Last December, the DOJ released its data on False Claims Act (“FCA”) judgments and settlements, which surpassed $2.8 billion for the year. Most of them, 87 percent of the cases filed, were related to healthcare fraud and linked to the Department of Health and Human Services (“HHS”).
Some of the largest recoveries included a settlement with AmerisourceBergen Corporation, which paid $625 million to the government to resolve claims related to their illegal repackaging of cancer drugs.
Alere, the manufacturer of medical devices, paid $33.2 million concerning their commercialization of unreliable tools intended to help physicians diagnose severe conditions, such as acute coronary syndrome and drug overdose. Pfizer also made the infamous podium after it paid $23.85 million to their unlawful use of a foundation to pay Medicare clients using Pfizer drugs.
All in all, healthcare recoveries associated with pharmaceutical manufacturers, drug dispensaries, medical care providers, labs, and doctors amounted to $2.5 billion, out of the total $2.8 billion for all FCA cases. This number represents the most significant percentage of monetary upturn related to healthcare fraud since 1987 when the DOJ started publishing its data.
2018 becomes the ninth year in a row in which FCA activity associated with healthcare goes over the $2 billion threshold. The economic and ethical impact of this rampant healthcare fraud is borne on the shoulders of the American taxpayer year after year.
In spite of this, the FCA recoveries totaling over $2.8 billion for the year is the lowest number since 2009. A total of 767 cases were filed in 2018, 645 of which were filed by whistleblowers, who get up to 30 percent of the recovery.
Additionally, if one pays attention to the new HSS cases filed, in contrast to the 573 new HHS cases filed in 2016 (of which 503 were filed by whistleblowers), and in contrast to the 550 new HHS cases (495 from whistleblowers) in 2017, the fiscal year of 2018 saw 506 new HHS cases (446 from whistleblowers). These numbers suggest a steady downward trend.
Beyond the money recovered, the DOJ points to three factors linked to fraud statistics in 2018, which will probably affect 2019 FCA activity as well. On the one hand, the DOJ highlights the focus on violations of the Anti-Kickback Statute.
On the other hand, there is the tendency to disregard discreditable cases, as specified in the Granston Memo, which encouraged dismissal of ‘meritless’ FCA claims. A third trend is related to the tendency to hold people, as well as corporations, financially accountable.
2018 also saw the first CEO of a pharma company (Insys Therapeutics) being prosecuted in connection with the opioid crisis and the proliferation of dangerous ‘pill mills’. Hopefully, this trend will continue in 2019, and we will see more individual company heads being held accountable for fraud schemes that put thousands of patients at risk every year.
Under the U.S. and state False Claims Acts, whistleblowers that report healthcare fraud involving Medicaid or Medicare could be entitled to a percentage of any verdict or settlement. Report fraud today, and you might earn a multimillion-dollar reward - hundreds of whistleblowers have already received rewards.