By the Numbers: DOJ Recovers Billions in FY 2018

Year after year, the False Claims Act (FCA) remains the federal government’s most valuable fraud enforcement tool. Although recovery amounts have declined slightly in the past two years, FCA recoveries are still in the billions. As usual, this past year the healthcare industry was responsible for the bulk of the money. Here are the key numbers from the year in FCA recoveries as reported by the U.S. Department of Justice (DOJ) on Dec. 21.

• $2.8 billion: Total FCA recoveries in FY 2018;
• $2.5 billion: Total recoveries against healthcare providers in FY 2018 (not including state Medicaid);
• $37.8 billion: Total FCA recoveries between 2009-2018;
• $3.7 billion: Average annual FCA recoveries for three-year period 2016-2018;
• $22.7 billion: Total FCA recoveries from healthcare providers between 2009-2018;
• $2.3 billion: Average annual FCA recoveries from healthcare providers between 2009-2018;
• 645: Total qui tam (whistleblower) lawsuits filed in FY 2018, an average of 12.4 cases per week;
• $2.1 billion: Total recoveries in qui tam lawsuits in FY 2018;
• $301 million: Total recoveries paid to whistleblowers in FY 2018.

Top 5 FCA Healthcare Recoveries

The five largest recoveries in the healthcare industry for 2018 were:

1. AmerisourceBergen Corporation and a number of its subsidiaries: $625 million to resolve allegations that they 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.
2. HealthCare Partners Holdings LLC (HCP), doing business as DaVita Medical Holdings LLC: $270 million to resolve its liability for providing inaccurate information that caused Medicare Advantage Organizations (MAOs) to receive inflated Medicare payments.
3. Health Management Associations (HMA): $216 million to resolve civil allegations that it billed government healthcare programs for more costly inpatient services that should have been billed as observation or out-patient services, paid illegal remuneration to physicians in return for patient referrals to HMA hospitals, and inflated claims for emergency department facility fees.
4. United Therapeutics Corporation: $210 million to resolve allegations that it used a foundation as an illegal conduit to pay the co-pay obligations of thousands of Medicare patients taking its PAH drug.
5. William Beaumont Hospital: $84.5 million to resolve allegations of improper relationships with eight referring physicians intended to induce patient referrals.

Beyond the Numbers

The DOJ FY 2018 FCA report is noteworthy not just for the numbers but the enforcement trends it cites, including:

Aggressive Government and Taxpayer Watchdog: U.S. Health and Human Services Assistant Attorney General Jody Hunt noted that the “deceptive and fraudulent practices directed at the U.S. government and American taxpayer” will not be tolerated, indicating that DOJ has placed “a high priority on rooting out and pursuing those who cheat government for their own gain.”

Executive & Individual Accountability: As in the past, the DOJ has continued to go after individuals. Of the individuals the DOJ cited as being held personally liable for alleged false claims in 2018, several involved laboratory testing, including:

• Three individuals who were found to have paid physicians illegal remuneration disguised as “handling fees” of between $10 and $17 for each patient they referred to two blood testing labs: Health Diagnostic Laboratory (HDL) of Richmond, Virginia, and Singulex Inc. of Alameda, California, resulting in a $114 million settlement;
• Dr. Michael Frey, a pain management specialist and one of two principal owners of Advanced Pain Management Specialists P.A. in Fort Myers, Florida, who agreed to pay $2.8 million to resolve allegations that he violated the FCA in a number of ways, including receiving illegal kickbacks and by ordering medically unnecessary lab tests.

False Claims Act Recoveries in Qui Tam Cases against Healthcare Providers Since 2009
(In billions of dollars)

Takeaway: The DOJ’s reporting of FY 2018 fraud recoveries show that large scale and individual enforcement efforts continue—and that laboratory testing remains a target for enforcement agencies.