Offending organizations ran the gamut from drug and medical device manufacturers and insurers to hospitals, pharmacies, hospice organizations, laboratories and doctors.
It was a pretty good year for the Justice Department when it came to recovering funds that had gone out for fraudulent and false claims.
According to Modern Healthcare, recoveries from such cases are on the rise, with 2017's $2.1 billion and 2018's $2.5 billion being surpassed in 2019 with $2.6 billion as of the end of the fiscal year on September 30. The Justice Department is cited saying that 2019 was the 10th straight year in which settlements and judgments from health care companies for alleged fraud topped $2 billion.
"The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens' tax dollars are well spent," Assistant Attorney General Jody Hunt said in a statement.
Offending organizations ran the gamut from drug and medical device manufacturers and insurers to hospitals, pharmacies, hospice organizations, laboratories and doctors. And that $2.6 billion is just federal losses—the Justice Department also recovered millions more for state Medicaid programs.
Health care companies' Achilles heel was the intervention of whistleblowers, with such people accounting for some 505 cases. Their share of the legal recoveries amounted to $244.2 million in 2019, which was actually down from $306.1 million the year before.
Opioid manufacturers accounted for two of the biggest recoveries, with Insys Therapeutics paying $195 million to settle allegations it paid kickbacks to clinicians to prescribe an addictive painkiller called Subsys, and Reckitt Benckiser paying $500 million to the federal government on civil claims of promoting the addiction treatment drug and opioid Suboxone for unsafe uses. The latter forked over a total of $1.4 billion total to resolve civil and criminal allegations, the report says.
Seven drugmakers paid a combined total of $624 million to resolve claims of illegally paying Medicare patients' copays for their own drugs through foundations that they used as conduits. According to the Justice Department, that action facilitates drug price hikes.
Then there were cases of misrepresentation of products by health care companies as well as kickbacks paid to referring physicians.
Health care accounted for the lion's share of recoveries, with the Justice Department saying that across all False Claims Act cases it recovered $3.1 billion, up from $2.9 billion in 2018. Those totals have grown to $62 billion since the strengthening of the civil False Claims Act in 1986 to encourage whistleblowers to report fraud.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
