Government Recovers $4 Billion from Health Care Fraud Cases

HHS, Justice Recover $4 Billion from Health Care Fraud Cases The government recovered a staggering $4 billion in fiscal 2010 that was stolen from federal health care programs, the U.S. departments of Justice and Health and Human Services announced Monday -- the highest annual amount ever.

Yet another record was set as more than $2.5 billion came from recoveries obtained in civil health care matters brought under the False Claims Act, according to a new report from the Health Care Fraud and Abuse Control Program. Also, federal prosecutors opened 1,116 criminal health care fraud investigations in fiscal 2010, and a total of 726 defendants were convicted.

HHS Secretary Kathleen Sebelius (pictured) and Associate Attorney General Thomas Perrelli attributed much of the success to the Health Care Fraud Prevention & Enforcement Action Team (HEAT), which was created in 2009. HEAT filed 140 charges against 284 defendants who billed Medicare more than $590 million. Of those, 146 defendants were sentenced to an average of more than three years of jail time.

Sebelius added that the focus is shifting to preemptive measures. "[F]or too long, our fraud prevention efforts have focused on chasing after taxpayer dollars after they have already been paid out," she said. "Thanks to the President's leadership and the new tools provided by the Affordable Care Act, we can focus on stopping fraud before it happens."

Indeed, the Affordable Care Act authorizes new rules to help prevent health care fraud, including rigorous screening and new enrollment processes. The final rule will also allow agencies to stop enrollment and suspend payments when a fraud allegation is being investigated.

Drug Companies Were Major Offenders


The report also boasts a return on investment of $6.8 for every dollar spent in the last three years -- an ROI to which many drug companies contributed. "In recent years, pharmaceutical fraud cases have constituted a significant part of the Civil Division's efforts," the report notes. These cases are usually nationwide in scope, quite complex and require significant resources. But the payouts are worth it as they "involve schemes that cost federal payers billions of dollars and affect public health."

For example, just three cases against Allergan (AGN), Novartis (NVS), and AstraZeneca (AZN) in 2010 resulted in civil recoveries of $225 million, $237.5 million, and $520 million, respectively. (There were also criminal components to the Allergan and Novartis settlements, of $375 million and $185 million, bringing the total penalties paid to $600 million and $422.5 million, respectively.) In all, more than half of the health care fraud money recovered came from drug companies.

Usually, cases involving pharmaceuticals relate to off-label marketing -- promoting a drug for unapproved uses -- but those are by no means all the cases. Pharmaceutical companies weer also fined for paying kickbacks to physicians, as well as various types of pricing schemes designed to cause federal programs to overpay for drugs.

The findings in Monday's report are not surprising, as it comes on the heels of a recent study that found that pharmaceutical companies have become the biggest defrauders of the federal government, surpassing the defense industry.

While the HHS and DOJ may give themselves a pat on the back for the billions they have brought in, some say their efforts are not enough. The size of the penalties pales in comparison to pharmaceutical industry profits. Some activists and watchdogs are calling not only for much steeper financial penalties, but for criminal prosecutions of company leadership, with the possibility of jail sentences, if warranted.


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educationerequ

Nicely written. I love succinct posts that actually impart usable information.
http://www.educationrequirements.org/jobs/health-care-education-requirements

July 01 2011 at 2:27 AM Report abuse rate up rate down Reply
helendow27

I think that health care reform is a great idea. I have type 1 diabetes and for me to get insurance, it was a nightmare until I found "Wise Health Insurance" search for them online and you can get affordable health insurance instantly.

January 27 2011 at 4:21 AM Report abuse rate up rate down Reply
jdima58295

It really doesn’t matter what they recover… We as the tax payers will never see a red cent of it. Our government spends all of our tax dollars as they see fit & really don’t care what we think. Imagine a business that runs short of money and has the ability to hold up the tax payer at gun point.

January 26 2011 at 12:06 PM Report abuse +1 rate up rate down Reply
Janeyre

They need to give more attention to punishment. Why so little time for fraud?

January 26 2011 at 1:31 AM Report abuse +1 rate up rate down Reply
unichems

I appreciate the HHS and DOJ doing their Job. But more should be done. What about if the company is caught in fruad that their product is no longer allowed to be used in government funded programs. The penalty must be severe! Slaps on the wrist do not discourage Fraud. Money is to big. We have the ability to stop this.

January 25 2011 at 4:04 PM Report abuse +2 rate up rate down Reply
STEVE

These big drug corps. know there braking the law when they began whatever program
they got caught up in.

January 25 2011 at 2:23 PM Report abuse rate up rate down Reply
Larry

The penalties should be more than just a fine. These companies will just consider these fines a cost of doing business and pass it along to the consumers. If one of their employees stole a few thousand from them, they would prosecute and have the employee arrested. These companies steal hundreds of millions and all they get is a slap on the wrist. Those responsible should do serious jail time so these companies will think twice before they steal from the taxpayers!!

January 25 2011 at 1:41 PM Report abuse +6 rate up rate down Reply
lam2ray

Very good, I'm glad that the government is at least doing something about fraud in the medical industry.

January 25 2011 at 1:04 PM Report abuse +4 rate up rate down Reply
1 reply to lam2ray's comment
ocrbmom

Wonder how much they got back from Rick Scott.

January 25 2011 at 1:08 PM Report abuse -2 rate up rate down Reply
jOSEPHINE

4 billion in fraud from a gov run program.. need we say more.. no gov takeover.. For God's sake stop the insantiy

January 25 2011 at 12:37 PM Report abuse -2 rate up rate down Reply
1 reply to jOSEPHINE's comment
chris1011

Your vitriol is aimed the wrong way, as usual. It should be aimed at private industry which perpetrates this fraud. It is not the government that does it.

January 25 2011 at 12:57 PM Report abuse +6 rate up rate down Reply
jkennedy806

When do you go after the banksters and recover US taxpayers billions???

January 25 2011 at 12:31 PM Report abuse +4 rate up rate down Reply
2 replies to jkennedy806's comment
lstnvlly

Let's make that Trillions.

January 25 2011 at 11:51 PM Report abuse +1 rate up rate down Reply
jdima58295

It really doesn’t matter what they recover… We as the tax payers will never see a red cent of it. Our government spends all of our tax dollars as they see fit & really don’t care what we think. Imagine a business that runs short of money and has the ability to hold up the tax payers at gun point.
WOW... WAKE UP PEOPLE.

January 26 2011 at 11:40 AM Report abuse rate up rate down Reply