February 04, 2022 Category: News
By Attorney: Patricia Stamler
Shareholder & Department Head-False Claims Act Litigation
The Department of Justice’s (“DOJ”) Acting Assistant Attorney General Boynton recently announced that the total False Claims Act (“FCA”) settlements and judgments recovered in FY 2021 exceeded $5.6 billion and noted that “[t]he False Claims Act is one of the most important tools available to the department both to deter and to hold accountable those who seek to misuse public funds.” Justice Department’s False Claims Act Settlements and Judgments Exceed $5.6 Billion in Fiscal Year 2021, The United States Department of Justice (Feb. 1, 2022) https://www.justice.gov/opa/pr/justice-department-s-false-claims-act-settlements-and-judgments-exceed-56-billion-fiscal-year. The global FY 2021 recovery is the second largest total recovery since 2014. Id.
I am pleased to have successfully represented a whistleblower yielding an $8.5 million contribution to the 2021 aggregate monies returned to the taxpayers in United States ex rel. Irfan Mahmood v. U.S. Medical Management, LLC, et al. More information about this case is available in the DOJ’s press release, which is available at: https://www.justice.gov/usao-edmi/pr/usmm-and-vpa-pay-85-million-resolve-overpayment-medicare-claims-laboratory-and. Please contact me to discuss possible FCA claims at firstname.lastname@example.org or (248) 335-5000.
Over $5 billion of the $5.6 billion recovered arose out of allegations of health care fraud involving durable medical equipment and drug manufacturers, physicians, hospitals, laboratories, hospice providers, and managed care providers and constituted recoveries arising from only losses to the federal government and excluded additional monies recovered for state Medicaid programs.
The FCA provides significant financial incentives for whistleblowers (known as relators) to file lawsuits alleging false claims on behalf of the government. The whistleblower typically receives between 15% to 30% of the recovery. In 2021 whistleblowers filed 598 qui tam suits. Id. A key area of the government’s recent focus has been tackling the opioid crisis. In this regard the government resolved several FCA cases with various manufacturers of prescription opioids such as Purdue Pharma, Indivior, Inc., and Indivior PLC.
In addition, the government pursued claims tied to the Medicare Part C-Medicare Advantage program which pays a capitated amount to private health insurance carriers for each enrolled patient. “In 2021, more than 26 million Medicare beneficiaries were enrolled in Part C plans, and the Congressional Budget Office projected that CMS would pay more than $343 billion to private carriers who offered those plans.” Id. Under Part C CMS adjusts the payments based on various ‘risk’ factors (risk adjustment) that affect expected healthcare expenditures to ensure that plans are paid more for enrollees who pose a greater risk. The DOJ pursued claims against providers and plans who “manipulated the risk adjustment process by submitting unsupported diagnosis codes to make their patients appear sicker than they actually were.” Id.
The announcement also highlights other areas of health care fraud including illegal kickbacks and billing for unnecessary medical services.
The announcement also highlighted FCA claims tied to COVID-19 funds. In the wake of the COVID-19 pandemic, “Congress authorized historic levels of emergency funding for federal agencies to provide direct financial assistance to individuals, businesses and state, local, and Tribal governments.” Id. The DOJ’s claims included fraud schemes under the Paycheck Protection Program for defendants obtaining improper loans or improper use of loan funds.