Scroll Top
Bothwell Law Group 304 Macy Dr, Roswell, GA 30076
Justice department logo

The United States Justice Department recently published the below article. See a portion below: 

The Department of Justice obtained more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2019, Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division announced today.  Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $62 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,” said Assistant Attorney General Hunt.  “The continued success of the department’s False Claims Act enforcement efforts are a testament to the tireless efforts of the civil servants who investigate, litigate, and try these important cases as well as to the fortitude of whistleblowers who report fraud.”

Of the more than $3 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.6 billion relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.  This is the tenth consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion.  The amounts included in the $2.6 billion reflect only federal losses, but in many of these cases the department was instrumental in recovering additional millions of dollars for state Medicaid programs.

In addition to combating health care fraud, the False Claims Act serves as the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of other government operations and functions.  The Act helps to protect our military and first responders by ensuring that government contractors provide equipment that is safe, effective, and cost efficient; to protect American businesses and workers by promoting compliance with customs laws, trade agreements, visa requirements, and small business protections; and to protect other critical government programs ranging from the provision of disaster relief funds to farming subsidies.

In 1986, Congress strengthened the Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government.  These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed.  If the government prevails in a qui tam action, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15 and 30 percent.  Whistleblowers filed 633 qui tam suits in fiscal year 2019, and this past year the department recovered over $2.1 billion in these and earlier filed suits.

Health Care Fraud

The department investigates and resolves matters involving a wide array of health care providers, goods, and services.  The department’s health care fraud enforcement efforts not only recover money for federal health care programs, such as Medicare, Medicaid, and TRICARE, but also help deter fraud schemes that put patients at risk and increase health care costs.

Reflecting the department’s commitment to holding drug companies accountable for their role in the opioid crisis, two of the largest recoveries involving the health care industry this past year came from opioid manufacturers.  In one matter, as part of a global resolution of criminal and civil claims, Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients.  The kickbacks allegedly took the form of sham speaker events, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.  The government also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients’ diagnoses to ensure payment by federal healthcare programs.  In another matter, Reckitt Benckiser Group plc paid a total of $1.4 billion to resolve criminal and civil liability related to the marketing of the opioid addiction treatment drug Suboxone, which is a formulation of the opioid buprenorphine.  As part of the resolution, RB Group paid $500 million to the United States to resolve civil allegations that it directly or through subsidiaries promoted Suboxone to physicians who were writing prescriptions for uses that were unsafe, ineffective, and medically unnecessary; promoted Suboxone Film using false and misleading claims that it was less susceptible to diversion, abuse, and accidental pediatric exposure than other buprenorphine products; and took steps to delay the entry of generic competition in order to improperly control pricing of Suboxone.

The department also pursued other cases involving drug manufacturers.  For example, Avanir Pharmaceuticals paid over $95 million to resolve allegations that it paid kickbacks and engaged in false and misleading marketing to induce healthcare providers in long term care facilities to prescribe the drug Neudexta for behaviors commonly associated with dementia patients, which is not an approved use of the drug.  The department also continued to investigate efforts by drug manufacturers to facilitate increases in drug prices by funding the co-payments of Medicare patients.  Congress included co-pay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.  This year, seven drug manufacturers – Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc.Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – paid a combined total of over $624 million to resolve claims that they illegally paid patient copays for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits.

The department also reported substantial recoveries involving a variety of other healthcare providers.  Pathology laboratory company Inform Diagnostics, formerly known as Miraca Life Sciences Inc., paid $63.5 million to resolve allegations that it paid kickbacks to referring physicians in the form of subsidies for electronic health records (EHR) systems and free or discounted technology consulting services.  Greenway Health LLC, an EHR software vendor, paid over $57 million to resolve allegations that it misrepresented the capabilities of its EHR product “Prime Suite” and provided unlawful remuneration to users to induce them to recommend Prime Suite to prospective new customers.  Encompass Health Corporation (formerly known as HealthSouth Corporation), the nation’s largest operator of inpatient rehabilitation facilities (IRFs), paid $48 million to resolve allegations that some of its IRFs provided inaccurate information to Medicare to maintain their status as an IRF and to earn a higher rate of reimbursement, and that some admissions to its IRFs were not medically necessary.

Recoveries in Whistleblower Suits

Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act.  During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.

The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 633 qui tam suits filed this past year – an average of more than 12 new cases every week.

“Whistleblowers continue to play a critical role identifying new and evolving fraud schemes that might otherwise remain undetected,” said Assistant Attorney General Hunt.  “Taxpayers have benefitted greatly from these individuals who are often required to make substantial sacrifices to bring these schemes to light.”

In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud.  In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions.  Congress also included in the False Claims Act authority for the government to dismiss cases that do not advance the goal of fraud prevention, and during the past year the government made increasing use of this tool to help prioritize and protect the expenditure of government resources.

Finally, Assistant Attorney General Hunt expressed appreciation for the many dedicated public servants throughout the department’s Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General and the many other federal and state agencies that contributed to the department’s False Claims Act recoveries this past fiscal year.

“The accomplishments announced today reflect the extraordinary efforts of the men and women throughout the government committed to protecting the federal fisc and the integrity of the government’s programs,” said Assistant Attorney General Hunt.  “Having served many years in the Civil Division, I have witnessed the passion and dedication of the talented employees who have committed their careers to serving the American people and defending the interests of our great nation.”

 

Whistleblowerlaw.com & Mike Bothwell Lawfirm does not claim or imply ownership of this article. Full article link here: https://www.justice.gov/opa/pr/justice-department-recovers-over-3-billion-false-claims-act-cases-fiscal-year-2019