The Department of Justice obtained $2.4 billion in fraud and false claims settlements and judgments in fiscal year 2017, marking the eighth consecutive year recoveries in the healthcare sector exceeded $2 billion.
Here are four things to know about the DOJ’s false claims and fraud recoveries.
1. The DOJ recovered more than $900 million from the drug and medical device industry in fiscal year 2017. That total includes Shire Pharmaceuticals’ $350 million settlement. The settlement resolved allegations Shire, a multinational pharmaceutical company with its U.S. headquarters in Lexington, Mass., and one of its subsidiaries paid kickbacks and used other unlawful means to induce physicians and clinics to use or overuse Dermagraft, a bioengineered human skin substitute approved by the Food and Drug Administration for the treatment of diabetic foot ulcers. The settlement was the largest False Claims Act recovery by the federal government in a kickback case involving a medical device.
2. The DOJ also reported substantial recoveries from healthcare providers, including Cleveland, Tenn.-based Life Care Centers of America, which agreed to pay $145 million to settle allegations it caused skilled nursing facilities to submit fraudulent claims to Medicare for unnecessary rehabilitation services.
3. In another substantial settlement this year, Westborough, Mass.-based eClinicalWorks, an EHR vendor, and some of its executives and employees agreed to pay $155 million to resolve false claims allegations. The government alleged eClinicalWorks falsely obtained certification for its EHR software by withholding information from its certifying entity. Due to eClinicalWorks’ alleged misrepresentations, healthcare organizations using the company’s software submitted false claims for federal incentive payments, according to the DOJ.
4. In 2017, the DOJ continued to pursue physicians and healthcare executives involved in fraud cases to hold them personally responsible. For example, in 2015, Fort Myers, Fla.-based 21st Century Oncology paid $19.75 million to settle allegations it violated the False Claims Act by billing for medically unnecessary laboratory urine tests and paid bonuses to physicians based on the number of tests they referred to its laboratory. This year, the DOJ secured separate settlements with various urologists who allegedly referred unnecessary tests to one of 21st Century Oncology’s labs.