Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA673535
`ESTTA Tracking number:
`05/21/2015
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91206212
`Defendant
`entrotech, inc.
`LISA M. GRIFFITH
`FISH & RICHARDSON
`P O BOX 1022
`MINNEAPOLIS, MN 55440 1022
`UNITED STATES
`tmdoctc@fr.com, hickey@fr.com, martens@fr.com, dylan-hyde@fr.com, mor-
`ris@fr.com
`Defendant's Notice of Reliance
`Erin M. Hickey
`hickey@fr.com, ly@fr.com, reardon@fr.com, brenckman@fr.com, tm-
`doctc@fr.com, morris@fr.com
`/Erin M. Hickey/
`05/21/2015
`2015-05-21 Applicant's Notice of Reliance + Exhibits (Printed Materi-
`als).pdf(2294608 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`
`Signature
`Date
`Attachments
`
`

`
` 
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`
`In the matter of application Serial Nos.:
`
`
`85/499,349 for the mark CHLORADERM
`85/499,345 for the mark CHLORABSORB
`85/499,337 for the mark CHLORABOND
`85/499,332 for the mark CHLORADRAPE
`
`Filed on December 19, 2011
`Published in the Official Gazette on May 29, 2012
`
`
`
`
`
`
`
`
`
`
` Combined Opposition Proceeding No. 91-206,212
`
`
`
`
`
`
`
`
`
`CAREFUSION 2200, INC.,
`
`Opposer,
`
`v.
`
`
`
`
`
`
`ENTROTECH LIFE SCIENCES, INC.,
`
`Applicant.
`
`
`
`
`
`
`
`
`United States Patent and Trademark Office
`Trademark Trial and Appeal Board
`P.O. Box 1451
`Alexandria, Virginia 22313-1451
`
`
`
`
`
`
`APPLICANT’S NOTICE OF RELIANCE
`
`Pursuant to Rule 704.08(c) of the Trademark Trial and Appeal Board’s Manual of
`
`Procedure and 37 C.F.R. § 2.122(e), Applicant Entrotech Life Sciences, Inc. (“Applicant” or
`
`“Entrotech”) hereby notifies Opposer CareFusion 2200, Inc. (“Opposer” or “CareFusion”) of
`
`its reliance upon the following publicly available printed materials (identified as Exhibits I1 –
`
`I14):
`
`
`
` 
`
`

`
`Document
`
`Description
`
`URL
`
` 
`
`
`
`Exh.
`No.
`
`I1
`
`I2
`
`I3
`
`Annual Report of the
`DOH Health Care
`Fraud and Abuse
`Control Program
`FY 2014
`
`Report discussing the settlement,
`which resolved allegations that
`CareFusion paid kickbacks to the
`physician co-chair of the Safe
`Practices Committee at the National
`Quality Forum, a nonprofit
`organization that reviews, endorses,
`and recommends standardized
`health care performance measures
`and practices; and that CareFusion
`knowingly promoted the sale of
`ChloraPrep for uses that the FDA
`had not approved, some of which
`were not medically accepted
`indications, and made
`unsubstantiated representations
`about the appropriate uses of
`ChloraPrep.
`
`CareFusion
`Product Poster
`
`Poster showing use of
`CHLORAPREP mark
`
`ChloraPrep Safety
`Data Sheet
`
`Data sheet showing use of
`CHLORAPREP mark
`
`https://oig.hhs.gov/public
`ations/docs/hcfac/FY201
`4-hcfac.pdf)
`
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/ChloraPrep-1-mL-
`applicator-in-service-
`poster.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/ChloraPrep_Solutions
`_SDS_US.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/ChloraShield-
`brochure.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/Labels/IP_CHP-label-
`change-fact-
`sheet_FQ_EN.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/ChloraPrep_3mL_In-
`Service_Poster.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/ChloraPrep_10I5mL_I
`n-Service_Poster.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`
`I4
`
`ChloraShield Brochure
`
`Brochure showing use of
`CHLORASHIELD mark
`
`ChloraPrep Label
`Change Fact Sheet
`
`Fact sheet showing the ChloraPrep
`products (swabsticks, applicators,
`etc.) subject to the 2013 FDA
`requested label change
`
`ChloraPrep 3mL
`Applicator Poster
`
`CareFusion Product Poster –
`showing CHLORAPREP Products
`
`ChloraPrep 10.5mL
`Applicator Poster
`
`CareFusion Product Poster –
`showing CHLORAPREP Products
`
`ChloraPrep 26mL
`Applicator Poster
`
`CareFusion Product Poster –
`showing CHLORAPREP Products
`2
`
`I5
`
`I6
`
`I7
`
`I8
`
`
`
`

`
`Document
`
`Description
`
`URL
`
`ChloraPrep 26mL
`Applicator for Cesarean
`Section Poster
`
`CareFusion Product Poster –
`showing CHLORAPREP Products
`
`ChloraPrep brand
`Frepp 1.5 mL
`Applicator Poster
`
`ChloraPrep Sepp
`0.67mL Applicator
`Poster
`
`ChloraPrep swabstick
`1.75/5.25 mL
`Applicator Poster
`
`Trichlor-O-Cide®
`XP-160
`Packaging Insert
`
`ChlorCid®
`Packaging Insert
`
`CareFusion Product Poster –
`showing CHLORAPREP Products
`
`CareFusion Product Poster –
`showing CHLORAPREP Products
`
`CareFusion Product Poster –
`showing CHLORAPREP Products
`
`Packaging insert showing that
`Trichlor-O-Cide® XP-160 is a
`powdered, chlorinated, multi-
`purpose sanitizer.
`Packaging insert showing that
`ChlorCid® is an aqueous solution
`not exceeding 3.0% sodium
`hypochlorite with surfectants.
`
`on/ChloraPrep_26mL_In-
`Service_Poster.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/26mL_Cesarean_In-
`Service_Poster.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/IP_CP_FREPP_InSer
`vice.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/IP_CP_SEPP_InServi
`ce.pdf
`http://www.carefusion.co
`m/pdf/Infection_Preventi
`on/IP_CP_Swabstick_InS
`ervice.pdf
`http://chemstarworks.com
`/wp-
`content/uploads/2009/07/
`TrichlorOCideXP160.pdf
`
`http://www.ahrendental.c
`om/files/30304.5_chlorci
`d.pdf
`
` 
`
`Exh.
`No.
`
`I9
`
`I10
`
`I11
`
`I12
`
`I13
`
`I14
`
` 
`
`Applicant will rely upon these publicly available printed materials to establish:
`
`(1) that confusion between Applicant’s CHLORADERM, CHLORABSORB,
`
`CHLORABOND, and CHLORADRAPE marks at issue in this Opposition, on the one
`
`hand, and Opposer’s CHLORAPREP and CHLORASHIELD marks at issue in this
`
`Opposition, on the other hand, is not likely; (2) the dissimilarity of the marks at issue in
`
`this Opposition; (3) the dissimilarity of the goods at issue in this Opposition; (4) the
`
`dissimilarity of the channels of trade and marketing/advertising at issue in this Opposition;
`
`(5) the purchasing conditions and the sophistication of the purchasers of the goods at issue
`
`in this Opposition; (6) the weakness of Opposer’s CHLORAPREP and CHLORASHIELD
`
`
`
`3
`
`

`
` 
`
`marks; (7) the scope of Opposer’s use of its CHLORAPREP and CHLORASHIELD
`
`marks; (8) the co-existence in the marketplace of Opposer’s CHLORAPREP and
`
`CHLORASHIELD marks with other marks containing the letters “C-H-L-O-R” for goods
`
`relevant to this Opposition and relevant to the goods at issue in this Opposition; and (9) the
`
`reputation of Opposer in the industry.
`
`*****
`
`Respectfully submitted,
`
`FISH & RICHARDSON P.C.
`
`
`
`Dated: May 21, 2015
`
`
`
`
`
`
`
`
`
`
`Lisa M. Martens
`Erin M. Hickey
`P.O. Box 1022
`Minneapolis, MN 554400-1022
`Telephone: (858) 678-5070
`Facsimile: (858) 678-5099
`E-mail:martens@fr.com
`E-mail:hickey@fr.com
`
`Attorneys for Applicant,
`ENTROTECH LIFE SCIENCES, INC.
`
`4
`
`

`
`EXHIBIT I1
`
`EXHIBIT I1
`
`

`
`U.S. Department of Justice
`Office of the Attorney General
`
`U.S. Department of Health and Human Services
`Office of the Secretary
`
`Annual Report of the
`Departments of Health and
`Human Services and Justice
`
`Health Care Fraud and Abuse
`Control Program FY 2014
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`
`
`
`
`
`
`
`
`
`
`
`
`The Department of Health and Human Services
`
`and
`
`The Department of Justice
`
`
`Health Care Fraud and Abuse Control Program
`
`
`Annual Report for Fiscal Year 2014
`
`
`
`
`
`
`
`
`
`March 19, 2015
`
`
`
`
`
`
`
`
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`TABLE OF CONTENTS
`
`
`
`
`
`
`
`
`I.
`
`
`II.
`
` Executive Summary
`
`
`Introduction
`
`
`
`III. Monetary Results
`
`
`
`IV. Program Accomplishments
`Overall Recoveries
`Departmental Collaboration
`
`Health Care Fraud Prevention & Enforcement Action Team
`
`Health Care Fraud Prevention Partnership
`
`Medicare Fraud Strike Force
`
`Highlights of Successful Criminal and Civil Investigations
`
`
`
`
`
`V. Department of Health and Human Services
`
`
`Office of Inspector General
`
`
`Centers for Medicare & Medicaid Services
`
`Administration on Community Living
`
`Office of the General Counsel
`
`
`Food and Drug Administration Pharmaceutical Fraud Program
`
`
`
`VI. Department of Justice
`
`United States Attorneys
`
`Civil Division
`
`Criminal Division
`
`Civil Rights Division
`
`1
`
`3
`
`5
`
`8
`8
`8
`8
`9
`10
`22
`
`42
`42
`51
`63
`66
`69
`
`72
`72
`73
`76
`80
`
`86
`86
`89
`90
`
`
`91
`
`
`
`
`
`
`
`
`
`
`
`
`VII. Appendix
`
`Federal Bureau of Investigation
`
`
`Return on Investment Calculation
`
`
`Total HCFAC Resources
`
`
`
`
`VIII. Glossary of Terms
`
`
`
`
`
`
`
`
`
`
`GENERAL NOTE
`
`
`
`
`
` All years are fiscal years unless otherwise
`
`noted in the text.
`
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`
`
`EXECUTIVE SUMMARY
`
`
`
` The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established a national
` Health Care Fraud and Abuse Control Program (HCFAC or the Program) under the joint
`
`
` direction of the Attorney General and the Secretary of the Department of Health and Human
`
`
`
` Services (HHS)1, acting through the Inspector General, designed to coordinate Federal, state and
`
`
` local law enforcement activities with respect to health care fraud and abuse. In its eighteenth
`
`
`
` year of operation, the Program’s continued success confirms the soundness of a collaborative
`
`
` approach to identify and prosecute the most egregious instances of health care fraud, to prevent
`
`future fraud and abuse, and to protect program beneficiaries.
`
`Monetary Results
`
`
`During Fiscal Year (FY) 2014, the Federal government won or negotiated over $2.3 billion in
`
`
`
`health care fraud judgments and settlements2, and it attained additional administrative
`
`impositions in health care fraud cases and proceedings. As a result of these efforts, as well as
`
`
`those of preceding years, in FY 2014, approximately $3.3 billion returned to the Federal
`
`
`
`government or paid to private persons. Of this $3.3 billion, the Medicare Trust Funds3 received
`
`
`transfers of approximately $1.9 billion during this period, and over $523 million in Federal
`
`
`Medicaid money was similarly transferred separately to the Treasury as a result of these
`
`efforts. The HCFAC account has returned over $27.8 billion to the Medicare Trust Funds since
`
`
`the inception of the Program in 1997.
`
`Enforcement Actions
`
`
`In FY 2014, the Department of Justice (DOJ) opened 924 new criminal health care fraud
`
`
`investigations. Federal prosecutors filed criminal charges in 496 cases involving 805 defendants.
`
`
`
`A total of 734 defendants were convicted of health care fraud-related crimes during the year.
`
`
`
`
`Also in FY 2014, DOJ opened 782 new civil health care fraud investigations and had 957 civil
`
`
`health care fraud matters pending at the end of the fiscal year. In FY 2014, the FBI investigative
`
`
`
`
`efforts resulted in over 605 operational disruptions of criminal fraud organizations and the
`
`dismantlement of the criminal hierarchy of more than 142 health care fraud criminal enterprises.
`
`
`In FY 2014, HHS’ Office of Inspector General (HHS-OIG) investigations resulted in 867
`
`criminal actions against individuals or entities that engaged in crimes related to Medicare and
`
`Medicaid, and 529 civil actions, which include false claims and unjust-enrichment lawsuits filed
`
`in Federal district court, civil monetary penalties (CMP) settlements, and administrative
`
`
`recoveries related to provider self-disclosure matters. HHS-OIG also excluded 4,017 individuals
`
`
`
`
`
`
`
`
`
`1 Hereafter, referred to as the Secretary.
`
`
`2 The amount reported as won or negotiated only reflects the Federal recoveries and therefore does not reflect state
`
`
`
`Medicaid monies recovered as part of any global Federal-State settlements.
`
`3 Also known as the Medicare Hospital Insurance (Part A) Trust Fund and the Supplemental Medical Insurance (Part
`
`
`B) Trust Fund.
`
`
`
`1
`
`
`
`

`
`and entities from participation in Medicare, Medicaid, and other federal health care programs.
`Among these were exclusions based on criminal convictions for crimes related to Medicare and
`
`Medicaid (1,310) or to other health care programs (432), for patient abuse or neglect (189), and
`as a result of licensure revocations (1,744). HHS-OIG also issued numerous audits and
`evaluations with recommendations that, when implemented, would correct program
`
`
`vulnerabilities and save program funds.
`
`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`Sequestration Impact
`
`
`
`Due to sequestration of mandatory funding in 2014, there were fewer resources for DOJ, FBI,
`HHS, and HHS-OIG to fight fraud and abuses against Medicare, Medicaid, and other health care
`
`
`programs. A total of $31.5 million was sequestered from the HCFAC program in FY 2014, for a
`combined total of $62.1 million in the past two years.
`
`
`
`
`
`
`2
`
`
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`INTRODUCTION
`
`
`
`
`
`The Annual Report of the Attorney General and the Secretary detailing expenditures and
`
`revenues under the Health Care Fraud and Abuse Control Program for Fiscal Year 2014 is
`
`
`
`
`provided as required by Section 1817(k)(5) of the Social Security Act.
`
`
`
`
`
` Statutory Background
`
`
`
`
`
`
` The Social Security Act Section 1128C(a), as established by the Health Insurance Portability and
`
`
`
` Accountability Act of 1996 (P.L. 104-191, HIPAA or the Act), created the Health Care Fraud
`and Abuse Control Program, a far-reaching program to combat fraud and abuse in health care,
`including both public and private health plans.
`
`
`As was the case before HIPAA, amounts paid to Medicare in restitution or for compensatory
`
`
`damages must be deposited in the Medicare Trust Funds. The Act requires that an amount
`
`
`
`equaling recoveries from health care investigations – including criminal fines, forfeitures, civil
`
`
`settlements and judgments, and administrative penalties – also be deposited in the Trust Funds.
`
`
`The Act appropriates monies from the Medicare Hospital Insurance Trust Fund to an expenditure
`
`
`account, called the Health Care Fraud and Abuse Control Account (the Account), in amounts that
`
`
`the Secretary and Attorney General jointly certify as necessary to finance anti-fraud activities.
`
`
`The maximum amounts available for certification are specified in the Act. Certain of these sums
`
`
`are to be used only for activities of the HHS-OIG, with respect to the Medicare and Medicaid
`
`
`
`programs. In FY 2006, the Tax Relief and Health Care Act (TRHCA) (P.L 109-432, §303)
`
`amended the Act so that funds allotted from the Account are “available until expended.”
`
`TRHCA also allowed for yearly increases to the Account based on the change in the consumer
`
`
`
`
`
`price index for all urban consumers (all items, United States city average) (CPI-U) over the
`
`previous fiscal year for fiscal years for 2007 through 2010.4 In FY 2010, the Patient Protection
`
`
`
`
`
`and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act,
`
`collectively referred to as the Affordable Care Act (P.L. 111-148, ACA) extended permanently
`
`
`
`the yearly increases to the Account based upon the change in the consumer price index for all
`
`
`urban consumers, or CPI-U.
`
`
`In FY 2014, the Secretary and the Attorney General certified $278.1 million in mandatory
`
`
`
`
`funding to the Account after accounting for sequester reductions of $21.6 million to the total
`
`appropriation. Additionally, Congress appropriated $293.6 million in discretionary funding. A
`detailed breakdown of the allocation of these funds is set forth later in this report. HCFAC
`
`appropriations generally supplement the direct appropriations of HHS and DOJ that are devoted
`
`
`to health care fraud enforcement and funded approximately three-fourths of HHS-OIG’s
`
`
`
`
`4 The CPI-U adjustment in TRHCA did not apply to the Medicare Integrity Program (MIP). Section 6402 of the
`ACA indexed Medicare Integrity Program funding to inflation starting in FY 2010.
`
`
`
`3
`
`

`
`appropriated budget in FY 2014. (Separately, the FBI received $127.3 million from HIPAA—
`after accounting for $9.9 million in mandatory sequester reductions—which is discussed in the
`
`
`
`Appendix.)
`
`
` Under the joint direction of the Attorney General and the Secretary, the Program’s goals are:
`
`
`(1)
`
`
`
`
`
`
`
`
`to coordinate Federal, state and local law enforcement efforts relating to health care fraud
`
`and abuse with respect to health plans;
`
`
`
`(2)
`
`
`to conduct investigations, audits, inspections, and evaluations relating to the delivery of
`
`and payment for health care in the United States;
`
`
`
`(3)
`
`
`(4)
`
`
`
`The Act requires the Attorney General and the Secretary to submit a joint annual report to the
`
`
`
`Congress that identifies both:
`
`
`(1)
`
`
`
`the amounts appropriated to the Trust Funds for the previous fiscal year under various
`
`
`categories and the source of such amounts; and
`
`
`
`(2)
`
`
`
`
`
`the amounts appropriated from the Trust Funds for such year for use by the Attorney
`
`General and the Secretary and the justification for the expenditure of such amounts.
`
`
`
`This annual report fulfills the above statutory requirements.
`
`
`
`Additionally, this report fulfills the requirement in the annual discretionary HCFAC
`
`appropriation (Public Law 113-76 “Consolidated Appropriations Act, 2014”) that this report
`“include measures of the operational efficiency and impact on fraud, waste, and abuse in the
`
`
`Medicare, Medicaid, and CHIP programs for the funds provided by this appropriation.”
`
`4
`
`
`
`
`
`
`
`to facilitate enforcement of all applicable remedies for such fraud; and
`
`
`
`
`to provide education and guidance regarding complying with current health care law.
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`
`
`
`MONETARY RESULTS
`
`
`As required by the Act, HHS and DOJ must detail in this Annual Report the amounts deposited
`
` to the Medicare Trust Funds and the source of such deposits. In FY 2014, approximately
`$3.3 billion was deposited with the Department of the Treasury and CMS, transferred to other
`Federal agencies administering health care programs, or paid to private persons during the fiscal
`
`
`
`
`year. The following chart provides a breakdown of the transfers/deposits:
`
`
`
`Total Transfers/Deposits by Recipient FY 2014
`
`Department of the Treasury
`
` Deposits to the Medicare Trust Funds, as required by HIPAA
`
` Gifts and Bequests
`
`
`Amount Equal to Criminal Fines
`
`
`Civil Monetary Penalties
`
`
`Asset Forfeiture
`
`
`Penalties and Multiple Damages
`Subtotal
`
`
`
`
`
`
`
`
`102,159,881
`608,811,471
`710,971,352
`
`$1,911,038,671
`
`$23,393,642
`52,352,227
`11,194,863
`48,823,213
`13,902,582
`
`
`
`
`
`
`
`5
`
`
`
`Amount
`$7,117
`344,378,820
`23,559,109
`24,675,735
`807,446,537
`1,200,067,319
`
`
`
`
` Centers for Medicare & Medicaid Services
`
`
`
`
`
`
`HHS-OIG Audit Disallowances – Recovered - Medicare
`
`
`Restitution/Compensatory Damages
`Subtotal*
`
`
`
`Total of Amounts Transferred to the Medicare Trust Funds
`
`Restitution/Compensatory Damages to Federal Agencies
`
`
`
`
`TRICARE
`
`
`Department of Veterans Affairs
`HHS-OIG Cost of Audits, Investigations and Compliance Monitoring
`
`
`Office of Personnel Management
`
`Other Agencies
`
` Centers for Medicare and Medicaid Services
`
`522,788,332
`Federal Share of Medicaid
`
`
`
`
`358,696,627
`HHS-OIG Audit Disallowances – Recovered - Medicaid
`1,031,151,487
`Subtotal
`
`
` Relators= Payments**
`
`
` 369,178,807
`
`$3,311,368,964
`GRAND TOTAL ***
`
`
`
`*Restitution, compensatory damages, and recovered audit disallowances include returns to both the Medicare
`Hospital Insurance (Part A) Trust Fund and the Supplemental Medical Insurance (Part B) Trust Fund.
`
`**These are funds awarded to private persons who file suits on behalf of the Federal government under the qui tam
`
`
`
`
`
`
`
`(whistleblower) provisions of the False Claims Act, 31 U.S.C. ' 3730(b).
`
`
`
`
`
`***State funds are also collected on behalf of state Medicaid programs; only the Federal share of Medicaid funds
`
`
`
`
`transferred to CMS are represented here.
`
`
`

`
` The above transfers include certain collections, or amounts equal to certain collections, required
`
`
`
` by HIPAA to be deposited directly into the Medicare Trust Funds. These amounts include:
`
`
`
`
`(1) Gifts and bequests made unconditionally to the Trust Funds, for the benefit of the Account
`
`or any activity financed through the Account;
`
`
`
`(2)
`
`
`
`
`Criminal fines recovered in cases involving a federal health care offense, including
`
`collections under section 24(a) of Title 18, United States Code (relating to health care
`
`fraud);
`
`
`
`
`Civil monetary penalties in cases involving a federal health care offense;
`
`
`
`(3)
`
`
`
`
`
`(4) Amounts resulting from the forfeiture of property by reason of a federal health care
`
`offense, including collections under section 982(a)(7) of Title 18, United States Code; and
`
`Penalties and damages obtained and otherwise creditable to miscellaneous receipts of the
`
`
`general fund of the Treasury obtained under sections 3729 through 3733 of Title 31,
`
`United States Code (known as the False Claims Act, or FCA), in cases involving claims
`
`related to the provision of health care items and services (other than funds awarded to a
`relator, for restitution or otherwise authorized by law).
`
`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`
`
`(5)
`
`
`
`
`
`6
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`
`
` Expenditures
`
`In the eighteenth year of operation, the Secretary and the Attorney General certified
`
`
`
`
`
`$278.1 million in mandatory funding as necessary for the Program, after accounting for
`
`
`
`
`
`
`mandatory sequester reductions of $21.6 million as required by law. Additionally, Congress
`
`
`appropriated $293.6 million in discretionary funding. The chart below gives the allocation by
`
`
`
`recipient:
`
`
`FY 2014 ALLOCATION OF HCFAC APPROPRIATION
`
`
`
`
`
` Organization
`
`Mandatory
`Allocation5
`
`
`
`Discretionary
`
`Allocation
`
`
`Funds
`
`Sequester
`
`
`Total
`
`Allocation
`
`
`
`
` Department of Health and Human
`
` Services
`Office of Inspector General6
`
` Office of the General Counsel
`
`
` Administration for Community Living
`
` Food and Drug Administration
` Centers for Medicare & Medicaid Services
`
`
` Unallocated Funding
`
`
` Subtotal
`
`
` Department of Justice
`
` United States Attorneys
`
` Civil Division
` Criminal Division
`
` Civil Rights Division
`
` Nursing Home and Elder Justice Initiative
`
`
` Justice Management Division
`
` Department of Justice - Other
`
`
`
`
` Subtotal
` TOTAL7
`
`
`
`
`
`
`
`
`
`
`
`
`
` $199,330,986
`
` 13,000,000
`
` 6,590,974
`
` 2,288,504
`
` 13,500,000
`
` 2,744,960
`
` 237,455,424
`
` $28,122,000
`
`
`0
`
`0
`
`0
`
` 237,344,000
`
`0
`
` 265,466,000
`
`
`
`
`
`
`
`31,400,000
`
`
` 17,934,067
`
`2,418,072
`
` 2,376,000
`
` 1,000,000
`
` 200,000
`
` 6,908,482
`
`62,236,621
`
` $299,692,045
`
`9,332,010
`
`
` 8,213,107
`
`6,152,883
`
` 4,424,000
`
`0
`
`0
`
` 0
`
`28,122,000
`
` $293,588,000
`
`
`
` ($14,351,831) $213,101,155
`
` 13,000,000
`
`
`
` 6,590,974
`
`
` 2,288,504
`
`
` 250,844,000
`
` (2,744,960)
`
`0
`
` (17,096,791)
`
` 485,824,633
`
`
`
`
`
`
`40,732,010
`0
`
`
`
` 26,147,174
`
` 0
`
`
`
`8,570,955
`0
` 6,800,000
`
`
`0
`
` 1,000,000
`
`0
`
` 200,000
`0
`
`
` 2,427,445
`
` (4,481,037)
`
`
`85,877,584
`(4,481,037)
`
`
` ($21,577,828) $571,702,217
`
`
`
`
`
`
`
`
`5As of FY 2007, mandatory funds are available until expended. Discretionary funds are available for two years.
`
`
`
`
`
`
`6 In addition, HHS-OIG obligated $11.2 million in funds received as “reimbursement for the costs of conducting
`
`
`
`
`investigations and audits and for monitoring compliance plans” as authorized by section 1128C(b) of the Social
`
`
`
`Security Act, 42 U.S.C. § 1320a-7c(b).
`
`
`
`7Amounts only represent those that are provided by statute, and do not include other mandatory sources or
`
`
`
`
`discretionary appropriated sources provided through Departments’ annual appropriations.
`
`
`
`
`7
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`
`
` PROGRAM ACCOMPLISHMENTS
`
`
`
` Overall Recoveries
`
`
`
`
`
`
`
`
`During this fiscal year, the Federal government won or negotiated approximately $3.3 billion in
`
`judgments and settlements, and it attained additional administrative impositions in health care
`
`
`fraud cases and proceedings. The Medicare Trust Funds received transfers of approximately
`
`
`$1.9 billion during this period as a result of these efforts, as well as those of preceding years; and
`
`
`another $523 million in Federal Medicaid money was transferred to the Treasury separately as a
`
`result of these efforts. 8
`
`In addition to these enforcement actions, numerous audits, evaluations and other coordinated
`efforts yielded recoveries of overpaid funds, and prompted changes in federal health care
`
`
`programs that reduce vulnerability to fraud.
`
`The return on investment (ROI) for the HCFAC program over the last three years (2012-2014) is
`
`
`$7.70 returned for every $1.00 expended. This is $2 higher than the average ROI for the life of
`
`
`the HCFAC program since 1997 and the third highest ROI overall. Since the annual ROI can
`
`
`
`
`vary from year to year depending on the number and type of cases that are settled or adjudicated
`
`
`
`during that year, DOJ and HHS use a three-year rolling average ROI for results contained in the
`
`
`
`
`report. Additional information on how the ROI is calculated can be found in the Appendix.
`
`
`
`Departmental Collaboration
`
`
`Health Care Fraud Prevention & Enforcement Action Team (HEAT)
`
`
`
`The Attorney General and the Secretary maintain regular consultation at both senior and staff
`
`
`levels to accomplish the goals of the HCFAC Program. On May 20, 2009, Attorney General
`
`
`
`Holder and Secretary Sebelius announced the Health Care Fraud Prevention & Enforcement
`
`Action Team (HEAT), a new effort with increased tools and resources, and a sustained focus by
`
`
`
`
`
`
`senior level leadership to enhance collaboration between the Departments of Health and Human
`
`
`
`
`
`
`
`Services and Justice. With the creation of the new HEAT effort, DOJ and HHS pledged a
`
`
`
`Cabinet-level commitment to prevent and prosecute health care fraud. HEAT, which is jointly led
`by the Deputy Attorney General and HHS Deputy Secretary, is comprised of top level law
`
`
`
`enforcement agents, prosecutors, attorneys, auditors, evaluators, and other staff from DOJ and
`
`
`HHS and their operating divisions, and is dedicated to joint efforts across government to both
`
`
`prevent fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike
`
`
`Force teams are a key component of HEAT.
`
`
`
`
`
`
`8 Note that some of the judgments, settlements, and administrative actions that occurred in FY 2014 will result in
`
`
`
`transfers in future years, just as some of the transfers in FY 2014 are attributable to actions from prior years.
`
`
`
`
`
`
`
`8
`
`

`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`
`
` The mission of HEAT is:
`
`
`
`
`
`ｸ To marshal significant resources across government to prevent waste, fraud and
`
`
` abuse in the Medicare and Medicaid programs and crack down on the fraud perpetrators
` who are abusing the system and costing us all billions of dollars.
`
`
`
`
` ｸ To reduce skyrocketing health care costs and improve the quality of care by ridding
`
` the system of perpetrators who are preying on Medicare and Medicaid beneficiaries.
`
`
`
` ｸ To highlight best practices by providers and public sector employees who are
`
` dedicated to ending waste, fraud, and abuse in Medicare.
`
`
`
`
` ｸ To build upon existing partnerships between DOJ and HHS, such as our Medicare
`
` Fraud Strike Force Teams, to reduce fraud and recover taxpayer dollars.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Since its creation in May 2009, HEAT has focused on key areas for coordination and
`
`
`
`
` improvement. HEAT members are working to identify new enforcement initiatives and areas for
`
` increased oversight and prevention to increase efficiency in areas such as pharmaceutical and
`
` device investigations. DOJ and HHS have expanded data sharing and improved information
`
`
` sharing procedures in order to get critical data and information into the hands of law enforcement
`
`
` to track patterns of fraud and abuse and increase efficiency in investigating and prosecuting
`complex health care fraud cases. The departments established a cross-government health care
`
` fraud data intelligence sharing workgroup to share fraud trends, new initiatives, ideas, and success
` stories to improve awareness across the government of issues relating to health care fraud.
`
`
`
`
` Both departments also have developed training programs to prevent honest mistakes and help stop
`
`
`
` potential fraud before it happens. This includes CMS compliance training for providers, HHS-
`
` OIG’s HEAT Provider Compliance Training initiative, on-going meetings at U.S. Attorneys’
`
`
` Offices (USAOs) with the public and private sector, and increased efforts by HHS to educate
`
`
`
`
` specific groups – including elderly and immigrant communities – to help protect them. In
`
`
`
` addition, DOJ conducts, with the support of HHS, a Medicare Fraud Strike Force training
`
`
`
` program designed to teach the Strike Force concept and case model to prosecutors, law
`
`enforcement agents, and administrative support teams.
`
` Healthcare Fraud Prevention Partnership (HFPP)
`
`The Healthcare Fraud Prevention Partnership (HFPP) is the groundbreaking public/private
`
`partnership between the government and private sector insurance payers. The purpose of the
`
`
`partnership is to exchange data and information between the partners to help improve capabilities
`
`to fight fraud, waste and abuse in the health care industry. Current partners include the Federal
`
`
`
`Government (HHS-OIG, DOJ, FBI, and CMS), states, private plans and associations. Since its
`
`
`
`
`
`inception, the number of participants has increased to 37 public, private and state partner
`
`
`organizations. The Partnership has completed several studies associated with fraud, waste or
`
`abuse that have yielded successful results for participating partners. Studies have examined
`
`“False Store Fronts” or “phantom providers,” entity revocation/termination lists and top billing
`
`pharmacies. Additional studies are underway and the Partnership has established a Trusted Third
`
`Party (TTP) which conducts HFPP data exchanges, research, data consolidation and aggregation,
`
`
`
`
`
`
`9
`
`

`
` reporting, and analysis. The TTP will not share the source of the data (i.e., which partner
`
`
` submitted what data) during an exchange in order to keep the identity of the data source
` confidential. HFPP is continuing to expand with new partners.
`
`
`The Partnership is a demonstrated example of effective departmental collaboration between HHS
`
`
`
`and DOJ, working together to create a strong partnership with the states and private payers to
`
`
`detect fraud, waste, and abuse. In FY 2014, the Partnership hosted its fourth bi-annual Executive
`Board meeting. The meeting focused on developing a strategy to ensure the productivity
`
`
`of the Partnership and highlighted achievements and progress since the last meeting including
`
`data exchanges, information sharing, and partnership growth.
`
`
`
`
` zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
`
`Medicare Fraud Strike Force
`
`
`The first Medicare Fraud Strike Force (Strike Force) was launched in March 2007 as part of the
`
`
`
`South Florida Initiative, a joint investigative and prosecutorial effort against Medicare fraud and
`
`
`
`abuse in South Florida. The Strike Force is comprised of interagency teams made up of
`
`
`
`investigators and prosecutors that focus on