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Health Care Fraud Continues To Be Key Target of Federal False Claims Act
Recent figures show that health care fraud continued to comprise the majority of federal False Claims Act (FCA) recoveries in 2008. The Act allows federal officials to prosecute fraudulent billing of government programs. In the 2008 fiscal year, enforcement officials recouped $1.12 billion in settlements and judgments from health care entities, 84% of the year’s $1.34 billion total recovery from all FCA prosecution and settlements.
The amount recovered in 2008 from health care entities decreased from 2006 and 2007, when federal officials recouped $2.2 billion and $1.5 billion, respectively. Experts attribute much of the decline to several large settlements made with companies in 2007. The government’s biggest recoveries in 2008 came from settlements with Merck & Co. Inc., Cephalon Inc., and Amerigroup, a managed care company, in amounts ranging from $225 million to $361 million.
Expanded Investigations
While the Department of Justice recouped less money in 2008, they also expanded the scope of their investigations and enforcement efforts. The investigations included allegations of off-label promotion by drug companies, anti-kickback violations involving illegal referral agreements, and quality of care issues. Most of the targeted entities were drug companies, device-makers, managed care companies, and hospitals. The government usually does not consider it worthwhile to pursue individual doctors or smaller practices.
Federal investigators have also increased their cooperation with states. As of May 2009, 22 states, along with the District of Columbia, New York City and Chicago, had passed their own versions of the False Claims Act. Under a 2005 federal law, many investigations started under these statutes qualify the states for a 10% bonus in their share of Medicaid recoveries.
Whistleblowers
Whistleblowers are an important part of government fraud investigations, initiating cases that resulted in 80% of the total recoveries in 2008. In whistleblower health care investigations, whistleblowers are often doctors because they are especially well-placed to detect fraud. Physicians initiated two major investigations that resulted in federal settlements with Merck and an investigation of a New York hospital for fraudulent Medicare and Medicaid billing. In successful government suits, whistleblowers can receive between 15% and 25% of the recoveries as a bounty. In 2008 alone, whistleblowers received $198 million.
If you are considering filing a healthcare whistleblower lawsuit, contact us today for a free and confidential case evaluation.
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