The federal government obtained $5.69 billion in settlements and judgments from civil cases involving false claims and fraud this year, and about 40 percent of that total involved healthcare programs, former U.S. Department of Health and Human Services (HHS) Inspector General Richard Kusserow reported.
These numbers support the argument that the False Claims Act (FCA) has become "the signature anti-fraud weapon of the United States," as attorney Sean McKenna told FierceHealthPayer: AntiFraud in an exclusive interview.
Most false claims actions are filed under the law's whistleblower provisions allowing private citizens to file lawsuits on behalf of the government. There have been more than 700 of these cases this year, Kusserow noted, with the vast majority in healthcare. From 2009 through the close of fiscal 2014, the government paid whistleblower awards of more than $2.47 billion. Significant cases involved the pharmaceutical industry,hospitals and home health agencies.
Financial payoffs for whistleblowers, their lawyers and the government are contributing to the spike in cases, according to Becker's Hospital Review. Many law firms are "chasing the pot of gold" by focusing their practices on FCA complaints, while the government can reap an estimated 20-to-1 investment return in these cases. With incentives like these, "there's no reason for the enforcement trend not to continue to increase," attorney Shannon DeBra told Becker's.
Moreover, the Affordable Care Act created new avenues of FCA enforcement. The law clarified that an overpayment that isn't reported and refunded within 60 days after its identification by a healthcare provider becomes an obligation to pay for purposes of the FCA, as attorney Leslie Levinson told FierceHealthcare. Failure to report overpayments could subject providers to monetary penalties and treble damages.
Another contributing factor to the uptick in cases is that criminal prosecutors in the Department of Justice are now required to investigate FCA complaints more actively, Becker's reported.
But criticism has been leveled at the Justice Department despite high-dollar settlements resulting from FCA implementation. "For some in the healthcare industry, civil settlements are treated more like a cost of doing business than a true deterrent to fraudulent conduct," DeBra told Becker's.