Published Oct. 22, 2021
Key Findings
- Over 33,000 health care providers have been barred from federal health care programs since 2010 due to fraud, license revocation, convictions for felony drug crimes, patient abuse and neglect or other issues.
- Public health care fraud (e.g., Medicare or Medicaid fraud) are the most common cases leading to health care providers being excluded from federal health programs.
- The rate of health care providers being kicked out of federal health programs due to fraud or felony convictions has fallen in recent years after a peak in 2016.
- Nurses and nurses aides account for the vast majority of fraudulent or criminal behavior, compared to other types of health care providers.
Study Overview
Many people may confidently assume that the health care industry has at least its fair share of fraud and corruption. In fact, the Department of Health and Human Services Office of Inspector General conducted law enforcement actions resulting in charges against over 130 defendants for over $1.4 billion in alleged losses during a single six-week period of 2021 alone.
But how pervasive is the problem where you live?
To determine the degree to which health care corruption is happening in each state, we examined data from the Office of Inspector General’s List of Excluded Individuals and Entities (LEIE) from 2010 through September of 2021.
LEIE is a list of all health care providers – including individual doctors and nurses as well as entire medical facilities – that have been excluded from participating in federal health care programs such as Medicare and Medicaid due to at least one of the following infractions:
- Suspension, revocation or surrender of a medical license
- A conviction of fraud involving federal or non-federal health insurance
- A conviction of patient abuse or neglect
- A felony drug conviction
The exclusions are handed down by the Office of Inspector General and last for periods of typically three to five years in most cases before a potential reinstatement may be made. The data brings to life just how much corruption is happening, where it’s taking place and who is at fault.
Federal Health Program Penalties by State
The table below displays the number of federal health program exclusion penalties handed down in each state from 2010 to 2021, along with a breakdown of the types of violations that led to the exclusions.
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California had the most exclusions during the study period, with 3,866. That equates to approximately 336 per year, or nearly one per day. Florida was close behind with 3,505 provider exclusions.
Unsurprisingly, the states with the largest populations experienced the highest number of exclusions in most cases. But a few states stood out as having a high number of exclusions relative to their populations.
For example, Mississippi is only the 35th-most populated state but had the 14th-highest number of federal health program exclusions. Kentucky is the 26th-most populous state but accounted for the 13th-highest number of exclusions.
Other states with a high number of exclusions relative to population include Louisiana (25th-most populated; 11th-most exclusions) and Alabama (24th-most populated; 10th-most exclusions).
Most Common Causes for Federal Penalties
The primary reasons for health care providers being excluded from federal health programs varied by state.
- In Alaska, 88% of the state’s provider exclusions during the study period were due to fraud convictions involving federal health insurance programs such as Medicare and Medicaid, while less than 2% of the state’s exclusions were due to fraud involving private or non-federal health insurance.
- 22% of the exclusion penalties in Indiana were due to fraud convictions related to private or non-federal health insurance (the highest share in the U.S. for this type of fraud).
- In New Hampshire, 79% of all exclusions were due to a health care provider losing their medical license. But in West Virginia, only 3.5% of the exclusions were due to such an infraction.
- Most of West Virginia’s infractions involved fraud related to federal health insurance programs (59%), but the state was notable for registering the highest percentage of exclusions due to federal drug convictions (19%).
- In Washington D.C., half of all exclusions were due to patient neglect and abuse, while 41% of Delaware’s exclusions were for the same reason.
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The City in Each State With the Highest Number of Exclusion Penalties
The table below shows the city in each state with the highest number of exclusion penalties during the study period.
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While a state’s most populated city tops this list for most states, there are a number of notable exceptions.
For instance, the highest number of exclusion penalties in North Carolina does not belong to the largest city of Charlotte or the state capital of Raleigh. Nor does it belong to Durham or Chapel Hill, both major players in the state’s health care system. Rather, it belongs to Butner, a town of roughly 8,000 people that wasn’t incorporated until 2007.
Other standout cities include Aliceville, AL (the 203rd-largest city in Alabama), Folkston, GA (which is 90 times smaller than Atlanta), Ayer, MA (which has 675,000 fewer residents than Boston), and Fort Dix, NJ, an Army base located in the middle of the state.
Corruption Cases by Type of Provider
By far, the most federal penalties handed down by the government were to nurses and nurse aides, who accounted for more exclusions than all other types of health care providers combined. One contributing factor to note is that there are far more nurses than other types of providers, with nearly 3 million registered nurses as of May 2020.1
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Certain specialties stand out as having a high number of exclusion penalties relative to the size of the practice. For instance, pharmacists and dentists had a similar number of exclusions during the study period despite there being roughly three times as many pharmacists than dentists in America as of May 2020.1
Meanwhile, 28 percent more chiropractors than pharmacists were punished with federal health program exclusions since 2010, despite there being roughly one tenth as many chiropractors as pharmacists. 1
A Timeline of Health Care Corruption
As you can see from the chart below, corruption cases in health care spiked in the mid 1990’s, which coincided with a number of key moments in the industry’s history.
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The software boom of the 90’s set off a digital revolution for health care, as providers widely adopted electronic medical records (EMR). An era of new opportunities for health care fraud and corruption was ushered in.
HIPAA was signed into law in 1996, but the compliance dates and key provisions safeguarding against crime weren’t fully implemented until the mid-2000’s.
Conclusion
A high number of health care providers across a wide range of specialties are excluded from participating in federal health insurance programs due to several key types of federal health care violations. Certain states, cities and specialties display higher rates of corruption than others relative to population or industry size.
Methodology
The data for this report comes from the U.S. Department of Health and Human Services OIG LEIE Database. Exclusion dates included in this analysis are from 2010 to September 2021 (the most recent data available).
According to the OIG, an exclusion refers to “individuals and entities that are excluded from federally funded health care programs for a variety of reasons.” We examined both mandatory and permissive exclusions for this project.
“Health Care Federal Program Conviction” refers to convictions of fraud related to federal health programs such as Medicare, Medicaid, SCHIP or other state health care programs.
1U.S. Bureau of Labor Statistics (BLS). (March 31, 2021). May 2020 National Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
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