DOJ recovers $5.6B in FCA Settlements/Judgments

The U.S. Department of Justice (DOJ) recently announced it had taken in more than $5.6 billion in False Claims Act (FCA) settlements and judgments in the fiscal year ending Sept. 30, 2021. That’s the second largest annual total in the history of the FCA and the largest in seven years. In FY 2020, DOJ’s recoveries only totaled $2.2 billion.

Healthcare fraud once again was the number one source with more than $5 billion in monies recovered from drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

Opioid Fraud

The largest FCA settlements in the past year resulted from resolutions with prescription opioid manufacturers. Among them, Indivior companies agreed to pay $209.3 million to resolve allegations that the companies, among other things, promoted the opioid-addiction-treatment drug Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and were often diverted; and made false and misleading claims that Suboxone was less susceptible to diversion and abuse and to accidental pediatric exposure than other buprenorphine products.

Medicare Advantage Fraud

Another investigative priority for DOJ has been matters related to the Medicare Advantage program or Medicare Part C. DOJ has gone after insurers and healthcare providers that manipulated the risk adjustment process by submitting unsupported diagnosis codes to make their patients appear sicker than they were. Among them were Sutter Health which 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.

Kickbacks

Kickbacks have been a real thorn in the side of the government and resulted in significant recoveries last year. For example, the mail-order diabetic testing supply company Arriva Medical LLC and its parent, Alere Inc., agreed to pay $160 million to settle allegations that Arriva paid kickbacks to Medicare beneficiaries by providing them “free” or “no cost” diabetic testing glucometers and by routinely waiving or not making reasonable efforts to collect their copayments for glucometers and diabetic testing supplies.

In another case, we wrote about, about DOJ resolved its claims against pain management clinics and urine drug testing (UDT) laboratories owned and operated by Daniel McCollum for paying unlawful kickbacks to providers to induce their referrals of urine drug tests, obtaining default judgments against the clinics and laboratories totaling more than $140 million and a $9 million civil consent judgment against McCollum.

And, as we wrote about last February, electronic health records (EHR) technology vendor Athenahealth Inc. paid $18.5 million to resolve allegations that it invited customers and prospective customers to lavish all-expense-paid sporting, entertainment, and recreational events to generate sales of its EHR product.

Unnecessary Medical Services

The government recovered millions of dollars from providers who billed federal healthcare programs for medically unnecessary services or for services billed but never provided. Among them: SavaSeniorCare LLC and its related entities agreed to pay $11.2 million; Alere Inc. and Alere San Diego Inc. paid $38.75 million; Apria Healthcare LLC paid $40.5 million; St. Jude Medical Inc. paid $27 million; and Regency Inc. agreed to a settlement of up to $20.3 million.

Holding Individuals Accountable

It’s not just companies that are being held accountable, but also many of their top executives. For example: Two Texas physicians, Robert Wills and Brannon Frank, paid a total of $3.9 million to resolve allegations that they billed federal healthcare programs for medically unnecessary urine drug testing.

Substance abuse treatment provider A.R.E.B.A.-Casriel Inc. dba Addiction Care Interventions Chemical Dependency Treatment Centers (ACI) and its primary owner and former CEO, Steven Yohay, agreed to pay a total of $6 million to resolve allegations that they provided kickbacks and engaged in fraudulent conduct in connection with the enrollment of Medicaid beneficiaries into ACI’s inpatient treatment program.

Whistleblowers

Finally of the $5.6 billion recovered, more than $1.6 billion resulted from lawsuits filed under the qui tam provisions of the FCA. The government paid out $237 million to those whistleblowers who exposed the fraud. There were 598 qui tam suits filed in the last fiscal year – that’s an average of 11 new cases a week!

The Health Law Offices of Anthony C Vitale represents clients in matters relating to healthcare fraud and violations of the False Claims Act. The firm also is known for its representation of whistleblowers, as well as its ability to defend those who become the target of a whistleblower action. For information call 305-358-4500 or email info@vitalehealthlaw.com.

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