Whistleblowers helped the government collect $3 billion in fines and recoveries in fiscal year 2019, up from $2.8 billion in 2018.
Medicare and Medicaid were big targets for fraudsters this year, as they have been in years past, according to the annual report from the Department of Justice. The list also includes military contractors, universities and a fish oil producer. Read the full list here.
From the report:
Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.
“Whistleblowers continue to play a critical role identifying new and evolving fraud schemes that might otherwise remain undetected,” said Assistant Attorney General Hunt. “Taxpayers have benefitted greatly from these individuals who are often required to make substantial sacrifices to bring these schemes to light.”
Most of the cases involved health care, according to the report.
Of the more than $3 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.6 billion relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians. This is the tenth consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion.
Two big cases: Opioid manufacturers. Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to prescribers in “the form of sham speaker events, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.” More here from STAT News on Insys.
The report notes that Avanir Pharmaceuticals paid over $95 million to resolve allegations that it paid kickbacks to get healthcare providers to prescribe an off-label drug to dementia patients. Here is Avanir’s take on the case.
Many cases involved Illegal-copayments from drug companies. The payments may help individual patients, but they add to the cost of care by encouraging the use of expensive new drugs when there may be an effective alternative. Often, the payment comes through a company-funded foundation.
This year, seven drug manufacturers –Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – paid a combined total of over $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.
The military is another target for fraud. Northrop Grumman Systems Corporation (NGSC) paid $27 million to settle claims that it overcharged the Air Force for two battlefield communications programs in the Middle East. Other companies were fined for defrauding NASA and the Department of Defense, according to the report.
Omega Protein Corp., which makes fish oil products, paid $1 million for lying o the National the Oceanic and Atmospheric Administration about its compliance with federal environmental laws while “knowingly and unlawfully discharging pollutants and oil into U.S. waters.”
Two universities also paid fines. Duke University, where research was marred by faulty lab tests, paid $112.5 million for defrauding the National Institutes of Health. North Greenville University in South Carolina was fined for paying private recruiters for each student enrolled.
The incentive compensation ban protects students against aggressive admissions and recruitment practices that serve the financial interests of the recruiter, rather than the educational needs of the students.
For more background
Stat News on Insys