Corruption News

DOJ Recovered $3.1B Following 2020 Healthcare Fraud Investigations


By Jill McKeon

– In efforts led by the Department of Justice (DOJ), $3.1 billion was paid out to the federal government and private persons in 2020 as a result of healthcare fraud investigations, according to an annual report from the Health Care Fraud and Abuse Control Program (HCFAC).

The HCFAC program was established in 1996 under the Health Insurance Portability and Accountability Act (HIPAA) and is a joint effort between the attorney general and HHS.

Over $1.8 billion was paid out because of 2020 healthcare fraud judgments and settlements. Adding in efforts from previous years resulted in a total 2020 payout of $3.1 billion. Of the $3.1 billion, Medicare Trust Funds received transfers of $2.1 billion, in addition to the $128.2 million in federal Medicaid funds transferred separately to the Department of the Treasury.

The DOJ opened 1,148 new criminal healthcare fraud investigations in 2020, leading to 440 convictions. In addition, the DOJ opened 1,079 civil healthcare fraud investigations and ended the year with almost 1,500 pending civil cases.

FBI investigations resulted in “over 407 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 101 [healthcare] fraud criminal enterprises,” the report added.

Medicare and Medicaid fraud led to 578 criminal action and 781 civil actions, including false claims, civil monetary penalties settlements, unjust-enrichment lawsuits, and administrative recoveries over provider self-disclosure issues.

HHS’s Office of the Inspector General (HHS-OIG) also barred over 2,000 individuals and entities from participating in Medicare and Medicaid based on criminal activity such as patient abuse and neglect.

The report noted that over $10 million in HCFAC program funds were sequestered in 2020, leaving the federal government with less resources. Since 2013, a total of $220.6 million has been sequestered from HCFAC funds. Over $19 million was sequestered in 2019 alone, but the federal government recouped $3.6 billion in FY 2019, according to a previous HCFAC report.

The HCFAC report also highlighted some key criminal and civil investigations that led to the recuperation of billions in funds in 2020. One of the biggest drug-related settlements resulted from allegations against Novartis Pharmaceuticals regarding False Claims Act violations. Novartis agreed to pay over $642 million to resolve the allegations.

In the first ever kickback action against an EHR vendor for receiving payments from a pharmaceutical company, San Francisco-based Practice Fusion agreed to pay $145 million to resolve criminal and civil allegations.

Despite the global pandemic, 2020 was a breakthrough year for healthcare fraud takedowns. One Florida chiropractor was charged for allegedly obtaining loans from COVID-19 relief programs and submitting false Medicare claims. Another takedown involved 10 conspirators taking over rural hospitals that were financially struggling and using them to fraudulently bill private payers for services performed at outside laboratories.

Healthcare fraud continues to be prevalent in 2021. Akron General Health System in Ohio, owned by the Cleveland Clinic, recently reached a civil settlement and agreed to pay $21 million for allegedly violating the False Claims Act. The health system supposedly submitted Medicare claims for services issued to illegally referred patients, which also violated the Anti-Kickback Statute.

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