Government Recovers Over $4.7 Billion from False Claims Act Cases in FY 2016
December 15, 2016 — In a mid-week announcement, the U.S. Department of Justice (DOJ) revealed that during fiscal year 2016 it had recovered, via settlements and judgments in civil cases under the False Claims Act (FCA), a near-record $4.7 billion—the third highest annual recovery in FCA history. The vast majority of these recoveries derived from health care fraud claims, with additional funds returned to the government coffers from fraudulent activities in the housing and mortgage sector, education, and government procurement. Whistleblower suits and actions against individuals also accounted for millions of dollars in recovered funds.
Of the $4.7 billion recovered, over half—$2.5 billion—came from the health care industry. The DOJ statement noted, “The $2.5 billion recovered in fiscal year 2016 reflects only federal losses. In many of these cases, the Department was instrumental in recovering additional millions of dollars for state Medicaid programs. This is the seventh consecutive year the Department’s civil health care fraud recoveries have exceeded $2 billion.” The recoveries derived from nearly every sector of the health care industry, including drug companies, medical device companies, hospitals, nursing homes, laboratories, and physicians.
Drug and medical device companies accounted for the lion’s share of the recoveries in FY 2016—$1.2 billion. Notable settlements included Wyeth and Pfizer Inc. at $784.6 million and Novartis Pharmaceuticals Corp. at $390 million.
According to the announcement, hospitals and outpatient clinics came in second in the amount of dollars recovered at $360 million. Included in that amount is Tenant Healthcare, which paid out $244.2 million to settle FCA claims.
Laboratory recoveries included Millennium Health, which paid $214.8 million to settle alleged false claims against federal healthcare programs.
Cases involving nursing homes and skilled nursing facilities accounted for $160 million in settlements.
The total in FCA recoveries during the Obama Administration amounted to $31.3 billion and there is no reason to believe, based on statements made during the recent Presidential campaign, that the incoming Trump administration will change course. Those in the healthcare industry should anticipate that government efforts to root out fraud and abuse may only increase in the coming years. Healthcare providers of all types should take a proactive approach now to ensure their compliance programs are effectively implemented and ready to withstand a government investigation. Given the complexity and aggressiveness of the enforcement activity, it would be prudent to discuss your legal rights with counsel.
The FisherBroyles Pharmacy and Health Care Law team is well versed in the FCA and federal healthcare fraud investigations. We welcome your questions. Please contact any one of the following attorneys: