Healthcare organizations faced a higher level of fraud scrutiny in 2014 than ever before--and it's a trend that experts believe will continue throughout 2015, according to a report by the law firm Bass Berry & Sims PLC.
The report breaks down the $5.7 billion recovered by the federal government under the False Claims Act (FCA) in 2014, noting that, for the fifth straight year, more than $2 billion of that was related to false claims against federal healthcare programs. Furthermore, whistleblowers made up a large chunk of FCA claims, bringing more than 700 so-called qui tam lawsuits for the second straight year. They were compensated handsomely for their services, as payment totals made to whistleblowers jumped nearly $100 million from the previous year.
Beyond the number of whistleblower cases, authors of the report say that the kinds of qui tam cases brought against healthcare organizations revealed new avenues of liability. In 2014, there were multiple qui tam lawsuits brought by competitors rather than just current or former employees. In one particular case, Ameritox Ltd was awarded $15 million after bringing claims against its competitor, Millennium Laboratories Inc.
Since the FCA was amended in 2010, the feds have shown an increased willingness to intervene on whistleblower cases. Last year was no different, as 95 percent of recoveries were attributed to intervened cases. Given the fact that the Department of Justice announced its criminal division will work closely with the civil division on whistleblower cases, authors of the report indicated that 2015 may bring additional parallel investigations.
While FCA settlements tied to hospitals contributed $300 million in recoveries, the feds turned many of their investigations toward individual physicians, particularly those with unusually high Medicare reimbursement. Although physicians have frequently been left out of cases alleging violations of the Anti-Kickback Statute, more doctors were wrapped into litigation for accepting kickbacks such as sham consulting and medical director agreements to increase referrals.
"As the entire healthcare industry is going through a period of unprecedented change, we are witnessing intense scrutiny of healthcare organizations as it relates to alleged fraud in federal healthcare programs," Brian D. Roark, head of the Healthcare Fraud Task Force at Bass Berry & Sims, said in an announcement.
Previous legal reports have detailed FCA trends in 2014, paying particular attention to reverse false claims cases and the widening scope of liability for FCA retaliation. FCA litigation remains a huge concern for healthcare organizations, and many are taking steps to properly enforce effective management policies.