On January 9, 2019, the U.S. Department of Justice (DOJ) announced that it had recovered over $3 billion from False Claims Act cases in fiscal year 2019. Nearly 75% of that was the result of qui tam whistleblower lawsuits. According to the DOJ, of the total recovery, $2.6 billion related to matters involving the healthcare industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospices, laboratories, and physicians. This was a slight increase over the DOJ’s 2018 recovery from healthcare providers, which was $2.5 billion. Moreover, this is the tenth consecutive year that the DOJ’s civil healthcare fraud settlements and judgments exceeded $2 billion. In addition to total recoveries, the DOJ announced that in 2019, 636 new qui tam lawsuits were filed, 449 of which were healthcare-related.

Individual Accountability 

The DOJ’s press release included a section entitled “holding individuals accountable.” According to the DOJ, it “continued its commitment to use the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations.” The press release cited several large settlements against individual defendants, including a settlement against several individual owners of a physician practice totaling over $7 million for allegedly billing Medicare for medically unnecessary viscosupplementation injections and medically unnecessary knee braces.

HHS-OIG Jumps In

In addition to the DOJ, the Office of Inspector General for the U.S. Department of Health & Human Services (HHS-OIG) recently issued its semi-annual report to Congress, in which it announced that its “expected investigative recoveries” for fiscal year 2019 will exceed $5 billion. Also in fiscal year 2019, HHS-OIG participated in 809 criminal actions, 695 civil actions, and over 2,500 administrative exclusionary actions.

HHS-OIG’s activity included major investigations involving pharmaceutical companies, including a $700 million False Claims Act settlement with Reckitt Benckiser in connection with the marketing and promotion of the opioid addiction treatment drug Suboxone. Other major settlements involved pharmacies, ambulance companies, laboratories, DME companies, and home health agencies. 

Physicians and physician groups were not immune to HHS-OIG scrutiny. In Michigan, for example, a physician was convicted for his part in an $18 million healthcare fraud scheme involving the illegal distribution of certain prescription drugs in return for cash payments. He pleaded guilty to conspiracy to distribute and possess with intent to distribute controlled substances and was sentenced to 11 years and 3 months in federal prison. In Kansas, a physician and physician group entered into a civil settlement agreement to resolve allegations that they submitted, or caused to be submitted false claims to federal healthcare programs for cardiac stent procedures that were not medically necessary. They agreed to pay $5.8 million to resolve the allegations, and the individual physician also agreed to be excluded for 3 years.

There were also a number of healthcare fraud “takedowns” in 2019, including two separate takedowns in April: “Operation Brace Yourself,” which included charges against 24 criminal defendants related to dispensing orthotic braces using telemedicine; and the Appalachian Regional Opioid Takedown, which resulted in charges against 60 individuals. In September, a takedown related to genetic testing resulted in charges against 35 individuals.

Record-breaking years for both the DOJ and HHS-OIG is sure to mean even more enforcement activity in 2020 and beyond.

To Read the DOJ’s Press Release, Click Here.

To Read HHS-OIG’s Full Report, Click Here.