A Closer Look: Health Care Fraud Recoveries in 2015

In Fiscal Year 2015, the government, often with the assistance of private whistleblowers, recovered more than $3.5 billion using the False Claims Act to target companies and individuals who attempted to commit fraud and steal money from federal government programs.  We took a broad look at these recoveries a couple of weeks back, today we take a narrower focus: health care fraud.  We believe that looking at these cases can help people understand what sort of actions violate the FCA and encourage them to contact our whistleblowers’ law firm.  As the 2015 numbers show, the FCA works and individuals can play a major role in the fight against fraud targeting Medicare, Medicaid, and other vital government health care programs.

$1.9 Billion Recovered in Health Care Fraud False Claims Act Cases in 2015

According to the Department of Justice’s press release announcing the successes under the FCA in FY2015, $1.9 billion of the $3.5 billion recovered on behalf of the federal government last year came from the health care industry.  This makes the total health care fraud dollars recovered via the FCA since January 2009 nearly $16.5 billion.  Importantly, these numbers are limited to federal dollars returned to federal programs.  Quite often, health care fraud prosecutions include additional charges involving state programs and can include recoveries on behalf of these programs as well, especially when cases involve Medicaid which is a joint federal/state venture.

What companies were involved in the cases that resulted in 2015’s health care fraud recoveries (note: in most FCA settlements, allegations remain unproven)? Hospitals account for nearly $330 million of the 2015 FCA recoveries, including a case initiated by a nurse and a health care consultant claiming hundreds of hospitals implanted cardiac devices when Medicare rules did not support the use of the devices.  A number of the hospital cases involved alleged Stark Law violations, claims alleging inappropriate financial arrangements between hospitals and providers that may interfere with the provider’s medical judgment.  Additionally, some $96 million in settlements and judgments involved claims against the pharmaceutical industry, including allegations two drug companies underpaid rebates owed to the government under the Medicaid Drug Rebate Program.  Skilled nursing and other rehabilitation facilities were another major target of cases under the FCA in 2015.

One company involved in health care fraud claims in 2015 must be singled out. Two of the largest recoveries involved the same company, a provider of dialysis services.  The company settled both cases.  In one case, the company allegedly wasted federal money by improperly administering certain medications.  That case is particularly notable because, as Modern Healthcare notes, it resulted in the largest whistleblower-led settlement to date ($450 million) involving the FCA where the government chose not to get involved in the matter.  The company also paid $350 million to resolve allegations involving kickbacks to doctors for referrals.

Moving Ahead: Fighting Health Care Fraud in 2016 and Beyond

The FCA is special.  It relies upon honest, private citizens to help bring claims on the government’s behalf.  These individuals are entitled to a substantial reward if the government recovers money via settlement or judgment, with the precise sum varying depending on a number of factors including whether or not the government eventually takes over the prosecution.  While the financial reward is important (and justified), most whistleblowers are primarily motivated by the desire to do the right thing and to recover money wrongfully diverted from already strained government programs.

If you believe you’ve witnessed fraud on the government, call our office to speak with our experienced False Claims Act attorney.  Do not remain silent.  You can be part of the fight against fraud in 2016.

See Related Blog Posts:

Fiscal Year 2015 and the False Claims Act: Reviewing Another Successful Year

False Claims FAQ, Part One: Coverage and the Qui Tam Provision

(Image by Brian Turner)