Federal fraud recoveries under the False Claims Act remained static at about $3 billion—much of it for healthcare fraud—for the fiscal year that ended Sept. 30, Justice Department officials announced.
Fraud recoveries steady at about $3 billion
Although the overall amount of $3 billion in civil settlements and judgments was about the same as the previous year, Tony West, assistant attorney general for the civil division, said the number of cases has increased. For example, the vast majority of the funds were recovered under whistle-blower cases and those increased to 638, from fewer than 400 in much of the previous decade. Additionally about $400 million was recovered by states as part of these cases.
About $2.4 billion of the federal total were recoveries for fraud committed against federal healthcare programs, including cases brought against drugmakers, device manufacturers, home health agencies and providers.
Separately, the criminal division used the same legal authority to convict 21 people and to obtain $1.3 billion in fines, forfeitures, restitution and disgorgement, according to the Justice Department.
The dominant share of healthcare-related civil recoveries stemmed, in part, from the first-time collaboration President Barack Obama ordered between Attorney General Eric Holder and HHS Secretary Kathleen Sebelius, West said during a media briefing.
Despite federal officials touting the recoveries, they acknowledged such recoveries are the result of the so-called pay-and-chase model, which the federal government is moving away from in favor of systems that seek to prevent fraudulent payments. Such initiatives include new authorities granted by the Patient Protection and Affordable Care to allow federal healthcare programs to suspend payments if “credible” fraud allegations are received.
“At the end of the day, you can’t enforce your way out of this problem,” West said.
That challenge is reflected by the small share that the recent recoveries represent of overall federal healthcare fraud. Fraud consumed 3% to 10%, according to the FBI, of the $882 billion the federal government was estimated to have spent on healthcare in fiscal 2011.
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