Once more, health care tops lists of False Claims Act violations

Health care fraud topped the list of federal crackdowns last year under the False Claims Act, accounting for more nearly all of the $5.6 billion in settlements and judgments.

The U.S. Department of Justice said this month it obtained $5 billion from drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories and physicians. The health-care sector routinely tops the list of settlements and judgments under the False Claims Act.

Of the major settlements, one company from Indiana was named in the Justice Department’s announcement. Indianapolis-based Apria, a home-health care supplier, agreed to pay $40 million to settle a complaint that it violated the False Claims Act by seeking Medicaid reimbursement for ventilation machines that were not medically necessary or reasonable.

According to the settlement agreement, starting in August 2014, Apria encouraged physicians to order non-invasive ventilators for their patients. Yet the company failed to conduct in-home visits to verify that patients were still using the equipment.

Even when its respiratory therapists indicated that patients had stopped using the equipment, Apria “often did not take steps to stop seeking payments,” the settlement agreement said.

A whistleblower lawsuit at Apria led to a major investigation. In an interview with IBJ last year,  Apria CEO said he was happy to have the investigation behind him.

“We are now able to get back to focusing only on making sure that we fulfill our mission, which is improving the quality of life for our patients at home,” Starck said.

The company announced last month it had agreed to be bought by global health care products distributor Owens & Minor Inc. of Richmond, Virginia, for about $1.6 billion.

Whistleblowers filed 598 suits last year, and this past year the justice department reported settlements and judgments exceeding $1.6 billion in these and earlier-filed suits.

The False Claims Act serves as the government’s primary civil tool to redress false claims involving vendors for numerous government programs, including Medicare and Medicaid.

Some other large amounts collected include settlements or judgements against:

  • Connecticut-based Purdue Pharma, which agreed to an unsecured bankruptcy claim of $2.8 billion to resolve civil allegations that the company promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary.
  • Diabetic testing supply company Arriva Medical LLC of Florida and its parent, Alere Inc. of Illinois, which agreed to pay $160 million to settle allegations that Arriva paid kickbacks to Medicare beneficiaries by providing them “free” or “no cost” diabetic testing glucometers and by routinely waiving or not making reasonable efforts to collect their copayments.
  • Sutter Health of California, which paid $90 million to resolve allegations that it knowingly submitted unsupported diagnosis codes for certain patient visits, resulting in inflated payments to be made to the Medicare Advantage Plans.
  • Electronic health records technology vendor Athenahealth Inc. of California, which agreed to pay $18.25 million to resolve allegations that it invited customers and prospective customers to lavish all-expense-paid sporting, entertainment, and recreational events to generate sales of its EHR products.
  • Kaiser Foundation Health Plan of Washington, which paid $6.3 million to resolve allegations that it submitted invalid diagnoses and received inflated payments as a result.
  • Indivior Inc. of Virginia, which paid $209.3 million to resolve civil allegations that the company promoted the opioid-addiction-treatment drug Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and were often diverted.
  • Three generic pharmaceutical manufacturers, Taro Pharmaceuticals of New York, Sandoz Inc. of New Jersey and Apotex Corp. of Florida, which paid more than $400 million to resolve allegations that they paid and received compensation prohibited by the Anti-Kickback Statute through arrangements on price, supply and allocation of customers with other pharmaceutical manufacturers as part of a conspiracy to fix the price of certain generic drugs.

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3 thoughts on “Once more, health care tops lists of False Claims Act violations

  1. What is the status of the federal prosecution of Community Health Network which was indicted several years ago, as I recall, under the False Claims Act?

    1. Both sides are still in the discovery phase. No trial date set yet. Lots of documents still under seal. Here is IBJ’s latest story from November.

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