False claims settlements in healthcare total $1.7B in 2024

Dive Brief:

• The Department of Justice recorded over $2.9 billion in settlements and judgments under the False Claims Act in 2024, with the majority of settlements coming from healthcare.
• Healthcare settlements totaled $1.67 billion. The money will go toward restoring defrauded federal healthcare programs, including Medicare, Medicaid and the military health program Tricare, according to Wednesday’s release.
• The DOJ once again said fraud enforcement in Medicare Advantage is of “critical importance.” Concerns about MA fraud have grown in recent years as the program has increased in popularity.

Dive Insight:

The FCA seeks to hold companies and individuals accountable for knowingly and falsely claiming money, or knowingly failing to pay funds owed to the U.S. government. For the past several years, the majority of federal FCA enforcement has centered on healthcare, as regulators have attempted to crack down on fraud.

In a news release, the DOJ said many of its investigations last year targeted providers that billed federal healthcare programs for medically unnecessary services and substandard care, or engaged in referral kickback schemes.

Community Health Network, for example, paid more than $300 million after the government found physicians were awarded referral-based bonuses, in violation of the Stark Law. The rule aims to decrease conflicts of interest and protect patients from receiving unnecessary care by barring healthcare providers from referring patients to companies they are tied to financially.

The agency also sought settlements against providers, pharmaceutical companies and pharmacies that allegedly leveraged the opioid epidemic to defraud the government.

Endo Health, for example, was accused of encouraging doctors to prescribe its opioid drug Opana ER for off-label purposes that hadn’t been approved by the Food and Drug Administration, resulting in inflated reimbursement claims from federal healthcare programs. 

Regulators have also sought to tamp down on healthcare fraud in MA plans as the coverage option has grown increasingly popular.

Under the program, private insurers manage the care of Medicare beneficiaries. However, the government has accused several of the nation’s leading MA providers of upcoding, or reporting additional or more severe medical diagnoses to receive higher levels of reimbursement.

The DOJ noted it has ongoing litigation against UnitedHealth Group, Elevance Health and Kaiser Permanente over their alleged use of upcoding.