The Federal Government Nets $2.2B in Settlements and Judgements Under the False Claims Act, Including $1.7B in Healthcare-Related Fraud

Settlements and judgements under the False Claims Act (FCA) surpassed $2.2 billion for the fiscal year ending Sept. 30, 2022. Of that, $1.7 billion related to matters involving the healthcare industry, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians.

The government and whistleblowers were party to 351 settlements and judgments, the second-highest number in a single year. Since 1986, the recoveries under the False Claims Act total more than $72 billion.

Whistleblowers filed 652 qui tam suits in fiscal year 2022. And this past year the department reported settlements and judgments that were more than $1.9 billion from these and earlier-filed suits.

While the $1.7 billion was strictly relating to federal healthcare fraud, the U.S. Justice Department also was instrumental in recovering additional amounts for state Medicaid programs, which is funded by states and the federal government.

Many of the false claims related to unnecessary services. Among them:

Providence Health & Services Washington, a healthcare and hospital system operating in seven western U.S. states, paid $22.7 million to resolve allegations that it billed federal healthcare programs for medically unnecessary neurosurgeries.

Carrefour Associates LLC and its related companies, which operate under the name Crossroads Hospice, paid $5.5 million to resolve allegations that it knowingly submitted false claims to Medicare for hospice services for patients who were not terminally ill.

Hayat Pharmacy paid $2.05 million to resolve allegations that it submitted false claims to Medicare and Medicaid for prescription medications that the pharmacy had switched from lower cost medications to higher cost ones without any medical need and/or a valid prescription.

Other providers resolved allegations relating to unnecessary drug testing. Among them:

Physician Partners of America LLC, its founder, its former chief medical officer, and certain of its affiliated entities, paid $24.5 million to resolve allegations that they billed federal healthcare programs for unnecessary drug, psychological, and genetic testing.

MD Spine Solutions LLC dba MD Labs Inc. and two of its owners agreed to pay up to $16 million to resolve allegations that MD Labs submitted claims for medically unnecessary urine drug tests.

Radeas LLC paid $11.6 million to resolve allegations that it billed Medicare for medically unnecessary urine drug testing by performing presumptive and confirmatory tests on the same urine sample at the same time. Presumptive tests are initial screens used to identify possible use or non-use of a drug, while confirmatory tests are a second test conducted after drugs have been detected during an initial drug screening test.

The Justice Department also pursued claims in several whistleblower actions alleging kickback violations.

Among them, the department filed a complaint against two laboratory CEOs, a hospital CEO, six physicians, and other individuals and entities, alleging FCA violations based on patient referrals in violation of the Anti-Kickback Statute (AKS) and the Stark Law, as well as alleging that the defendants caused claims to be improperly billed to federal healthcare programs for medically unnecessary laboratory testing. 

Biogen Inc. paid $843.8 million to resolve allegations that the company offered and paid kickbacks, including in the form of speaker honoraria, speaker training fees, consulting fees, and meals, to physicians who spoke at or attended Biogen programs in connection with Biogen’s multiple sclerosis drugs Avonex, Tysabri, and Tecfidera.

Durable medical equipment manufacturer Philips RS North America, LLC, formerly Respironics, Inc., paid $24.75 million to resolve allegations that it knowingly provided unlawful kickbacks to DME suppliers to induce them to select Respironics’ respiratory equipment.

Kaléo Inc. paid the United States $12.7 million for alleged false claims for the drug Evzio, used to reverse opioid overdoses, for providing illegal remuneration to prescribing physicians and their office staff, and for directing physicians to send Evzio prescriptions to certain preferred pharmacies that, in turn, submitted false prior authorization requests to insurers.

The United States obtained settlements from 32 Texas doctors totaling more than $5 million to resolve allegations that they violated the AKS and the Stark Law in a scheme to receive improper remuneration from management service organizations in exchange for ordering laboratory tests from designated entities. This included a $582,522 settlement with Dr. Mitchell Finnie. The payments were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals.

And some providers settled cases in which they allegedly submitted claims for services not provided. Among them:

Dr. Minas Kochumian, of Los Angeles, who paid $9.5 million to resolve allegations that he submitted false claims to Medicare and Medi-Cal for procedures and tests never performed, including injections of medication designed to treat osteoarthritis and osteoporosis, drainage of cysts, and removal and destruction of various growths.

Dr. Harry Doyle and his wife and office assistant Sonya Doyle, of Philadelphia, paid $3 million to resolve allegations of submitting false claims to the U.S. Department of Labor’s Office of Worker’s Compensation Program (OWCP) for psychiatric services that were not provided, as well as upcoding and double-billing patient claims.

The Health Law Offices of Anthony C. Vitale can assist clients accused of healthcare fraud under the False Claims Act. Our attorneys also are well-versed in handling cases relating to the Anti-Kickback Statute and Stark Law. We also represent clients in whistleblower actions as well as plaintiffs who file whistleblower actions. Give us a call at 305-358-4500, or send an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.