As part of the federal government’s increasing focus on issues of healthcare fraud, particularly in the Medicare space, the U.S. Department of Justice recovered $2.5 billion in settlements and judgments from False Claims Act Cases over the past year.
According to the DOJ, this is the ninth consecutive year that the organizations’ civil health care fraud settlements and judgments have exceeded $2 billion.
While the $2.5 billion number represents federal losses, the DOJ also said it also helped recover significant funds for state Medicaid programs
“Every year, the submission of false claims to the government cheats the American taxpayer out of billions of dollars,” Principal Deputy Associate Attorney General Jesse Panuccio said in a statement.
“In some cases, unscrupulous actors undermine federal healthcare programs or circumvent safeguards meant to protect the public health … The nearly three billion dollars recovered by the Civil Division represents the Department’s continued commitment to fighting fraudsters and cheats on behalf of the American taxpayer.”
The False Claims Act has its roots in groups trying to defraud the military during and after the Civil War and was significantly strengthened since 1986 when Congress increased incentives for whistleblowers to file lawsuits alleging false claims.
In healthcare, organizations across the industry were hit with False Claims cases including drug companies, medical device manufacturers, payer organizations and healthcare providers.
The single largest recovery over the past year was a $625 million settlement paid by drug wholesaler AmerisourceBergen to resolve a number of claims including that the company illegally repackaged injectable cancer drugs into pre-filled syringes and billing multiple doctors for individual drug vials.
The DOJ also brought cases against drug companies who increased drug prices by funding Medicare co-payments meant to serve as a check on healthcare costs.
In one instance, United Therapeutics Corporation paid $210 million over allegations that it illegally used a foundation to funnel co-pay obligations for Medicare patients taking its drugs. Pfizer paid nearly $24 million in a similar case, with the government alleging that the company raised the price of a cardiac drug called Tikosy by 40 percent over three months
One major case against Massachusetts-based medical device company Alere resulted in a $33.2 million settlement over allegations that it sold unreliable diagnostic devices meant to detect acute coronary syndromes, heart failure, drug overdose and other serious conditions.
On the provider side, the DOJ recovered $270 million from DaVita subsidiary HealthCare Partners Holdings for upcoding and providing inaccurate information to inflate Medicare Advantage payments.
Another major case was against former health system Health Management Associates which allegedly engaged in major Medicare fraud including illegal kickbacks to physicians for referrals, incorrect billing for observation and outpatient services and inflated facility fees.
When it comes to health plans, the government’s case against UnitedHealth Group over allegations that it knowingly obtained inflated risk adjustment payments for its Medicare Advantage beneficiaries is still ongoing.
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