2024 was a record-breaking year for whistleblower cases filed under the False Claims Act (FCA). There were 979 whistleblower filings allowing the Department of Justice (DOJ) to recover $2.4 billion. DOJ False Claims Act settlements in 2024 pulled in a total of $2.9 billion, $1.67 billion of which was attributed to healthcare. We’ll dig deeper into the healthcare settlements, including what allegations the organizations faced and how much these FCA violations cost them.
What is the False Claims Act?
The federal False Claims Act prohibits someone from knowingly presenting or causing a false claim for payment if the federal government will pay for that claim. A classic example is Medicare fraud. Providers who bill Medicare for services they did not actually provide and who present the bill with the knowledge that the service was not performed have committed Medicare fraud. In this case, the provider may be liable for fines, penalties, and even jail time under the False Claims Act.
“The Department places a high priority on fighting fraud and abuse in federal programs,” said Principal Deputy Assistant Attorney General Boynton, head of the Justice Department’s Civil Division. “…such conduct will not be tolerated, and those who knowingly misuse taxpayer funds will be held accountable.”
Healthcare DOJ False Claims Act Settlement Agreements in 2024
Healthcare DOJ False Claim Act settlements raked in the lion’s share of recoveries in 2024. These settlements involved managed care providers, physicians, hospitals, pharmacies, pharmaceutical companies, laboratories, and other medical facilities. While the $1.67 billion in recuperated funds account for federal losses, many cases also involved Medicaid losses at the state level, in which the federal government was instrumental in aiding recovery efforts.
While the False Claims Act settlement agreements in 2024 were for a variety of reasons, many fell into four main categories of fraud:
- Opioid Epidemic
- Unnecessary Services and Substandard Care
- Medicare Advantage Matters
- Unlawful Kickbacks and Stark Law Violations
1. Opioid Epidemic
The Opioid epidemic has claimed many lives and ruined countless others. It’s shocking to think that pharmacies and pharmaceutical companies would exploit addiction for financial gain, but a handful of them agreed to settlements for unlawful prescriptions and kickbacks.
Endo Health Solutions: $475.6M
Allegations that it aggressively marketed an opioid to high-volume prescribers.
Rite Aid Corporation: $401.8M
Allegations it knowingly improperly dispensed prescriptions for controlled substances.
Dr. Gregory Gerber: $4.7M
Allegations that he issued prescriptions without a medical need for opioids and other controlled substances.
Crossroads: $863,934
Allegations that the substance use disorder treatment clinics billed for treatment services they did not provide, defrauding Medicaid.
2. Unnecessary Services and Substandard Care
As a way to increase reimbursements from federal programs, some healthcare facilities will bill for services that were not necessary, or for services that they do not have the skills to provide. A few healthcare organizations’ False Claims Act settlements fell into this category in 2024.
Daniel Hurt: $27M
Allegations that his companies procured cancer genomic tests through illegal kickbacks and received Medicare payments for tests done that were not medically necessary.
Strauss Ventures LLC, d/b/a The Grand Health Care System: $21.3M
Allegations that they knowingly billed for therapy services that were unskilled, unnecessary, and unreasonable.
Acadia Healthcare Company: $16.6M
Allegations of billing for unnecessary services, improper discharges, and staffing shortcomings.
3. Medicare Advantage Matters
Medicare Part C is the largest part of Medicare. The DOJ has focused much of its anti-fraud efforts on pursuing these cases, litigating several of them in 2024.
Oak Street Health: $60M
Allegations of kickback payments to third-party insurance agents in exchange for recruiting seniors to its clinics.
The DOJ is also actively litigating other cases under this category with UnitedHealth Group, Elevance Health (formerly Anthem), and Kaiser Permanente.
4. Unlawful Kickbacks and Stark Law Violations
The Stark Law is a federal statute designed to combat healthcare fraud and abuse. Under the Stark law, physicians may not refer patients for certain treatments covered by Medicare (if the referral is to an entity in which the physician has a financial interest). In other words, a physician may not engage in the practice of “self-referral.” In 2024, the DOJ settled several cases of alleged Stark Law violations and unlawful kickbacks.
Community Health Network: $345M
Allegations of claims submitted to Medicare for services referred in violation of the Stark Law.
Prema Thekkek: $45.6M
Allegations of kickbacks paid to physicians in the form of medical directorships to encourage patient referrals.
DaVita: $34.5M
Allegations of kickbacks paid to a competitor to induce referrals.
Innovasis: $12M
Allegations of kickbacks paid to spine surgeons in the form of performance shares in Innovasis, extravagant dinners and holiday parties, intellectual property acquisition and licensing fees, consulting fees, registry payments, and travel to a luxury ski resort to encourage the use of the company’s spinal implants, devices, and other equipment.
RDx Bioscience Inc.: $10.3M
Allegations of kickbacks paid in the form of commissions to independent contract marketers for the recommendation of RDx laboratory tests, and management services organization payments to physicians disguised as investment returns.
Preventing Fraud, Waste, and Abuse
Organizations and providers must take steps to combat fraud, waste, and abuse and report it when it happens. Effective staff training and incident reporting tools are essential to meeting the standards set forth by the False Claims Act. Compliancy Group supports healthcare organizations through robust regulatory compliance training and incident reporting tools. Find out how we can help you combat FWA in your organization!
