The Department of Justice (DOJ) received $1.8 billion in recoveries involving healthcare fraud and false claims in fiscal 2020, officials announced.
The recoveries involved all sectors of the industry including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories and physicians. The settlements are part of $2.2 billion the government recovered from False Claims Act cases across all industries in the fiscal year ending Sept. 30, 2020.
Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $64 billion.
The department’s health care fraud enforcement efforts restore funds to federal programs such as Medicare, Medicaid, and TRICARE, the health care program for service members and their families.
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“Even in the face of a nationwide pandemic, the department’s dedicated employees continued to investigate and litigate cases involving fraud against the government and to ensure that citizens’ tax dollars are protected from abuse and are used for their intended purposes,” said Acting Assistant Attorney General Clark in a statement.
Among the most notable healthcare recoveries in 2020:
One of the largest opioid-related recoveries this past year was from Practice Fusion, Inc., a health information technology developer that accepted kickbacks from the opioid manufacturer Purdue Pharma, the Justice Department said. The kickbacks were in exchange for implementing clinical decision support alerts in Practice Fusion's electronic health records (EHR) software designed to increase prescriptions for OxyContin, and caused its users to submit false claims for federal incentive payments by misrepresenting the capabilities of its EHR software. The $145 million Practice Fusion settlement reflects that complex EHR-related fraud schemes remain a focus of the DOJ's work, the department said.
Following years of litigation and multiple unsuccessful attempts to have the government’s claims dismissed, Novartis Pharmaceuticals Corporation paid over $591 million to resolve claims that it paid kickbacks to doctors to induce them to prescribe its drugs.
Two pharmaceutical manufacturers—Novartis and Gilead Sciences—paid a combined total of over $148 million to resolve claims that they illegally paid patient copays for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits for these payments.
The Justice Department also 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. ResMed Corp., a durable medical equipment manufacturer, agreed to pay more than $37 million to resolve allegations that it paid kickbacks to suppliers, sleep labs and other health care providers.
The Oklahoma Center for Orthopaedic and Multi-Specialty Surgery, a specialty hospital in Oklahoma City, its part-owner and management company, an orthopedic physician group, and two physicians agreed to pay a total of over $72 million to resolve allegations that the hospital provided improper remuneration to the physician group in exchange for patient referrals.
UTC Laboratories Inc. (RenRX) agreed to pay $41.6 million, and its three principals agreed to pay $1 million, to resolve allegations that they paid kickbacks in exchange for laboratory referrals for pharmacogenetic testing and for furnishing and billing for tests that were not medically necessary.
Universal Health Services paid $117 million to resolve allegations that its inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities knowingly submitted false claims for inpatient behavioral health services that were not reasonable or medically necessary or failed to provide adequate and appropriate services to its patients.
RELATED: ResMed to pay more than $37.5M to settle kickback allegations made in 5 whistleblower lawsuits
Of the $2.2 billion in settlements and judgments reported by the government in 2020, over $1.6 billion arose from lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. During the same period, the government paid out $309 million to the individuals who exposed fraud and false claims by filing these actions.
The government also held individuals accountable with senior executives or owners paying a portion of the settlement amount. For example, following a $260 million settlement with Health Management Associates, the department negotiated a $4.25 million civil settlement with Glenn A. Kline, D.O. and his surgical practice, Community Surgical Associates, to resolve civil allegations relating to illegal kickbacks received from two hospitals formerly operated by HMA.
There are also several pending recoveries involving high-profile fraud cases. In October 2020, the Justice Department reached a resolution with Purdue Pharma that provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim of $2.8 billion to resolve allegations arising from its conduct in promoting and unlawfully inducing prescriptions of opioids. The settlement remains contingent on the inclusion of certain conditions in a chapter 11 plan of reorganization.
Under a separate civil settlement, individual members of the Sackler family agreed to pay the United States $225 million arising from their alleged conduct in intensifying marketing efforts directed toward extreme, high-volume prescribers.