Government recovers $1.9 billion in healthcare fraud judgments and settlements in FY 2015

A newly released report by the Health Care Fraud and Abuse Control Program (HCFAC) shows that the federal government won or negotiated more than $1.9 billion in healthcare fraud judgments and settlements in fiscal year 2015.

As a result of these efforts, as well as those of preceding years, in fiscal year 2015, approximately $2.4 billion was returned to the federal government or paid to private persons.

Of that $2.4 billion, the Medicare Trust Fund received transfers of approximately $1.6 billion during this period, and $135.9 million in federal Medicaid money was transferred separately to the U.S. Department of the Treasury.

Since the inception of the HCFAC program in 1997, $29.4 billion has been returned to the Medicare Trust Fund, with more than $16.2 billion returned between 2009 and 2015. A number of federal agencies, including the Department of Justice (DOJ), Federal Bureau of Investigation (FBI) and Health and Human Services Office of the Inspector General (HHS-OIG), were responsible for the investigations.

During the last fiscal year, the DOJ opened 983 new criminal healthcare fraud investigations and federal prosecutors filed criminal charges in 463 of those cases involving 888 defendants. Of those, 613 defendants were convicted of healthcare fraud-related crimes in fiscal year 2015. In addition, DOJ opened 808 new civil healthcare fraud cases and had 1,048 civil healthcare fraud matters pending at the end of the fiscal year.

The FBI’s efforts resulted in more than 625 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 144 healthcare fraud criminal enterprises.

HHS-OIG investigations resulted in 800 criminal actions against individuals or entities that engaged in crimes related to Medicare and Medicaid and 667 civil actions, which include false claims and unjust enrichment lawsuits filed in federal district court, civil monetary penalties settlements and administrative recoveries related to provider self-disclosure matters. In addition, HHG-OIG excluded 4,112 individuals and entities from participating in Medicare, Medicaid and other federal healthcare programs.

The report indicated that as a result of sequestration of mandatory funding there were fewer resources for federal agencies to fight fraud. In FY 2015, $22 million was sequestered from the HCFAC program for a combined total of $74.2 million during the past three years. Add in funds sequestered from the FBI, and that total goes up to $101.2 million.

The report goes on to note that for every $1 spent on the program over the last three years it saw a return on investment of $6.10.

Investigations into healthcare fraud span the gamut, from pharmaceutical companies, to medical device manufacturers, mental health counselors to ambulance companies to durable medical equipment suppliers. No one is immune. Below are some examples from the report.

  • In January 2015, Daiichi Sankyo Inc., a global pharmaceutical company, agreed to pay $39 million to resolve civil FCA allegations that it paid kickbacks to induce physicians to prescribe Daiichi drugs, including  Azor, Benicar, Tribenzor and Welchol.
  • In February 2015, medical device manufacturer ev3 Inc., formerly known as Fox Hollow Technologies Inc., agreed to pay $1.3 million to resolve civil FCA allegations that it caused 15 hospitals to submit false claims to Medicare for unnecessary inpatient admissions for procedures involving its atherectory device.
  • In March 2015, an owner of Colonial Medical Supply, a durable medical equipment company in Los Angeles, was convicted after a jury trial for his role in a $3.3 million Medicare fraud scheme.
  • In April 2015, a licensed mental health counselor in Miami, Florida was sentenced to four years in prison and ordered to pay $13.6 million in joint and several restitution after pleading guilty to conspiracy to commit healthcare fraud.
  • In May 2015, five ambulance companies in San Diego, California agreed to pay more than $11.5 million to settle civil False Claims Act (FCA) allegations that they engaged in so-called “swapping” kickback schemes by providing deeply discounted — and often below cost ambulance services — to hospitals and/or skilled nursing facilities in exchange for exclusive rights to the facilities’ more lucrative Medicare patient referrals.
  • In June 2015, a group of home health care companies — Friendship Home Healthcare, Inc., Friendship Home Health, Inc., Angel Private Duty and Home Health, and Friendship Home Health Agency, LLC. (collectively “Friendship”) — and their owner agreed to pay $6.5 million to resolve civil FCA allegations that they improperly billed federal health care programs for home health services.

To read the report in its entirety click here.

The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for 25 years. The firm conducts confidential defense investigations and will take you through the process in an effort to reduce or eliminate criminal, civil, licensure and administrative liability. We can be reached at 305 358-4500 or email us at

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