The U.S. Justice Dept. said it recouped a record $5.69 billion in settlements and judgments from False Claims Act cases during the fiscal year ended Sept. 30, including some $2.3 billion in recoveries from healthcare cases.
It’s the 1st time FCA cases have exceeded the $5 billion mark, the Justice Dept. said, noting that it’s recovered $22.75 billion in FCA cases since January 2009 – nearly half of all recoveries logged since the act was amended 28 years ago.
"In the past 3 years, we have achieved the 2 largest annual recoveries ever recorded under the statute," acting associate attorney general Stuart Delery said in prepared remarks. "This sustained success demonstrates that these figures result not only from large individual matters, but from a continuous commitment year after year to pursue those who defraud taxpayers and to remain vigilant in identifying those who would unlawfully obtain money from the federal fisc."
The recoveries included a $30 million settlement from Boston Scientific (NYSE:BSX) to settle a False Claims Act lawsuit filed over pacemakers made by its star-crossed Guidant subsidiary. The lawsuit, filed in 2008 by James Allen, accused Guidant of making false claims about the defibrillators between 2002 and 2005. Guidant continued to sell the devices even though it knew of their flaws, according to the Justice Dept. Guidant paid $296 million and pleaded guilty in 2010 to criminal charges that it deliberately concealed the defects.
"Medicare patients who depend on cardiac defibrillators should not have to worry about whether their devices will work when they are needed," Delery said at the time. "This settlement, along with the prior criminal prosecution of Guidant, demonstrates that there will be significant consequences when companies engage in conduct that threatens health and safety and violates the law."
It’s the 5th year in a row that the Justice Dept. has collected more than $2 billion in healthcare FCA cases, according to a press release.
The agency said there were more than 700 qui tam whistleblower suit filed during fiscal 2014. Recoveries from whistleblower lawsuits reached nearly $3 billion; the whistleblowers themselves received $435 million, according to the release.
The Justice Dept. also cited a pair of cases involving hospitals in Kentucky, King’s Daughters Medical Center and Saint Joseph Health System, that allegedly billed Medicare and Medicaid for unnecessary coronary procedures.
King’s Daughters paid $39 million in federal claims and $2 million in state Medicaid claims to settle the allegations involving coronary stents and diagnostic catheterizations and prohibited financial relationships with referring physicians, the DoJ said.
St. Joseph’s paid $16 million in federal claims and $366,000 in state Medicaid claims to settle allegations that it billed Medicare and Medicaid for "numerous" unnecessary invasive cardiac procedures including stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations, according to the department.
