More than $2 billion in fraud recoveries collected from healthcare companies last year
Providers warned to stay vigilant as financial and political incentives remain strong to bring False Claims Act cases.
A new report advises healthcare providers to stay compliant with fraud regulations, as incentives both financial and political remain strong to bring False Claims Act cases.
In 2019, $2.6 billion in fraud recoveries were collected from healthcare companies, according to the Healthcare Fraud and Abuse Annual Review, released by Bass, Berry & Sims.
Last year was the 10th consecutive in which fraud recoveries from healthcare companies topped $2 billion, the report said.
The most notable settlements for hospitals and health systems involved scrutiny of physician compensation arrangements under the Stark Law or Anti-Kickback Statute.
The Centers for Medicare and Medicaid Services and the Office of Inspector General of the Department of Health and Human Services proposed far-reaching updates to the Stark Law and statute last year.
Fraudulent activity was seen in medical clinics known as "pill mills," as well as in companies charged with filing fraudulent Medicare claims.
WHY THIS MATTERS
The legal firm advised healthcare providers continue to invest in compliance efforts as scrutiny of healthcare companies is expected to continue in 2020.
The continued scrutiny comes as regulators also consider ways to loosen the regulatory burden in healthcare, according to the report.
Fraud enforcement hasn't wavered despite significant political and healthcare industry changes, according to Brian Roark, head of the firm's Healthcare Fraud Task Force.
In February 2019, William Barr was confirmed as the new U.S. attorney general, while longtime Department Health and Human Services Inspector General Daniel Levinson stepped down after serving 15 years.
Despite "turmoil at the highest levels" among federal regulators, civil fraud recoveries by the DOJ rose to more than $3 billion in the fiscal year ending last September, which was up from $2.8 million the year before, the report said.
The review pointed to changes adding to scrutiny of healthcare, such as the growing trend towards the "rise of the professional relator," in bringing forward a public lawsuit.
This refers to analytics-driven companies that mine Medicare claims data or other publicly available data sources to develop False Claims Act cases against healthcare providers. They warn these companies have no personal knowledge of conduct that forms the basis of such allegations, unlike traditional whistleblower relators.
THE LARGER TREND
Whistleblowers filed 633 new qui tam lawsuits in 2019 under the False Claims Act, which the review said was the federal government's primary civil enforcement tool for imposing liability on providers that defrauded federal healthcare programs. Those actions recovered more than $265 million, the review stated.
Much of the money recovered came through the Department of Justice's announced coordinated healthcare fraud enforcement action across seven federal districts in the northeastern U.S. last September. That action involved more than $800 million in losses and the distribution of more than 3.25 million pills in connection with pill mills. It also resulted in the disclosure of guilty pleas by executives of numerous telemedicine and durable medical equipment companies for submitting more than $600 million in fraudulent Medicare claims.
Other action included the Appalachian Regional Prescription Opioid Strike Force filing charges in 11 federal districts against 60 physicians, pharmacists and other licensed medical professionals. Those charges stemmed from 350,000 prescriptions for opioids and other narcotics.
ON THE RECORD
"We expect federal fraud enforcers and whistleblowers to maintain their efforts and creativity in bringing FCA cases against healthcare companies, as the incentives – political and financial – remain strong," said Bass, Berry & Sims attorney Lisa Rivera. "Healthcare companies must redouble their efforts to hone compliance programs and strengthen the culture of compliance within their organizations to mitigate the impact of these risks."
Max Sullivan is a freelance writer and reporter who, in addition to writing about healthcare, has covered business stories, municipal government, education and crime. Twitter: @maxsullivanlive maxesullivan@gmail.com
