Fifty percent from the health care industry
During 2016, the DOJ reported obtaining $4.7 billion in settlements and judgments from civil fraud and false claims cases against the government, of which $2.5 billion came from the health care industry, including drug companies, medical device companies, hospitals, nursing homes, laboratories, and physicians. For the past seven years, civil health care fraud recoveries have exceeded $2 billion. Overall, this was the third highest amount in False Claims Act history. Since 2009, the DOJ has been averaging about $4 billion in recoveries per year, with total recoveries of $31.3 billion.
Most actions continue to come from qui tam relators (whistleblowers), who may receive up to 30 percent of the recovery. In 2016, there were 702 qui tam suits filed, an average of about 14 new cases a week. The DOJ recovered $2.9 billion in those cases, with whistleblowers receiving as their share $519 million. The number of qui tam suits has continued to grow at a fast rate since 1986, when Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to encourage whistleblowers to file suit. A key witness in support of the legislation at the hearings was Richard Kusserow, then-HHS Inspector General. Since 2009, the government has recovered nearly $24 billion in settlements and judgments related to qui tam suits and paid more than $4 billion in whistleblower awards during the same period.
Health Care Fraud
Since 2009, the DOJ has recovered $19.3 billion in health care fraud claims related to Medicare, Medicaid, and TRICARE, the health care program for service members and their families. Cited as a major contributor to the results was the Health Care Fraud Prevention and Enforcement Action Team (HEAT), created in 2009 to increase coordination and optimize criminal and civil enforcement. The largest recoveries during 2016 included the following:
- Wyeth and Pfizer Inc. paid $784.6 million related to knowingly reporting false and fraudulent prices on two drugs, Protonix Oral and Protonix IV.
- Novartis Pharmaceuticals Corp. paid $390 million based related to kickbacks to specialty pharmacies for recommending Exjade and Myfortic.
- Tenet Healthcare Corp. paid roughly $244.2 million related to paying kickbacks in return for patient referrals.
- Millennium Health paid $256 million related to billing Medicare, Medicaid, and other federal health care programs for excessive and unnecessary testing and giving inducements to physicians to refer lab tests to Millennium.
- RehabCare Group Inc. and its parent, Kindred Healthcare Inc., paid $125 million related to inducing skilled nursing homes to submit false claims to Medicare for rehabilitation services that were not reasonable, necessary, and skilled, or that weren’t provided at all.
Nursing homes and skilled nursing facilities cases accounted for $160 million in settlements and judgments.Subscribe to blog