Justice Department healthcare fraud recoveries top $2.4 billion in FY 2017

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Justice Department healthcare fraud recoveries top $2.4 billion in FY 2017
Justice Department healthcare fraud recoveries top $2.4 billion in FY 2017

Settlements with Life Care Centers of America and eClinicalWorks marked two of the largest healthcare fraud-related recoveries by the federal government in the fiscal year ending Sept. 30, the Justice Department announced Dec. 21.

The department said it obtained more than $3.7 billion in settlements and judgments from civil cases involving all types of fraud and false claims against the government in the fiscal year, and more than $2.4 billion of that amount involved losses to federally funded healthcare programs such as Medicare, Medicaid and TRICARE.

Life Care Centers of America and its owner agreed to pay $145 million to settle rehabilitation-overbilling accusations, the Justice Department originally had announced in October. The Cleveland, TN-based company is the nation's largest privately held skilled care operator and also offers assisted living and independent living services.

The settlement marked the largest-ever settlement involving a privately held multi-facility owner, according to federal officials.

The firm was accused of submitting false claims for seven years, beginning in 2006. Residents allegedly were placed in ultra high therapy reimbursement categories as a way to increase Medicare and veterans' care payments. Therapy also was administered to residents who either did not need or no longer required such assistance, federal officials claimed.

In a statement to McKnight's at the time, the company said it “strongly disagreed with the allegations and believes that it was entitled to payment for services rendered.” As part of the deal, the firm admitted to no wrongdoing.

Other major healthcare fraud recoveries in the fiscal year ended Sept. 30, according to the Justice Department:

  • National electronic health records software vendor eClinicalWorks paid $155 million to resolve allegations that it falsely obtained certification for the company's EHR software by concealing from its certifying entity that its software did not comply with the requirements for certification. The Justice Department originally announced the settlement in May.

  • Drug manufacturer Mylan paid approximately $465 million to resolve allegations that it underpaid rebates owed under the Medicaid Drug Rebate Program by erroneously classifying its patented, brand-name drug EpiPen as a generic drug to avoid its obligation to pay higher rebates.

  • Shire Pharmaceuticals paid $350 million to resolve allegations that Shire and the company it acquired in 2011, Advanced BioHealing, induced clinics and physicians to use or overuse its bioengineered human skin substitute by offering dinners, drinks, entertainment and travel; medical equipment and supplies; unwarranted payments for purported speaking engagements and bogus case studies; and cash, credits and rebates.

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