False Claims Act judgments for healthcare totaled $1.8 billion in 2023, DOJ says
Overall, healthcare fraud was responsible for two-thirds of the recovered amount in 2023.
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Settlements and judgments under the False Claims Act exceeded $2.68 billion in the fiscal year ending Sept. 30, 2023, and, of that total, more than $1.8 billion related to matters that involved the healthcare industry – including managed care providers, hospitals, pharmacies, laboratories, long-term acute care facilities and physicians.
According to the U.S. Department of Justice, the government and whistleblowers were party to 543 settlements and judgments, the highest number of settlements and judgments in a single year. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $75 billion.
The amounts included in the $1.8 billion reflect recoveries arising only from federal losses, but in many of these cases, the department was instrumental in recovering additional amounts for state Medicaid programs, the DOJ said.
The recoveries in fiscal year 2023 also reflect the DOJ's focus on enforcement priorities, including fraud in pandemic relief programs and alleged violations of cybersecurity requirements in government contracts and grants.
WHAT'S THE IMPACT?
Overall, healthcare fraud was responsible for two-thirds of the recovered amount in 2023.
The DOJ continued to pursue cases alleging false claims in the Medicare Advantage program, including allegations that organizations participating in the program knowingly submitted inaccurate information, or knowingly failed to correct inaccurate information about the health status of beneficiaries enrolled in their plans to increase reimbursement.
One of the highest-profile cases involved Cigna, which agreed to pay $172 million to resolve allegations that it knowingly submitted and failed to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees to increase its payments from Medicare. Martin's Point Health Care also agreed to pay $22.5 million for similar reasons.
The DOJ also pursued matters in which providers billed federal healthcare programs for medically unnecessary services and substandard care. The largest sum collected for this reason was from Cornerstone Hospital Medical Center, which agreed to pay $21.6 million to resolve allegations that the former long-term acute care facility knowingly submitted claims for services performed by unlicensed and unauthorized students, and services that were not provided or were effectively worthless.
Also in the department's crosshairs were entities that played a role in contributing to and exacerbating the opioid crisis. For instance, the DOJ filed a complaint in intervention in a whistleblower lawsuit against Rite Aid Corporation and various subsidiaries alleging that Rite Aid filled unlawful prescriptions for controlled substances in violation of the False Claims Act and the Controlled Substances Act.
The United States alleges that from May 2014 through June 2019, Rite Aid knowingly filled unlawful prescriptions for controlled substances that lacked a legitimate medical purpose, were not for a medically accepted indication, or were not issued in the usual course of professional practice.
These unlawful prescriptions included, for example, prescriptions for the highly abused combination of drugs known as "the trinity," prescriptions for excessive quantities of opioids such as oxycodone and fentanyl, and prescriptions issued by prescribers who Rite Aid pharmacists had repeatedly identified internally as writing illegitimate prescriptions.
Other targets of the DOJ included illegal kickbacks, as well as alleged fraud in California's Medicaid program in connection with coverage of the previously uninsured "Adult Expansion" population under the Affordable Care Act.
THE LARGER TREND
Settlements and judgments under the False Claims Act exceeded $2.2 billion in 2022, more than $1.7 billion of which pertained to matters that involved 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 False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from the federal government or knowingly fail to pay money owed to the United States.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
