Feds Recover $2.5 Billion in Healthcare False Claims

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The Department of Justice (DoJ) says it obtained more than $4.7 billion in settlements and judgments from civil cases involving fraud and false claims against the government in FY 2016, including $2.5 billion from the healthcare industry (drug companies, medical device companies, hospitals, nursing homes, laboratories, and doctors). A DoJ news release says that the $2.5 billion reflected only federal losses and in many of the cases the department was instrumental in recovering additional millions of dollars for state Medicaid programs. The department says it is the seventh consecutive year that healthcare fraud recoveries exceeded $2 billion.

According to the DoJ, the department recovered $19.3 billion in healthcare fraud claims from 1/2009 to the end of FY 2016, 57% of the healthcare fraud dollars recovered in the 30 years since the 1986 amendments to the False Claims Act that increased incentives for whistleblowers to file suits alleging false claims on behalf of the government.

The largest recoveries in FY 2016, $1.2 billion, came from the drug and medical device industry, DoJ says. Wyeth and Pfizer paid $784.6 million to resolve federal and state claims that Wyeth knowingly reported false and fraudulent prices on Protonix Oral and Protonix IV. The government said that Wyeth, before it was acquired by Pfizer, failed to report deep discounts available to hospitals, as required by the government to ensure that the Medicaid program enjoyed the same pricing benefits available to the company’s commercial customers. Wyeth paid $413.2 million to the federal government and $371.4 million to state Medicaid programs.

In another drug company settlement, the release says, Novartis paid $390 million based on claims that the company gave kickbacks to specialty pharmacies in return for recommending Exjade and Myfortic. The settlement included $306.9 million for the federal government and $83.1 million for state Medicaid programs.

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