The Department of Justice recouped $2.3 billion in health care fraud and false claim settlements in fiscal 2014, down from $2.6 billion last year.
The retrieval brings the government’s total False Claims Act (FCA) recoveries to $14.5 billion from 2009 to 2014, according to a November announcement by the Justice Department.
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The pharmaceutical, hospital, and home health service industries accounted for a substantial part of the 2014 health fraud recoveries with physician kickbacks playing a large part in many of the alleged schemes. Health care entities that paid significant health fraud settlements and judgments in 2014 included:
• Johnson & Johnson (J&J) and its subsidiaries, Janssen Pharmaceuticals and Scios, which paid a $1.1 billion settlement to resolve FCA claims relating to the promotion of three prescription drugs for unapproved uses. The drug promotions resulted in the submission of false claims against Medicare, Medicaid, and TRICARE by physicians. The Justice Department alleged also that J&J paid kickbacks to physicians and to Omnicare, a provider of pharmaceuticals to nursing homes.
• In a separate settlement, the department recovered $116 million from Omnicare to resolve allegations of a kickback arrangement with skilled nursing facilities.
• Community Health Systems, the nation’s largest operator of acute care hospitals, paid the government $98.2 million to settle allegations that it billed Medicare, Medicaid, and TRICARE for inpatient services that should have been provided in a less costly outpatient setting.
• Halifax Hospital Medical Center paid $85 million to resolve allegations of improper financial relationships with referring physicians.
• In a trio of cases involving cardiac procedures, Boston Scientific, which purchased Guidant, paid $30 million to settle claims that Guidant sold defective heart devices to physicians who implanted them into Medicare patients. Two Kentucky hospitals King’s Daughters Medical Center and Saint Joseph Health System, paid the government a combined $55 million for allegedly billing Medicare and Medicaid for unnecessary coronary procedures that were performed on patients.
The FCA is the government’s primary civil remedy to redress false claims for government funds and property under government contracts. Most FCA actions are filed under the act’s whistle-blower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistle-blower receives up to 30% of the recovery.
The $2.3 billion in health care fraud recoveries were part of an overall $5.7 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal year 2014. Of the $5.7 billion recovered, nearly $3 billion involved lawsuits filed under the FCA’s qui tam provisions. During the same period, the government paid out $435 million to the whistle-blowers who filed qui tam complaints.
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