The Department of Justice (DOJ) announced that the agency recovered $2.9 billion in resolutions to federal False Claims Act allegations for 2024 (fiscal year ending September 30). This is a slight increase from the historic $2.7 billion recovered in fiscal year 2023. Office of Public Affairs | False Claims Act Settlements and Judgments Exceed $2.9B in Fiscal Year 2024 | United States Department of Justice
Estimates suggest that 30% of US Healthcare spending is lost to Fraud, Waste, and Abuse. Fraud, Waste, and Abuse (FWA) is a challenge in every industry. In healthcare, FWA leads to significant financial losses, estimated to cost the U.S. healthcare system billions of dollars annually. In 2023, this would equate to $1.47 trillion of the total $4.9 trillion spent on healthcare could be considered fraud, waste, and abuse. Fraud, Waste, and Abuse in Healthcare – GoInvo
What the above suggests is that every $1 the U.S. invests in combatting waste, fraud, and abuse generates $4 in return. A $2.9 billion recovery via False Claims Act cases is in truth, skimpy to the overall scope of fraud in federal health programs (primarily, Medicare and Medicaid). Last year however, 2023, was in fact, a record year for recovery. https://rhislop3.com/record-breaking-2-7-billion-paid-by-healthcare-providers-in-false-claims-act-cases/
The total number of cases with claims recovered in 2024 was 558 vs. 566 in 2023. Readers should recall from other posts on this site that False Claims Act cases are also known as “whistleblower” cases whereby, someone shared inside information with DOJ or other legal officials regarding potentially fraudulent activity. More than $2.4 billion arose from lawsuits that were filed under the qui tam provisions of the False Claims Act then pursued by either the government or whistleblowers. During the same period, the relator shares (whistleblower) for the entities or individuals that exposed fraud and false claims by filing qui tam suits exceeded $400 million.
Among these cases are a number of senior living and post-acute cases.
- Strauss Ventures, doing business as the Grand Health Care System, and 12 related skilled nursing facilities agreed to pay $21.3 million to resolve allegations that they intentionally billed Medicare and Medicaid programs for therapy services that were “unreasonable, unnecessary or unskilled, or that simply weren’t provided”. As part of the settlement, Strauss admitted it had implemented quotas pertaining to residents’ length of stay and to the percentages of residents billed at the highest level (reimbursement rate), resulting in some Medicare residents staying on therapy services longer than was reasonable and/or medically necessary.
- Prema Thekkek, her management company Paksn and six SNFs owned by Thekkek and/or operated by Paksn entered into a $45.6 million judgment to resolve allegations that they paid kickbacks to physicians in the form of medical directorships to induce resident/patient referrals.
- Gentiva, successor to Kindred at Home, paid $19.4 million to resolve allegations that Kindred at Home and related entities submitted claims and retained overpayments for hospice services provided to patients who were ineligible to receive hospice benefits (not imminently terminal).
Among the larger claim recoveries were the following.
- Teva Pharmaceuticals USA Inc., the largest generic drug manufacturer in the U.S., agreed to pay $425 million to resolve allegations that it violated the False Claims Act by paying copays for Medicare patients for the multiple sclerosis drug Copaxone event though it was regularly raising the drug’s price. Teva further agreed to pay $25 million to resolve allegations that it conspired with other generic drug manufacturers to fix prices for certain drugs and that the benefits Teva received under its price fixing scheme constituted illegal kickbacks.
- Community Health Network Inc. (Community) paid $345 million to resolve allegations that it submitted claims to Medicare for services that were referred in violation of the Stark Law. The DOJ alleged that the compensation Community paid to certain physician groups was significantly above fair market value. Community also awarded bonuses to physicians that were tied to the number of referrals made. The DOJ alleged that senior management at Community used an illegal scheme to recruit physicians for employment for the purpose of capturing “downstream referrals.”
- Endo Health Solutions, which is in bankruptcy, agreed that the United States has an allowed, unsubordinated, general unsecured claim of $475.6 million in the bankruptcy to resolve allegations relating to losses to federal healthcare programs that paid for Opana ER, an opioid drug sold and marketed by Endo. While the number is included in the DOJ settlement figures, the likelihood of actual cash recovery is minimal as the amount is “unsecured” in bankruptcy.