False Claims Act settlements and judgments exceeded $2.68 billion in the fiscal year that ended Sept. 30, with more than $1.8 billion of the total related to matters involving healthcare fraud, including fraud by long-term care providers, the Justice Department has announced.
The number of settlements and judgments, 543, represented an all-time high for a single year, the department said Thursday.
“The False Claims Act remains one of our most important tools for rooting out fraud, ensuring that public funds are spent properly and safeguarding critical government programs,” Acting Associate Attorney General Mizer said in a statement.
The act imposes damages and penalties on those who knowingly and falsely claim money from the United States or knowingly fail to pay money owed to the United States. In the case of healthcare, recoveries restore funds to federal programs such as Medicare and Medicaid.
In fiscal year 2023, cases involved false claims in the Medicare Advantage program, providers that have played a role in contributing to and exacerbating issues related to opioids, unlawful kickbacks paid or received by healthcare providers, and providers billing for unnecessary services and substandard care. Regarding the latter category, the DOJ said that the “provision of such medical services not only wastes taxpayer funds but also can expose patients to harmful procedures and treatments or cause them to forego other potentially more effective treatments.”
One example cited by the federal government involved Saratoga Center for Rehabilitation and Skilled Nursing Care in Ballston Spa, NY, related entities, and operators and owners Leon Melohn, Alan “Ari” Schwartz, Jeffrey Vegh and Jack Jaffa. The Justice Department said they agreed to pay $7.1 million to resolve allegations that Saratoga Center “delivered worthless services to residents, resulting in medication errors, unnecessary falls and the development of pressure ulcers, and that the facility’s physical conditions deteriorated to such a degree that the facility did not consistently maintain hot water, have an adequate linen inventory, or dispose of solid waste.”
In addition to settlements and judgments related to healthcare fraud, other types of fraud cited by the DOJ for fiscal year 2023 included procurement fraud, pandemic fraud and cyber fraud.
More than $2.3 billion of the $2.68 billion in settlements and judgments reported by the government involved lawsuits filed by whistleblowers in fiscal year 2023 or earlier, the DOJ said, noting that whistleblowers typically receive 15% to 30% of the amount recovered in a successful case. Whistleblowers filed 712 so-called qui tam lawsuits in fiscal year 2023, and the government said it paid out more than $349 million to the individuals who exposed fraud and false claims by filing qui tam actions during that time.
The number of whistleblower lawsuits has grown “significantly” since 1986, when Sen. Charles Grassley (R-IA) and then-Rep. Howard Berman (D-CA) led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud, the Justice Department said.
“We are grateful for the hard work and courage of whistleblowers who play a critical role in identifying fraud, often at substantial risk to themselves,” Principal Deputy Assistant Attorney General Boynton said. “Our efforts to ensure that public funds are spent properly continue to benefit greatly from their actions.”
Justice Department officials plan to continue to make tackling healthcare fraud a priority in 2024, according to an account of officials speaking at a recent Federal Bar Association Qui Tam Conference. Law firm Duane Morris posted the account.
The department, according to the post, will have “a particular focus on anti-kickback and Stark law issues, more ‘sophisticated efforts’ by providers to ‘buy referrals’ through managed services organizations, cases involving ‘grossly substandard care’ in nursing homes and fraud in connection with Medicare Part C risk-adjustment calculations.” Medicare Part C-related enforcement efforts will focus on insurance company conduct and also the role that vendors and providers play in calculations provided to the government, according to the post, citing the Justice Department.
Read more coverage in McKnight’s Long-Term Care News.
