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2018 Busy Year for HealthCare Whistleblowers

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2018 was a bad year to be a healthcare fraudster, busy for whistleblowers

Washington, DCOf more than $ 2.8 billion that the Department of Justice (DOJ)obtained in settlements and judgments from fraudsters in 2018, $2.5 billion involved the health care industry, and the largest recoveries came from drug and medical device manufacturers. And 2018 was a very good year for most all Whistleblowers (three whistleblower fraudsters were also busted last year.)

The 2018 recovery under the False Claims Act (FCA) is staggering, but it’s about ½ billion dollars less than the previous year, and the lowest since 2009. The FCA allows whistleblowers to sue companies that allegedly overcharge the federal government for certain services and products, most commonly healthcare fraud involving Medicaid and Medicare. After a whistleblower files a lawsuit, the federal government and eligible states can opt to join the plaintiff in prosecuting the action.

Five Healthcare Fraud Recoveries



1. Former hospital chain Health Management Associates (HMA) paid more than $260 million to resolve charges for improper billing and coding. It invoiced government health care programs for costlier inpatient services that should have been billed as observation or out-patient services; illegally paid physicians to refer patients to HMA hospitals, and inflated claims for emergency department facility fees. As if that isn’t enough, its subsidiary Carlisle HMA Inc., conspired to commit health care fraud by “ aggressively increasing admissions to the hospital”. It pleaded guilty paid $35 million.

2. Prime Healthcare Services Inc., paid $65 million to settle allegations that 14 Prime hospitals in California knowingly submitted false claims to Medicare by admitting patients who required only less costly, outpatient care and by billing for more expensive patient diagnoses than the patients had. Dr. Reddy, and Prime’s Founder and Chief Executive Officer, paid $3.25 million of the overall settlement.

3. AmerisourceBergen Corporation and subsidiaries paid $625 million to resolve allegations of repackaging drugs intended for cancer patients and profiting from the action.

4. Medical device manufacturer Alere paid $33.2 million to resolve claims of selling unreliable testing devices for use in the diagnosis of drug overdoses and other conditions.

5. A DaVita Inc. subsidiary paid $270 million to resolve allegations of providing inaccurate information about patients that caused Medicare Advantage plans to get inflated payments from the government.

In addition, 3M Company paid over $9 million to resolve allegations that it knowingly sold Combat Arms Earplugs to the United States military without disclosing defects that hampered the effectiveness of the hearing protection device, potentially causing hearing loss in veterans.

Kickback Schemes



According to the DOJ, three people paid physicians illegal remuneration disguised as “handling fees” of between $10 and $17 for each patient they referred to two blood testing laboratories. At the two-week jury trial, the government showed that this kickback scheme resulted in physicians referring patients to HDL and Singulex labs for medically unnecessary tests and then billed to federal health care programs. The three individuals found liable for violating the False Claims Act were fined $114 million.

Beaumont Hospital in Detroit resolved kickback allegations by four former employees turned whistleblowers for $84.5 million. The whistleblower lawsuit claimed that three Beaumont hospitals between 2004 and 2012 compensated eight physicians with free or substantially discounted office space and employees in exchange for patient referrals

Whistleblowers



Under the FCA, whistleblowers can receive up to 30 percent of any recovery, and they have helped the government recover more than $59 billion since the qui tam provision in 1986 allowed “relators” to file actions on behalf of the government. Whistleblowers now account for many more actions than the government, and they account for a huge share of all settlements and judgments. Thanks to qui tam and whistleblowers, government recoveries have soared.

Whistleblower Statistics



In 2018,Whistleblowers:

• Filed 645 qui tam suits in fiscal year 2018, an average of more than 12 new cases every week.
• Initiated 84% of new matters and accounted for 73% of the government’s recoveries.
• Received just over $301 million in awards.

Fraudulent Whistleblowers



Not all whistleblowers have good intentions. Some are downright fraudsters. DOJ dismissed 11 qui tam lawsuits brought by a “professional” whistleblower against multiple defendants. According to Forbes, the DOJ “seemed to express disdain” for a shell company set up by investors and former Wall Street investment bankers. The relator [whistleblower] saw FCA claims as a “massive business opportunity,” and the DOJ asked federal judges nationwide to dismiss such lawsuits against health care companies and said it spent hundreds of hours investigating kickback allegations only to find no merit to them.

READ ABOUT WHISTLEBLOWER LAWSUITS

Whistleblower Legal Help

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