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DOJ and HHS Report Record Recoveries from Healthcare Fraud

The Health and Human Services Department (HHS) and the Department of Justice (DOJ) recovered a record $4.2 billion from healthcare fraud investigations last year, according to their jointly issued Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2012. DOJ and HHS reported that it deposited the $4.2 billion to U.S. Department of Treasury and Centers for Medicare & Medicaid Services (CMS) accounts. On average over the last three years, the federal government has recovered $7.90 for every dollar it spends investigating healthcare fraud and abuse. This is the highest three-year average return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program.

The bulk of these recoveries, it appears, are from pharmaceutical and device manufacturers and wholesalers. In July 2012, GlaxoSmithKline paid over $3 billion in a settlement deal to resolve its criminal and civil liability arising from the company’s failure to report certain safety data, its alleged false price reporting practices, and its unlawful promotion of certain prescription drugs. In November 2011, Merck Sharp & Dohme paid $950 million to resolve its criminal and civil liabilities related to its promotion and marketing of the painkiller Vioxx. In April 2012, McKesson Corporation paid $190 million to resolve claims that it violated the FCA by reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs.

The DOJ also reported the number of its enforcement actions. In 2012, the DOJ opened 1,131 new criminal and 885 new civil healthcare fraud investigations. The DOJ also reported that 826 criminal defendants were convicted of healthcare fraud-related crimes during the FY 2012. Furthermore, the Office of Inspector General (OIG) excluded 3,131 individuals and entities based on criminal convictions for crimes related to Medicare and Medicaid, patient abuse or neglect, and as a result of licensure revocations.

HHS and the DOJ claim that the record recoveries stem from the new anti-fraud programs, including the anti-fraud task force implemented in 2009, the Health Care Enforcement Team initiatives and Strike Forces, and the CMS Command Center. The HCFAC report noted the success of Health Care Enforcement Team initiatives, including the Strike Forces of investigators and prosecutors in nine cities: Miami, FL; Los Angeles, CA; Detroit, MI; Houston, TX; Brooklyn, NY; Baton Rouge, LA; Tampa, FL; Chicago, IL; and Dallas, TX. According to the DOJ, these Strike Forces filed 117 criminal charges against 278 defendants; obtained 251 guilty pleas; litigated 13 jury trials (with guilty verdicts against 29 defendants); and sentenced 201 defendants to prison terms averaging more than 48 months of incarceration. Furthermore, CMS also established the Command Center to improve health care-related fraud detection and investigation, drive innovation, and help reduce fraud and improper payments in Medicare and Medicaid. From May 2011 through the end of 2012, more than 400,000 providers were subject to the new screening requirements and nearly 150,000 lost the ability to bill the Medicare program due to the Affordable Care Act requirements and other proactive initiatives.

In light of the record number in recovery amounts and the increased funding to support initiatives to detect fraud and abuse, now is a better time than ever for health care providers to analyze their current compliance plans and policies. If you need assistance in developing an effective compliance plan to detect and prevent fraud and abuse, or have any other health care law questions, please contact an experienced health care attorney at Wachler & Associates attorney at 248-544-0888.

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