While 2020 marked a decade low for the amount recovered by the Department of Justice (“DOJ”) from False Claims Act (“FCA”) cases, fiscal year 2021 brought in $5.6 billion, the highest amount of recoveries for these cases since 2014. Notably, over $5 billion of the recovered amount stemmed from cases within the healthcare sector alone.
Nearly half of 2021’s total recovery came from a settlement with Purdue, in which Purdue paid $2.8 billion to resolve claims Purdue violated the False Claims Act; the settlement was part of a global resolution of Purdue’s criminal and civil liability relating to its promotion of opioids to certain healthcare providers where it knew those medications were medically unnecessary and often diverted.
In addition to recoveries pertaining to opioids, the DOJ’s 2021 recovery reflects its targeting of matters related to Medicare Advantage programs over the last several years, from which at least two notable 2021 settlements were derived. Sutter Health paid $90 million to resolve allegations that it violated the False Claims Act by knowingly submitting unsupported diagnosis codes resulting in inflated reimbursements to the company and to the Medicare Advantage Plans. Group Health Cooperative, a Medicare Advantage Organization, paid $6.3 million to resolve similar allegations. Much of the remainder of the DOJ’s 2021 healthcare recovery stemmed from allegations providers engaged in providing unlawful kickbacks, billed for medically unnecessary services and engaged in COVID-related fraud.
While the DOJ experienced significant recoveries during the 2021 fiscal year, this does not signal to a forthcoming decrease in enforcement or collection efforts, especially for those within the healthcare sector, from which nearly 90% of the DOJ’s 2021 recovery was derived. To the contrary, not only did 2021 see one of the highest numbers of new healthcare False Claims Act cases filed by the government (almost 100 new cases), but it also saw the filing of 388 new healthcare qui tam cases, a significant figure given that qui tam recoveries in the healthcare sector accounted for over 25% (almost $1.5 billion) of the total $5.6 billion retrieved in 2021. Given the amount of newly initiated cases in 2021 combined with the multitude of foci in DOJ’s enforcement and its emphasis on investigations into those within the healthcare sector, providers as well as all stakeholders within the distribution chain should expect and prepare for additional enforcement actions brought by the government in 2022 and beyond.
How Frier Levitt Can Help
Frier Levitt is dedicated to defending those in the distribution chain against government and whistleblower allegations that the False Claims Act has been violated. Additionally, Frier Levitt assists its clients in prospectively avoiding running afoul of the False Claims Act, among regulations, by developing compliance plans and advising individuals and organizations on to develop and grow their businesses in a manner that conforms to law. Contact us today to discuss potential avenues for your business while ensuring compliance with the applicable laws and regulations.
