False Claims Act settlements exceeded $2.2 billion in 2022, DOJ says
More than $1.7 billion in funds recovered involved the healthcare industry.
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Settlements and judgments under the False Claims Act exceeded $2.2 billion in the fiscal year that ended on September 30, 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, according to the Department of Justice.
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.
The amounts included in the $1.7 billion reflect recoveries arising just from federal losses. 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 2022 also reflected the department's focus on new enforcement priorities, including fraud in pandemic relief programs and alleged violations of cybersecurity requirements in government contracts and grants, the agency said.
WHAT'S THE IMPACT?
Healthcare fraud was a leading source of False Claims Act settlements and judgements in FY22. The DOJ uncovered fraud and abuse within the Medicaid program, such as in the case of Mallinckrodt, formerly known as Questcor Pharmaceuticals, which was accused by the government of knowingly underpaying rebates to the Medicaid program by improperly designating Acthar as a "new drug" as of 2013, as opposed to a preexisting drug for which Mallinckrodt had significantly raised the price in years prior.
The DOJ also pursued matters in which providers billed federal healthcare programs for medically unnecessary services. For instance, the department filed claims against American Health Foundation (AHF), its affiliate management corporation, and three affiliated nursing homes – Cheltenham Nursing and Rehabilitation Center, The Sanctuary at Wilmington Place and Samaritan Care Center and Villa – for providing substandard skilled nursing services between 2016 and 2018. In its complaint, the United States alleged the three AHF nursing homes provided substandard services that failed to meet required standards of care in various ways, including by failing to follow appropriate infection-control protocols and not maintaining adequate staffing levels.
Similar claims were filed against companies such as Providence Health and Services Washington, accused of billing for medically unnecessary neurosurgeries; Eargo, which was accused of submitting claims containing unsupported hearing loss-related diagnosis codes to the Federal Employees Health Benefits Program for the reimbursement of its hearing aid devices; and Carrefour, which was charged with knowingly submitting false claims to Medicare for hospice services for patients who were not terminally ill.
The DOJ also pursued cases alleging that organizations participating in Medicare Advantage knowingly submitted inaccurate information – or knowingly failed to correct inaccurate information – about the health status of beneficiaries enrolled in their plans to increase reimbursement. This past year, the department intervened in one case against Cigna Corp and continued to litigate a number of other cases, including actions against UnitedHealth Group, Independent Health Corporation, Elevance Health (formerly Anthem) and the Kaiser Permanente consortium.
Drug pricing was in the crosshairs as well, with the feds suing Professional Compounding Centers of America, a company that sells active pharmaceutical ingredients and other products and services to compounding pharmacies. The complaint alleges that PCCA reported fraudulent and inflated Average Wholesale Prices for its ingredients that bore no relationship to the actual prices at which it sold those ingredients to its pharmacy customers, thereby causing those pharmacies to submit inflated compound prescription claims to TRICARE.
The department also targeted kickback violations involving organizations such as pharmaceutical company Biogen, medical equipment manufacturer Philips RS North America, physician-owned hospital Flower Mound Hospital Partners and pharmacy Solera Specialty.
THE LARGER TREND
The DOJ has been active in pursuing potential healthcare-related fraud. Just this week the agency charged more than two dozen people for their alleged participation in a wire fraud scheme that created an illegal licensing and employment shortcut for aspiring nurses.
Defendants purportedly engaged in a scheme to sell fraudulent nursing degree diplomas and transcripts obtained from accredited Florida-based nursing schools to people seeking licenses and jobs as registered nurses (RNs) and licensed practical/vocational nurses (LPN/VNs). The bogus diplomas and transcripts qualified purchasers to sit for the national nursing board exam and, after passing it, to obtain licenses and jobs in various states as RNs and LPN/VNs, the DOJ said.
Each defendant faces up to 20 years in prison, the DOJ said.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
