Health care fraud dominated DOJ's false-claims recovery cases last year

The U.S. Justice Department obtained more than $5 billion in settlements and judgments from civil cases involving health care fraud and false claims against the government in the last fiscal year.

Health care fraud again was the leading source of the department’s False Claims Act settlements and judgments. Enforcement efforts restore funds to federal programs such as Medicare, Medicaid and TRICARE, the health care program for service members and their families. The largest False Claims Act settlements in the past year resulted from significant resolutions with prescription opioid manufacturers. Other areas where funds were recovered include:

Medicare Advantage Program. The department pursues plans and health care providers that manipulate the risk adjustment process by submitting unsupported diagnosis codes to make their patients appear sicker than they actually are. Sutter Health paid $90 million to resolve allegations that it knowingly submitted unsupported diagnosis codes for certain patient encounters, resulting in inflated payments to be made to the Medicare Advantage Plans and Sutter Health.

Unlawful kickbacks. Kickbacks in the health-care industry are pernicious because of their potential to subvert medical decision-making and increase health care costs. In addition to pursuing improper payments by drug manufacturers, the department resolved other schemes involving the willful solicitation or payment of illegal remuneration to induce the purchase of a good or service paid for by a federal health care program.

Electronic health records. Technology vendor Athenahealth Inc. paid $18.25 million to resolve allegations that it invited customers and prospective customers to lavish, all-expense-paid sporting, entertainment and recreational events to generate sales. Generic pharmaceutical manufacturers Taro, Sandoz and Apotex paid more than $400 million to resolve allegations that they paid and received compensation arrangements on price, supply and allocation of customers with other pharmaceutical manufacturers as part of a conspiracy to fix the price of certain generic drugs.

Unnecessary medical services. As in years past, the department resolved a number of matters in which providers billed federal health care programs for medically unnecessary services or services not rendered as billed.

Procurement fraud. In the past year, the department pursued a variety of fraud matters involving the government’s purchase of goods and services. In some cases, the department pursued allegations that government contractors falsified pricing data.

“Ensuring that citizens’ tax dollars are protected from fraud and abuse is among the department’s top priorities,” said Brian Boynton, acting assistant attorney general. “The False Claims Act is one of the most important tools available to the department both to deter and to hold accountable those who seek to misuse public funds.”