What Data Says About Health Care Fraud

As of 2022, health care spending in the U.S. alone was $4.5 trillion. A year later, in 2023, it had spiked to $4.9 trillion, while Medicare and Medicaid grew to be 39% of national health spending in the U.S. (totaling $1.9 trillion). In 2022, an estimated 89.5 million visits were made by adults to health centers in the U.S. As of 2019, the uninsured younger than 65 years old are estimated to be 24.7 million. There are 5,200 hospice agencies providing end-of-life care in the U.S. and 70% are for-profit entities.

The numbers are staggering—and sobering. Health care accounts for nearly 17% percent of the gross domestic product of the U.S.; in other countries, such as Canada and the United Kingdom, it is several points lower, according to the Organization for Economic Cooperation and Development (OECD). Estimates of fraud, waste and abuse in this industry range from a conservative 3% to a more expansive 10%. Regardless of the actual figure, health and medical spending is astronomic and will likely continue to grow as the population continues to age and live longer, medical science advances and people avail themselves of treatment options. This article describes some of the statistical information available from reputable sources to examine this type of fraud by the numbers. 

The ACFE’s Report to the Nations 

The Association of Certified Fraud Examiners (ACFE) has conducted its global Report to the Nations study 13 times since 1996 to calculate the impact of fraud and occupational abuse. Health care fraud has remained a steadfast leader in this area. In 2024, the median loss for health care fraud cases observed in the study was an astounding $100,000.  

While the median amount of loss has had its ups and downs over the years, likely due to the variation in cases encountered and submitted by Certified Fraud Examiners (CFEs), what is more significant is the amount of the mean (or average) loss. Average losses have only been captured since 2014, but they provide a stunning depiction of the potential amount of fraud that impacts health care. The 2024 report shows that the average loss was nearly three-quarters of a million dollars ($721,000); in 2018, the average loss was $1.9 million per case. 

Here is a summary of the median and mean losses in health care for the past few years: 

Federal Sentencing Statistics and How to Build a Case for Prosecution 

The U.S. Sentencing Commission (USSC) publishes periodic reports on a variety of topics related to federal offenses. Of course, these cases are only those able to be fully investigated, prosecuted and adjudicated to sentencing—often a heavy lift given the limited resources of federal law enforcement and prosecutors. However, they give a glimpse into some of the most interesting pieces of data regarding health care fraud. 

In August 2024, the USSC published a summary of health care fraud cases in the federal system. For fiscal year (FY) 2023, health care offenses constituted a 4.2% increase since FY 2019; FY 2023 saw 447 cases of health care fraud sentenced.  

The USSC reported health care fraud median loss was $1,416,231, very similar to the amount figured in the 2020 Report to the Nations ($1.5 million). They noted that nearly 25% of the cases involved loss amounts of less than $250,000, while almost 5% were more than $9.5 million.   

Key data points for fraud examiners to also consider are the factors that go into sentencing enhancements—the conduct that goes towards a higher sentence. For health care cases, these include: 

• Conviction of a federal health care program offense (Medicare, Medicaid, TRICARE, CHAMPUS or the Veterans Health Administration) with a loss of more than $1 million. 
• Abusing a public position of trust or using a special skill (being a physician is typically a ‘special skill’ for purpose of this enhancement). 
• A leadership or supervisory role in the offense, typically involving co-conspirators or others, such as unwitting clinic or hospital staff. 
• The number of victims or the extent of harm to victims.
• Using sophisticated means to execute or conceal the offense (including offshore transactions, multiple entities, etc.). 

Fraud examiners should always be alert to these types of enhancements, since they can be essential to securing a prosecutor’s interest in a criminal case, or additional conduct that would be relevant in civil litigation. 

False Claims & Qui Tam Litigation 

During the U.S. Civil War (1861-1865), Congress found that price gouging and profiteering were prevalent, as were those who provided goods that were substandard. The False Claims Act (FCA) of 1863 targets fraud against government programs and includes a 'qui tam' provision, allowing private citizens to sue on behalf of the government and receive part of the settlement. The FCA has been updated and amended since its inception, but the specifics are beyond the scope of this article. Since 1987, the U.S. Justice Department has compiled statistics on FCA actions, judgments and settlements, and they share with those who filed the actions (called “relators”). 

The statistics are updated yearly, and for FY 2024, 85 new FCA health care fraud matters were filed (typically by the government itself), and another 370 health care FCA qui tam cases were filed. That amount is up from FY 2023, which had 349 new health care qui tam matters filed. Health-related qui tam cases also generated $1.2 billion in settlements and judgments in those cases where the federal government intervened (meaning they took over the case). Cases where the U.S. government declined to intervene generated settlements of $189 million for FY 2024.  

Since 1987, the FCA has generated more than 11,000 cases with settlements of more than $54 billion in health care recoveries alone—a massive savings for taxpayers, allowing the recovery of ill-gotten gains by fraudsters.  

Other Sources of Statistics 

Due to the sprawling nature of health care delivery, there are numerous sources of information that may be of interest to fraud examiners, especially those during fraud awareness presentations or training to staff, contractors and other professionals. These include: 

• Federal Government Made $236 billion “Improper Payments” Last Fiscal Year | U.S. GAO. 
• Health Care Fraud and Abuse Control Program Report (Fiscal Year 2023). 
• HHS OIG’s Fall 2024 Semiannual Report to Congress.
• Medicaid Fraud Control Units (MFCUs) – State reports and inspections. 

All of these figures, and many more, add to the growing picture of health care—and fraud—that CFEs, auditors, investigators and executives need to be mindful of when crafting anti-fraud programs, policies and cultures across the spectrum of care delivery and administration.