DOJ Health Care Fraud Recoveries Down in FY 2015, Total $1.9B
The Department of Justice recovered more than $1.9 billion from judgments and settlements in health care fraud cases in fiscal year 2015, Modern Healthcare reports.
The amount marks the lowest DOJ has recovered from such cases since 2009. According to Modern Healthcare, DOJ recovered a record high of $3 billion from such cases in 2012 and $2.4 billion from such cases in 2014.
Experts say the lower recovery amount is in large part because of an absence in significant drug industry settlements and not related to less scrutiny of health care fraud at DOJ. Jennifer Weaver, a partner at Waller Lansden Dortch & Davis who represents providers, said, "The recoveries are still high, and there's still a real focus at [DOJ] on these cases."
Sara Lord, a partner at Arnall Golden Gregory who also represents providers, noted, "I think the arena is shifting slightly," adding, "Some of the larger targets or companies have already settled." Further, Lord said that large settlements in the past could have caused "[o]ther companies [to] sit up and take note and ... start to look at their policies and practices."
The health care-related recoveries account for about half of the total $3.5 billion the federal government recouped from fraud cases across all industries.
According to DOJ, hospitals paid almost $330 million in fraud-related judgments and settlements this year, including $216 million the federal government recovered from more than 450 hospitals in a settlement resulting from a years-long investigation into the alleged overuse of implantable cardiac defibrillators.
In addition, some hospital settlements resulted from claims of improper physician compensation agreements that violated the federal Stark Law (Schencker, Modern Healthcare, 12/4). The law bans physicians from referring Medicare beneficiaries they are treating to entities in which they have a financial stake (California Healthline, 10/23/14). Such recoveries included:
- $118 million from Adventist Health System; and
- $69.5 million from North Broward Hospital District.
DOJ said whistleblowers, who receive a percentage of government recoveries from health care fraud-related cases, were awarded $330 million from such judgments and settlements this year. According to Modern Healthcare, the federal government recovered $468 million from cases involving whistleblowers in which it decided not to intervene, marking the highest-ever amount it has recovered from such cases.
Marc Raspanti, a partner at Pietragallo Gordon Alfano Bosick & Raspanti who represents whistleblowers, said that increase could be related to a lack of federal resources or desire to intervene in whistleblower cases, which he noted could be detrimental because such "cases are very complex" and "sophisticated."
He added that such cases are "often against very powerful health care entities that are getting bigger every day" and often need government intervention to be successful (Modern Healthcare, 12/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.