The Department of Justice (DOJ) collected more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal 2021 and most of that money came from health care fraud cases.
The amount obtained in 2021 is the second largest annual total in False Claims Act history, and the largest since 2014, Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division said in an announcement on Tuesday.
Health care fraud was the leading source of the department’s False Claims Act settlements and judgments this past year. Of the more than $5.6 billion in settlements and judgments reported by the DOJ this past fiscal year, more than $5 billion related to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, and laboratories land physicians. The amounts included reflect recoveries arising from only federal losses, and, in many of these cases, the department was instrumental in recovering additional amounts for state Medicaid programs.
Prescription drug manufacturers
The largest False Claims Act settlements involved prescription drugmakers Indivior Inc. and Indivior plc (Indivior), and Purdue Pharma (Purdue) for their role in the opioid epidemic. Indivior agreed to pay 209 million to resolve civil allegations for promoting the opioid-addiction-treatment drug Suboxone to physicians who were writing inappropriate prescriptions. Purdue agreed to pay 2.8 billion to resolve civil allegations that it marketed its drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary and that often led to abuse and diversion.
Medicare Advantage
Other False Claims Act settlements involved Medicare Advantage programs that manipulated the risk adjustment process by submitting unsupported diagnosis codes to make their patients appear sicker than they actually were. These cases included:
Sutter Health, a California-based health care services provider, which paid $90 million to resolve allegations that it knowingly submitted unsupported diagnosis codes for certain patient encounters, resulting in inflated payments to be made to the Medicare Advantage plans and Sutter Health.
Kaiser Foundation Health Plan of Washington, formerly known as Group Health Cooperative (GHC), paid $6.3 million to resolve allegations that it submitted invalid diagnoses and received inflated payments as a result.
Unlawful kickbacks
In addition to pursuing improper payments by drug manufacturers, the DOJ resolved other schemes involving the willful solicitation or payment of illegal remuneration to induce the purchase of a good or service paid for by a federal health care program.
Electronic health records (EHR) technology vendor Athenahealth Inc. paid $18.25 million to resolve allegations that it invited customers and prospective customers to lavish all-expense-paid sporting, entertainment, and recreational events to generate sales of its EHR product.
Generic pharmaceutical manufacturers Taro, Sandoz, and Apotex paid more than $400 million to resolve allegations that they paid and received compensation prohibited by the Anti-Kickback Statute through arrangements on price, supply, and allocation of customers with other pharmaceutical manufacturers as part of a conspiracy to fix the price of certain generic drugs.
Unnecessary medical services
The DOJ also resolved cases in which providers billed federal health care programs for medically unnecessary services or services not rendered as billed. Among those cases: SavaSeniorCare LLC, which agreed to pay $11.2 million for alleged false claims for rehabilitation therapy services provided as a result of aggressive corporate targets without regard for its patients’ actual clinical needs, resulting in the provision of medically unreasonable, unnecessary, or unskilled services to Medicare patients. The settlement also resolved allegations that Sava provided grossly and materially substandard and/or worthless skilled nursing services.
Alere Inc. and Alere San Diego Inc. paid $38.75 million to resolve allegations that they billed, and caused others to bill, for defective rapid point-of-care testing devices used by Medicare beneficiaries to monitor blood coagulation when taking anticoagulant drugs.
Apria Healthcare LLC paid $40.5 million to resolve allegations that it submitted false claims for the rental of costly non-invasive ventilators to program beneficiaries who did not need the devices or were not using them.
St. Jude Medical Inc. paid $27 million to settle allegations that it knowingly sold defective, implantable heart devices and failed to disclose serious adverse health events in connection with premature battery depletion in those devices.
Regency Inc. and its owner agreed to a civil settlement up to $20.3 million to resolve allegations that they falsified documentation to enable the billing of federal healthcare programs for medically unnecessary durable medical equipment.
Individuals also held accountable
The department also recovered money from individuals, including:
Ashish Pal, M.D., a cardiologist based in Orlando, Fla., who paid $6.75 million to resolve allegations that he performed medically unnecessary ablations and vein stent procedures.
Two Texas physicians, Robert Wills and Brannon Frank, paid a total of $3.9 million to resolve allegations that they billed federal health care programs for medically unnecessary urine drug testing.
Substance abuse treatment provider A.R.E.B.A.-Casriel Inc. dba Addiction Care Interventions Chemical Dependency Treatment Centers (ACI) and its primary owner and former CEO, Steven Yohay, agreed to pay a total of $6 million to resolve allegations that they provided kickbacks and engaged in fraudulent conduct in connection with the enrollment of Medicaid beneficiaries into ACI’s inpatient treatment program.