The Department of Justice announced in a February 1, 2022 press release (Press Release) that it obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims in the fiscal year ending September 30, 2021 (FY2021) – the second largest annual total recovery in False Claims Act (FCA) history.
Health Care Fraud Dominated the Recovery Landscape
Of the $5.6 billion, $5 billion relates to matters involving the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories and physicians. Recoveries gained from DOJ’s health care fraud enforcement efforts restore funds to federal programs such as traditional Medicare, Medicaid and TRICARE, but DOJ devoted significant efforts to recovering funds defrauded from the Medicare Advantage program (Part C) as well. Medicare Advantage pays a capitated amount to private health insurers based on patients enrolled in the insurers’ plans and adjusted for various “risk” factors. DOJ has investigated insurers and healthcare providers that allegedly manipulated the risk adjustment process by submitting claims for reimbursement to federal health care programs that included unsupported diagnosis codes, which made patients appear sicker than they actually were. In FY2021, DOJ entered into settlements with Sutter Health and Kaiser Foundation Health that together provided for the payment of over $96 million to...
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