Justice Department recovers $1.12 billion from fraud

Anne Zieger — Tue, 11 Nov 2008 09:16:07 -0500

Every year the Justice Department tries to recover as much as it can from healthcare organizations that have allegedly defrauded them: this year the total it recovered was $1.12 billion dollars.

This is down slightly from last year, when the Justice Department recovered a reported $1.53 billion. However, the year-to-year results are not directly comparable, since some of the settlements made in one year are actually included in the next year's total.

Of the fraud and False Claim Act actions that the department recovered this year, healthcare accounted for 84 percent of the total amount secured.

Some of the biggest cases of the year included Merck & Co's $361.5 million settlement to resolve allegations involving Medicaid rebates and Pepcid discounts for hospitals, Cephalon's $258 million to resolve alleged marketing off-label uses for three of its drugs, and Amerigroup's $225 million to end a case involving allegedly turning away or discouraging enrollment of pregnant women and other high-cost patients in Illinois.

To learn more about the recoveries:
- read this Modern Healthcare piece (reg. req.)

Department of Justice faces 500-case healthcare whistle-blower backlog

Anne Zieger — Wed, 02 Jul 2008 11:08:01 -0400

In theory, having scores of whistle-blowers file cases identifying potential fraud is a good thing. However, a recent surge in such cases has so overwhelmed staff at the U.S. Department of Justice that they're facing a backlog of more than 900 cases claiming that companies have defrauded the federal government, 500 of which involve pharmaceutical and healthcare firms.

Since 2001, whistle-blowers have filed 300 to 400 civil cases each year, but the 75-lawyer unit charged with reviewing such allegations only has the capacity to investigate about 100 cases each year. For that reason, whistle-blowers may wait more than a year to find out whether the DoJ is even prepared to move forward with their case. While the DoJ rejects about three-quarters of such cases as lacking merit, it's also made some spectacular cases work. In one striking example, it reached a $650 million settlement with Merck this year in connection with their alleged failure to repay Medicaid rebates.

Even given the constraints the agency faces, it has managed to collect almost $13 billion in recent years. Given this success, advocates are increasingly pressing for DoJ to invest more resources in catching up on the backlogged filings.

To learn more about this issue:
- read this Kaiser Daily Healthcare Policy Report article

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fraud settlement

Justice Department recovers $1.12 billion from fraud

Department of Justice faces 500-case healthcare whistle-blower backlog