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Department of Health and Human Services Announces Record-Breaking $4.1 Billion in Healthcare Fraud Recoveries in 2011

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Last week, the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced that the federal agencies succeeded in recovering $4.1 billion in fraudulent healthcare payments in 2011.  This figure – detailed in the annual Health Care Fraud and Abuse Control Program (HCFAC) report – is a record high, with recovered funds having increased nearly 50% since 2009.

According to the report, between 2009 and 2011 the federal government collected $7.20 for every $1.00 spent on fighting fraud. This is an increase from the period between 1997 and 2008 in which the government recovered $5.10 for every dollar spent on countering fraud.

Officials attributed the rise in recoveries to increased efforts to screen healthcare providers by conducting site visits to ensure that healthcare providers deemed to be moderate fraud risks have a legitimate office before these providers can be enrolled to participate in Medicare and Medicaid. Additionally, those providers considered to be higher risks are now subject to criminal background checks.

According to the report, approximately $2.4 billion of the recovered funds were recovered by cases brought under the False Claims Act (FCA).  The FCA allows individual citizens to bring charges in the name of the U.S. government against parties who fraudulently receive government funds. The qui tam provision of the FCA allows individuals who bring such lawsuits to receive 15 to 30% of the total amount funds recovered.

Among the common types of fraudulent health care claims, the HCFAC report details:

“unlawful pricing by pharmaceutical manufacturers, illegal marketing of medical devices and pharmaceutical products for uses not approved by the FDA, Medicare fraud by hospitals and other institutional providers, and violations of laws against self-referrals and kickbacks.”

The nearly $2.4 billion recovered under the FCA in 2011 marks the second consecutive year in which the government has recovered more than $2 billion in FCA claims. Since the beginning of 2009, HHS has recovered in excess of $6.6 billion in federal health care spending under the FCA. It is estimated that there is $60 billion to $90 billion in Medicare fraud every year.

According to Attorney General Eric Holder, such fraudulent practices “harm all of us – government agencies and programs, insurers and health care providers, and individual patients.”

The Employment Law Group® law firm focuses in the areas of employment law and whistleblower protection law, has helped many clients file suit against employers that fraudulently billed the U.S. government, and has established favorable precedents under the retaliation provision of the False Claims Act.

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