Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Practice Management News

Justice Dept Recovered $2.5B from Healthcare False Claims in 2018

For the ninth consecutive year civil healthcare false claims settlements and judgments exceeded $2 billion, the Department of Justice reported.

Healthcare false claims and healthcare fraud

Source: Thinkstock

By Jacqueline LaPointe

- The Department of Justice recovered over $2.8 billion from False Claims Act cases in the 2018 fiscal year, and the majority of the recoveries stemmed from healthcare fraud schemes.

The False Claims Act makes individuals and companies liable for defrauding government programs, including Medicare, Medicaid, and TRICARE, the Department of Defense Military Health System’s healthcare program. Individuals who are caught submitting false claims to government program must pay a civil penalty for each false claim and damages to the government.

Federal and state governments call on the False Claims Act to investigate and prosecute fraud cases involving improper procurement of goods and services and false claims for federal funds and property.

However, healthcare fraud schemes continue to make up the bulk of False Claims Act cases, the Justice Department reported.

Of the $2.8 billion in settlements and judgments recovered by the department in FY 2018, approximately $2.5 billion involved healthcare stakeholders, including hospitals, physicians, managed care organizations, laboratories, and drug and medical device manufacturers.

READ MORE: Medicare, Medicaid Exclude 200% More Docs for Healthcare Fraud

The Justice Department reported that FY 2018 is the ninth consecutive year the department’s civil healthcare fraud settlements and judgments exceeded $2 billion.

“The Department investigates and resolves matters involving a wide array of health care providers, goods, and services,” the announcement stated. “The Department’s healthcare fraud enforcement efforts recover money for federal programs that fund healthcare for our nation’s most vulnerable and deserving citizens, such as Medicare, Medicaid, and TRICARE. But just as important, the Department’s vigorous pursuit of healthcare fraud prevents billions more in losses by deterring those who might otherwise try to cheat the system for their own gain.”

The largest healthcare fraud recoveries from False Claims Act cases in FY 2018 involved drug and medical device manufacturers.

The Justice Department collected $625 million in one major case last year. AmerisourceBergen Corporation and some of its subsidiaries paid millions of dollars to resolve allegations that the company sought to “circumvent important safeguards intended to preserve the integrity of the nation’s drug supply and profit from the repackaging of certain drugs supplied to cancer-stricken patients.”

Of the $625 million settlement, the companies paid $581.8 million to the federal government and $43.2 million to state Medicaid programs.

READ MORE: How Providers Can Detect, Prevent Healthcare Fraud and Abuse

The Justice Department also investigated schemes devised by drug manufacturers to facilitate increases in drug prices by funding the co-payments of Medicare patients, the announcement added.

For example, the pharmaceutical company United Therapeutics Corporation agreed to pay $210 million in 2018 to settle claims that the seller of pulmonary arterial hypertension (PAH) drugs used a foundation as an illegal conduit to pay the co-payments of thousands of Medicare patients taking its PAH drugs.

Pfizer also paid $23.85 million last year to resolve False Claims Act allegations. The federal government also accused the major pharmaceutical company of using a foundation as a conduit to pay for Medicare patient co-payments.

As a result, Pfizer raised the price of one of its drugs by 40 percent in three months, the government alleged.

Healthcare providers were also at the center of a sizable portion of False Claims Act cases in FY 2018, the Justice Department reported.

READ MORE: Strong Compliance Programs Key to Avoiding Healthcare Fraud

A major healthcare fraud case involving providers had to do with HealthCare Partners Holdings LLC (HCP), doing business as DaVita Medical Holdings LLC. The large California-based independent physician association acquired by DaVita paid $270 million to resolve its liability for providing inaccurate information that resulted in Medicare Advantage organizations to receive inflated Medicare payments.

The multi-million-dollar settlement also resolved whistleblower allegations that HCP engaged in “one-way” chart reviews, the Justice Department added. One-way chart reviews involve providers checking medical records to identify additional diagnoses that would help managed care plans capture more revenue from Medicare.

However, the independent physician association was simultaneously ignoring inaccurate diagnosis codes found during the one-way chart reviews that would have reduced Medicare revenue or required the plans to repay money to Medicare.

Another major healthcare fraud case involving providers occurred in September 2018. The former hospital chain Health Management Associations (HMA) paid over $216 million to settle False Claims Act allegations that the chain billed public healthcare programs for inpatient services that should have been billed as outpatient or observation services. The chain also allegedly paid illegal remuneration to physicians in exchange for patient referrals and inflated claims for emergency department facility fees.

“As some of the matters described illustrate, the Department continued to place great importance on enforcing the safeguards contained within the Anti-Kickback Statute (AKS),” the announcement stated. “This law was enacted to ensure that clinical decisions and medical services are provided to patients based on their medical needs and not on the improper financial considerations of providers. Congress has made clear that claims submitted to federal health care programs in violation of the AKS are ‘false’ claims for purposes of the False Claims Act.”

X

Join 30,000 of your peers and get free access to all webcasts and exclusive content

Sign up for our free newsletter:

Our privacy policy


no, thanks

Continue to site...