Government Collects $2.3 Billion From Health Care FCA Cases

The federal government collected $2.3 billion in fiscal year 2014 from health care-related False Claims Act (FCA) actions, the Department of Justice (DOJ) announced Nov. 20.

Health care recoveries accounted for a substantial portion of a total $5.69 billion recovered by the DOJ in FCA actions for FY 2014. The DOJ attributed the recovery, which marked the fifth consecutive year FCA recoveries from health care fraud exceeded $2 billion, to “the high priority the Obama Administration has placed on fighting health care fraud.”

The DOJ reported in December 2013 that FCA health care actions accounted for $2.6 billion in federal recoveries for FY 2013.

The $2.3 billion in health care FCA judgments and settlements only accounted for recoveries to the federal government; additional recoveries totaling “billions of dollars for consumers and state treasuries” also were achieved, the DOJ said. Acting Assistant Attorney General Joyce R. Branda said the “true significance” of the recoveries “is in the billions of dollars restored to the federal treasury.”

The DOJ reported that 713 qui tam FCA actions were filed in FY 2014, just below FY 2013 when 752 were filed. Qui tam actions represented almost $3 billion of total FCA recoveries in FY 2014 and included $435 million in relator awards—up from $345 million in FY 2013.

Of those FCA actions filed in FY 2014, there were 469 qui tam and 31 non-qui tam actions related to federal health care programs, according to the DOJ.

The vast majority of the $2.3 billion in FCA health care recoveries were the result of qui tam actions, accounting for $2.22 billion of the total. Health care relators in FY 2014 also recovered far more in qui tam actions where the government intervened, representing $332 million of the total health care relator awards of $342 million.

Pharmaceuticals, Hospitals Heavily Represented
Settlements involving pharmaceuticals constituted a large portion of the health care FCA recoveries. Notable actions included a $1.1 billion settlement with Johnson & Johnson in November 2013 for alleged illegal drug promotions and kickbacks involving the drugs Risperdal, Invega, and Natrecor. The $1.1 billion recovery was part of a larger $2.2 billion global settlement with Johnson & Johnson that also included settlement of $600 million in Medicaid claims from states and $485 million in criminal penalties.

Another notable recovery included a $116 million settlement with pharmacy supplier Omnicare announced June 25 for allegedly paying kickbacks to nursing homes as incentive to choose Omnicare as a pharmaceutical supplier. The Omnicare settlement also included an additional $8.2 million in state Medicaid recoveries.

Hospital settlements figured prominently in FCA recoveries in FY 2014 as well, with the largest being a $98 million settlement with Community Health Systems Inc. in August for alleged unnecessary inpatient admissions of federal health care beneficiaries.

Halifax Hospital Medical Center settled a prominent FCA action March 10 alleging Stark law violations from an employee whistle-blower for $85 million. Halifax allegedly violated the Stark law in its compensation packages to certain oncologists and neurologists by incorporating their referrals into their bonuses.

Two hospitals also were involved in settlements amid allegations of performing medically unnecessary coronary procedures on Medicare and Medicaid beneficiaries. King’s Daughters Medical Center paid $39 million to the federal government and $2 million to state Medicaid agencies in a settlement announced May 28. The DOJ announced a settlement with Saint Joseph Health System on Jan. 28 for $16.5 million.

Takeaway: The Department of Justice is continuing its aggressive pursuit of health care fraud, recovering $2.3 billion in 2014.

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