After a record-breaking 2023, settlements under the False Claims Act continue along the same trajectory in the first half of 2024, “with notable healthcare fraud settlements under the FCA, AKS [the Anti-Kickback Statute], and Controlled Substances Act, among others,” according to attorneys from K&L Gates, writing in the National Law Review.
This follows fiscal year 2023, which, despite increases in FCA settlements in other industries, saw the lowest number of healthcare-related FCA actions filed since FY 1995, “continuing an apparent downward trend in overall healthcare-related FCA actions,” according to the lawyers.
The act imposes damages and penalties on those who knowingly and falsely claim money from the United States or knowingly fail to pay money owed to the United States. In the case of healthcare, recoveries restore funds to federal programs such as Medicare and Medicaid.
As the McKnight’s Business Daily previously reported, in FY23, cases involved false claims in the Medicare Advantage program, providers that have played a role in contributing to and exacerbating issues related to opioids, unlawful kickbacks paid or received by healthcare providers, and providers billing for unnecessary services and substandard care.
Several settlements so far in 2024 involved claims made under Paycheck Protection Program, “demonstrating that COVID-era fraud targeting efforts are far from over,” K&L Gates noted.
For instance, in one case, a California man has been indicted for filing two fraudulent PPP applications on behalf of a now-bankrupt medical transportation company. And a Hyannis, MA-based hospital agreed in May to pay $24.3 million to resolve FCA allegations that it knowingly submitted claims to Medicare for procedures that didn’t comply with Medicare rules. And earlier this month, the Justice Department sentenced a pharmacy owner to two years in prison for submitting more than $1 million in false and fraudulent claims to Medicare for prescription drugs that were never dispensed to beneficiaries.
The attorneys at K&L Gates said they are monitoring the effects of the Supreme Court’s decision in United States ex rel. Schutte v. SuperValu, Inc. In that case, the whistleblower plaintiffs argued that the company violated the FCA by overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program for prescription drugs,” SCOTUSblog reported last June.
The case fell under the FCA whistleblower provision — the oldest whistleblower regulation on the books, dating back to the Civil War — which rewards whistleblowers who confidentially disclose fraud that results in a financial loss to the federal government.Additionally, the K&L Gates attorneys said they are monitoring “the growing circuit split regarding causation in kickback-premised FCA cases” and potential fraud arising from AI use in healthcare.
