct (June 2020) (pdf)

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