Federal officials collected more than $1.7 billion in settlements for healthcare fraud during the latest federal fiscal year that ended in September, with Medicaid fraud a leading factor.
The Department of Justice (DOJ) announced Wednesday that it collected $2.2 billion in False Claims Act settlements and judgments for the federal fiscal year 2022 that ended Sept. 30. This is the second-highest number of settlements and judgments collected by the government in a single year, the DOJ said.
“The large number of settlements and judgments this past year demonstrates that the False Claims Act remains one of the most important tools for ensuring that public funds are spent properly and advance the public interest,” said Principal Deputy Assistant Attorney General Brian Boynton in a statement.
The DOJ noted that healthcare collections made up most of the False Claims Act settlements and judgments. The $1.7 billion in collections range from fraud in Medicaid, Medicare Advantage (MA) overpayments, unlawful kickbacks and substandard care.
The largest settlement came from drugmaker Biogen, which paid $843.8 million to resolve allegations that it offered kickbacks to physicians in the form of speaker training and consulting fees, meals and honoraria in connection with its multiple sclerosis products Avonex, Tysabri and Tecfidera.
Another major settlement involved Mallinckrodt, a pharmaceutical company, for $260 million to resolve allegations that the company knowingly underpaid Medicaid drug rebates, the DOJ said in a release.
The agency said the company allegedly designated its Acthar Gel as new “as opposed to a preexisting drug for which Mallinckrodt had significantly raised the price in years prior.”
Mallinckrodt was also accused of using copay subsidies as illegal kickbacks to doctors to market Acthar as free even as the price increased.
Some healthcare providers were also dinged last year for offering substandard care. For example, Providence Health and Services paid the DOJ $22.7 million to settle allegations that it billed federal programs for unnecessary neurosurgeries.
The DOJ also pursued several cases of MA overpayments where an insurer “knowingly submitted or caused the submission of inaccurate information or knowingly failed to correct inaccurate information about the health status of beneficiaries enrolled in their plans to increase reimbursement,” the release said.
The agency intervened in a case against the insurer Cigna and said that it continues to litigate other cases against Elevance Health, UnitedHealth Group and Kaiser Permanente.
DOJ’s actions on MA come as the federal government has increased scrutiny on the sources of Medicare overpayments to plans. The Centers for Medicare and Medicaid Services has sought to overhaul how risk adjustment audits of MA plans are conducted in an attempt to curb overpayments to plans.
The $1.7 billion in healthcare collections is far below the more than $5 billion the agency collected for the fiscal year 2021.