Health Leaders

By John Commins     January 09, 2020

The federal government collected more than $3 billion from False Claims Act cases in 2019, and $2.6 billion of it came from the healthcare sector, the Department of Justice announced.

It’s the tenth straight year that DOJ’s civil healthcare fraud settlements and judgments have exceeded $2 billion, and the recoveries in 2019 came from drug and medical device makers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

The $2.6 billion reflect only federal losses, and do not include the additional millions of dollars recovered for state Medicaid programs.

Much of the recoveries were spurred by the 633 whistleblower lawsuits filed in 2019, which DOJ credited with helping in the recovery of $2.1 billion.

Among the larger FCA settlements of 2019:

  • Opioid maker Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to clinicians to prescribe Subsys for their patients. The kickbacks allegedly took the form of sham speaker events, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.

    DOJ also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer and lied to insurers about patients’ diagnoses to ensure payment by federal healthcare programs.

  • Opioid addiction treatment maker Reckitt Benckiser Group plc paid a total of $1.4 billion to resolve criminal and civil liability related to the marketing of Suboxone, which is a formulation of the opioid buprenorphine.
  • Avanir Pharmaceuticals paid more than $95 million to resolve allegations that it paid kickbacks and engaged in false marketing to induce long-term care facilities to prescribe the drug Neudexta for behaviors commonly associated with dementia patients, which is an unapproved use of the drug.
  • Other notable collections involved Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc.Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – who paid a combined total of more than $624 million to resolve claims that they illegally paid patient copays for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits.
  • Pathology laboratory company Inform Diagnosticsformerly known as Miraca Life Sciences Inc., paid $63.5 million to resolve allegations that it paid kickbacks to referring physicians in the form of subsidies for electronic health records systems and free or discounted technology consulting services.
  • EHR vendor Greenway Health LLC, paid more than $57 million to resolve allegations that it misrepresented the capabilities of its EHR product “Prime Suite” and provided unlawful remuneration to users to induce them to recommend Prime Suite to prospective new customers.
  • Inpatient rehabilitation facilities operator Encompass Health Corporation (formerly known as HealthSouth Corp.), paid $48 million to resolve allegations that some of its IRFs provided inaccurate information to Medicare to maintain their status as an IRF and to earn a higher rate of reimbursement, and that some admissions to its IRFs were not medically necessary.