Settlements, Judgments and New Filings Highlight Unprecedented Scrutiny of Healthcare Industry
Nashville, Tenn. (March 11, 2015) – With another busy year for new fraud case filings and the government's continued success at winning damages, healthcare organizations should be prepared for even more rigorous scrutiny in 2015, according to the Healthcare Fraud and Abuse Review released today by Bass, Berry & Sims PLC.
The review is one of the most comprehensive annual guides on healthcare fraud developments. The review includes a full list of all FCA settlements from the past year, organized by industry and sector, as well as updates on Stark Law and Anti-Kickback Statute litigation.
The review notes nearly $5.7 billion in recoveries by the federal government for fiscal year 2014 – a $1.9 billion jump from the previous year. Of that $5.7 billion, $2.3 billion is related to false claims against the federal healthcare programs. In addition, the Department of Health and Human Services' Office of Inspector General reported expected recoveries of more than $4.9 billion in fiscal year 2014.
"As the entire healthcare industry is going through a period of unprecedented change, we are witnessing intense scrutiny of healthcare organizations as it relates to alleged fraud in federal healthcare programs," said Brian D. Roark, head of the firm's Healthcare Fraud Task Force, which authors the annual report. "This marks the fifth consecutive year in which healthcare-related recoveries exceeded $2 billion – and that doesn't include state recoveries for Medicaid fraud. We don't expect this enforcement trend to slow down any time soon. In fact, all signs point to increased enforcement in the year to come."
Qui tam lawsuits are also being filed by whistleblowers at a rapid pace, according to figures compiled in the report. For the second year, qui tam whistleblowers filed more than 700 new lawsuits. For their share of judgments and settlements, whistleblowers received more than $435 million – a nearly $100 million increase from the previous year.
"We're seeing an increase not only in whistleblower activity, but in the kinds of whistleblowers out there," said Anna M. Grizzle, Task Force member. "Typically, we expect whistleblowers to be current or former employees of an organization, but multiple suits last year were actually brought by competitors. It should serve as a reminder to providers that scrutiny is high – and coming from all sides."
Judgments and settlements against hospitals alone totaled more than $300 million. Examples include cases where hospitals allegedly billed for inpatient services that should have been outpatient, or where they allegedly billed for a medically unreasonable or unnecessary procedures, in particular coronary procedures.
Other sectors highlighted in the report include physician practices, health plans, long-term care and pharmaceuticals and medical device companies.
A trend that emerged in 2014, the report says, is increasing liability of physicians in arrangements that violate the Stark Law or Anti-Kickback Statute. Traditionally, in those cases, enforcement authorities have focused on hospitals, labs and other entities, while physicians often escaped enforcement action. Last year, however, marked a shift in this trend, as authorities pursued physicians as "phase two" of an investigation.
"Across the board, the government and whistleblowers continue to push the bounds of liability under healthcare fraud and abuse statutes like the FCA, Stark and Anti-Kickback," said Task Force Member Matthew M. Curley. "The bottom line is, now more than ever, healthcare providers must be paying close attention to legal developments in the fraud and abuse arena."
Download the 2014 Healthcare Fraud and Abuse Review.
About Bass, Berry & Sims Healthcare Fraud Task Force
The Bass, Berry & Sims Healthcare Fraud Task Force represents healthcare providers in connection with fraud and abuse matters, including responding to governmental inquiries by the U.S. Department of Justice, U.S. Attorneys' Offices, the Office of Inspector General of the U.S. Department of Health and Human Services, federal program safeguard contractors, and various states' Attorneys General offices. Read more about the task force here.
About Bass, Berry & Sims PLC
With more than 220 attorneys representing numerous publicly traded companies and Fortune 500 businesses, Bass, Berry & Sims PLC has distinguished itself for service to national healthcare clients, including hospitals, pharmaceutical companies and outpatient service providers. Ranked as one of the largest healthcare law firms in the U.S., Bass, Berry & Sims provides unsurpassed depth in mergers and acquisitions, investigations, compliance, regulatory and operational matters. For more information, visit www.bassberry.com.