On December 14, 2016, the Department of Justice (DOJ) announced that it recovered more than $4.7 billion in settlements and judgments involving fraud and false claims in fiscal year 2016.  The fiscal year 2016 recovery represents the third highest annual recovery in the history of the False Claims Act (FCA).  Since 2009, the government has recovered $19.3 billion in healthcare fraud claims. 

Claims Related to the Healthcare Industry.  The bulk of the recoveries in FY 2016 came from the healthcare industry at $2.5 billion.  Of that $2.5 billion, $1.2 billion came from the drug and medical device industry, $360 million came from hospitals and outpatient clinics, $260 million came from the medical laboratory industry, and $160 million came from skilled nursing facilities. 

According to the recently updated fraud statistics, which were released in connection with the press release, the number of DOJ-initiated healthcare FCA actions increased from 26 in FY 2015 to 69 in FY 2016.  Additionally, the number of qui tam suits involving the healthcare industry rose from 426 in FY 2015 to 501 in FY 2016.

Individual Accountability.  In keeping with the principles articulated in the September 9, 2015 Yates Memo, the DOJ reiterated its commitment “[t]o use the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations.”  To that end, the press release identifies several instances where the government pursued claims against individuals, including, but not limited to, the following:

• Ralph J. Cox III, the former CEO of Tuomey Healthcare System, agreed to pay $1 million to settle FCA allegations for billing federal healthcare programs for services referred by physicians with whom the healthcare system had improper financial relationships.
• Dr. Asad Qamar and his practice paid $2 million and released claims to an additional $5.3 million in suspended Medicare funds in order to settle allegations that he billed federal healthcare programs for unnecessary procedures and paid kickbacks to patients by waiving their copayment amounts. Dr. Qamar also agreed to a three-year exclusion from federal healthcare programs that will be followed by a three-year integrity agreement with OIG.
• Dr. Jonathan Oppenheimer, former owner and CEO of a drug testing laboratory, OPKO Health, Inc., and OPKO Lab, LLC agreed to pay $9.35 million to resolve FCA allegations with the government.

• Dr. David G. Bostwick agreed to pay $3.75 million to settle FCA allegations that he billed Medicare and Medicaid for medically unnecessary cancer detection tests and offered incentives to physicians to obtain Medicare and Medicaid business.
• Dr. David Spellberg agreed to pay $1.05 million to settle FCA allegations that he caused claims to be submitted to federal healthcare programs for tests that were not medically necessary.

Whistleblower Suits.  Suits brought under the qui tam provisions of the FCA accounted for approximately $2.9 billion of the government’s total $4.7 billion recovery in fiscal year 2016.  The DOJ press release reported that “[t]he number of lawsuits filed under the qui tam provisions of the [FCA] has grown significantly since 1986, with 702 qui tam suits filed this past year—an average of 13.5 new cases every week.”

For further information, please see the below links:

• The DOJ press release can be found by clicking here;

• The DOJ Fraud Statistics can be found by clicking here; and
• The Fact Sheet on Significant False Claims Act Settlements and Judgments for Fiscal Years 2009–2016 can be found by clicking here.