The government recovered $3B in fraud last year. Nearly 90% was from healthcare

By | January 11, 2020

Of more than $ 3 billion recovered by the federal government in fiscal year 2019 from fraud and false claims, 87% involved the healthcare industry, the Department of Justice announced Thursday.

It’s the 10th consecutive year the department has recouped more than $ 2 billion from False Claims Act cases with HHS as a client. By comparison, the Department of Defense accounted for more than $ 252,000 in recaptured funds, and other agencies just $ 197,000.

The government has strengthened its attempts to crack down on fraud over the past decade, establishing groups like the Medicare Fraud Strike Force in 2007 and the Opioid Fraud and Abuse Detection Unit in 2017. As healthcare fraud continues to rise (the DOJ reported 247 new matters for potential investigation in 2000, 427 in 2010 and 505 last year), the government has recovered more taxpayer dollars in stings, settlements and guilty verdicts.

Two of the biggest recoveries came from opioid manufacturers amid the ongoing crackdown on improper prescribing that gave rise to the opioid crisis, which has claimed more than 200,000 lives since 1999, according to the CDC.

Insys Therapeutics shelled out $ 195 million in June to settle claims it gave doctors illegal kickbacks for prescribing its powerful opioid painkiller Subsys and Reckitt Benckiser Group paid $ 1.4 billion in July over misleading marketing and price fixing for its addiction treatment drug Suboxone in two of the largest False Claims Act cases.

The latter was the largest recovery in an opioid-related case in U.S. history.

In other major cases for the federal government, drugmakers Actelion, Amgen, Astellas, Alexion, Jazz, Lundbeck and US Worldmeds paid a combined $ 624 million to settle allegations they illegally paid patient co-pays for their own drugs through seemingly independent foundations as an end run around pricing limitations.

But pharmaceutical companies weren’t the only ones slapped on the wrist for such behavior, with DOJ repossessing significant funds from a variety of parties in the fiscal year ending Sept. 30.

Rebecca Pifer/Healthcare Dive, data from the U.S. Department of Justice

Laboratory Inform Diagnostics, for example, paid almost $ 64 million in January last year to settle allegations it gave referring physicians kickbacks in the form of subsidies for EHR systems and other tech services. One month later, EHR vendor Greenway Health shelled out more than $ 57 million over misrepresenting its product’s capabilities and paying clients to talk it up to prospective customers.

Encompass Health — the nation’s largest operator of inpatient rehabs — settled up with the DOJ to the tune of $ 48 million in June, resolving allegations it lied to Medicare for higher reimbursements.

The $ 2.6 billion total price tag for healthcare recoveries only includes federal losses, the DOJ said, noting it also recovered millions of dollars for state Medicaid programs in 2019.

Since 1986, when Congress strengthened the False Claims Act by allowing whistleblowers to get up to 30% of the recovered funds, the DOJ has recouped more than $ 62 billion. Of that total, $ 42 billion has been from the healthcare industry.

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