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LEGAL NEWSLINE

Thursday, March 28, 2024

Health care fraud efforts ramped up under Obama

Medical malpractice 02

WASHINGTON (Legal Newsline) – A federal program that was implemented in 1997 and designed to target health care fraud took off under President Obama.

 According to its most recently filed annual report, the Health Care Fraud and Abuse Control Program has taken in more than $16.2 billion since fiscal year 2009, with the results of fiscal year 2016 still to be added.

 In the previous 12 years, the program recovered approximately $13 billion. The report also showed that for every dollar spent on health care fraud-related investigations, the government recovered $6.10.

 “Governmental programs that turn a profit for public funds are rare, and they tend to receive ongoing funding and support,” DLA Piper’s Karen Nelson recently wrote. She is a former deputy inspector general and chief counsel for the Texas Health and Human Services Commission’s Office of Inspector General.

 “It is reasonable to expect that the HCFAC agencies will continue to receive modest annual budget increases for the foreseeable future and that existing enforcement programs will perpetuate." 

In fiscal year 2015, Department of Justice opened 983 new criminal health care fraud investigations and filed charges in 463 cases against 888 defendants. In the same fiscal year, 613 defendants were convicted of health care fraud-related crimes.

“(T)he program’s continued success confirms the soundness of a collaborative approach to identify and prosecute the most egregious instances of health care fraud, to prevent future fraud and abuse, and to protect program beneficiaries,” the report says.

The initiative, undertaken by the DOJ and the Department of Health and Human Services, experienced a landmark in June 2016 with the announcement of charges against 301 individuals for the false billing of approximately $900 million.

It’s a solid bet that the trend of recovery will continue when 2016 statistics are released. The DOJ has announced it recovered $4.76 billion in False Claims Act cases in fiscal year 2016 – an increase of 25 percent over the previous year.

The FCA is used by the government and private whistleblowers to, in part, target health care providers who overbill Medicare and Medicaid for products and services.

Large companies and local doctors have been targeted by the program. The actions of Strike Force teams in nine areas have resulted in 2,185 indictments and nearly $2 billion in recoveries.

One of the highest-profile actions in 2016 involved Wyeth Inc. and its owner Pfizer. The two reached a $784.6 million settlement to resolve allegations Wyeth reported false pricing information and underpaid rebates due under a Medicaid program.

From 2001-06, Wyeth failed to report discounts it offered to hospitals for bundled sales of the drug Protonix, it was alleged, leading to false pricing information to CMS and underpaid rebates to states.

Pfizer’s press release said it was glad to put the matter behind it, but one target of a fraud investigation is fighting against certain measures taken by CMS.

Earlier this year, Arriva, a subsidiary of Alere, disclosed that it submitted Medicare claims on behalf of 211 deceased patients over a five-year period. CMS responded by revoking the company’s Medicare enrollment.

 It’s part of a recent string of events that has jeopardized Alere’s merger with Abbott Laboratories. Arriva has filed an appeal with a CMS administrative law judge in an effort to have its Medicare enrollment reinstated.

 The company also has asked the Washington, D.C., federal court, to put a stay on the revocation while the appeal of it is pending.

 In a December complaint, the company claims it was targeted by CMS in an effort to reduce a backlog at the agency.

“(T)he decision by CMS to bar Arriva from participating in Medicare is driven by a desire to reduce its longstanding backlog of administrative claim-reimbursement appeals,” Alere says.

“Arriva nots that the court recently ordered CMS to clear that backlog by 2020, and… CMS perceives Arriva to be a contributor to that backlog because Arriva has been forced to appeal approximately 25,000 errantly denied claims over the past five years.”

The company expects the CMS administrative law judge to issue a decision in the next few months.

In response to the lawsuit, the DHHS has asked the court to dismiss Arriva’s complaint.

“Plaintiff’s administrative appeal of the revocation is proceeding apace, so any claim of urgency related to the revocation is undermined considerably,” the DHHS wrote.

“Moreover, the applicable law provides that if Plaintiff is successful in getting a Medicare revocation overturned, Plaintiff will receive a complete restoration of billing privileges…”

Abbott is asking a Delaware court to nix its proposed merger with Alere, citing a recall of INRatio monitoring systems and the government’s investigation. 

Shareholders have sued Alere and named executives at the company for the subsequent stock drop.

“As Abbott well knows, none of the issues it has raised provides it with any grounds to avoid closing the merger,” a statement from Alere said.

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