DOJ Reports $2.3 Billion In Health Care Fraud Recoveries In 2014

The Civil Division of the Department of Justice (DOJ) reported obtaining $2.3 billion in 2014 from settlements and judgments in civil cases involving health care fraud and false claims against the government. This represents approximately 40% of the total $5.69 billion recovered by the government. The remaining amount was obtained from banks and other financial institutions. In a separate announcement, the DOJ reported that the total combined collection from both civil and criminal DOJ enforcement actions was $24.7 billion.

Health Care Fraud

Most of the recoveries came from a single case involving Johnson and Johnson and its related cases. Another notable case resulted in a recovery of $116 million from Omnicare. The settlement resolved allegations that Omnicare engaged in an impermissible arrangement with skilled nursing facilities by inducing the facilities to select Omnicare as their pharmacy provider, in violation of the Anti-Kickback Statute.

Hospital Cases

Cases involving hospitals in 2014 resulted in $333 million in settlements and judgments, with significant recoveries from two hospital chains. Community Health Systems Inc., the nation’s largest operator of acute care hospitals, paid $98.15 million to settle allegation of inpatient services that should have been provided in a less costly outpatient or observation setting. Halifax Hospital Medical Center paid $85 million to resolve allegations that it violated the Stark Law, which prohibits hospitals from billing Medicare for certain services when referred by physicians who have a financial relationship with the hospital.

Home Health

The DOJ gave considerable attention to home health services both in its Criminal and Civil Divisions. On the Civil Division side, Amedisys Inc. Home Health Companies, one of the nation’s largest providers of home health services, paid $150 million to resolve allegations that it billed Medicare for medically unnecessary services, for services to patients who were not homebound, and for violations of the Anti-Kickback Statute.

Cardiac Cases

Boston Scientific Corp., which purchased Guidant LLC, Guidant Sales LLC, and Cardiac Pacemakers Inc. in 2006, paid $30 million to settle claims that Guidant sold defective heart devices to health care facilities that implanted them into Medicare patients. King’s Daughters Medical Center paid $41 million for billing coronary procedures that the government alleged were unnecessary. St. Joseph’s Health System paid over $16 million to settle allegations that they billed for numerous invasive cardiac procedures that were performed on patients who did not need them.

Whistleblowers

The DOJ notes that most false claims actions were filed under the act’s whistleblower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government. The number of these cases exceeded 700 this year. More than half of the recoveries are from qui tam cases with health care cases comprising the highest percentage. From the nearly $3 billion recovered in relation to qui tam law suits, whistleblowers received $435 million in payouts.