Feds amassed $2.6 billion from 2019 healthcare fraud cases

The U.S. Justice Department recovered more than $2.6 billion in 2019 from lawsuits involving healthcare fraud and false claims, federal data released Thursday show.

The department's recoveries from healthcare fraud cases have inched higher in recent years from roughly $2.5 billion in 2018 and $2.1 billion in 2017. The fiscal year ending Sept. 30 was the 10th straight year that settlements and judgments from healthcare companies for alleged fraud exceeded $2 billion, the Justice Department said.

"The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens' tax dollars are well spent," Assistant Attorney General Jody Hunt said in a statement.

The cases involved drug and medical device manufacturers, insurers, hospitals, pharmacies, hospice organizations, laboratories and doctors. While the $2.6 billion in recoveries reflects federal losses, the Justice Department said it recovered additional millions of dollars for state Medicaid programs.

Whistleblowers brought most of the 505 cases involving healthcare companies. Their share of the legal awards amounted to $244.2 million in 2019, down from $306.1 million the year before.

The Justice Department said two of its largest recoveries during the year came from opioid manufacturers. Insys Therapeutics paid $195 million to settle allegations it paid kickbacks to clinicians to prescribe an addictive painkiller called Subsys.

Reckitt Benckiser paid $500 million to the federal government to resolve civil claims that it promoted the addiction treatment drug and opioid Suboxone for unsafe uses. The company paid $1.4 billion total to resolve civil and criminal allegations.

Meanwhile, seven drugmakers paid a combined $624 million to resolve claims that they illegally paid Medicare patients' copays for their own drugs through foundations that they used as conduits. That practice facilitates drug price hikes, the Justice Department said. Other settlements involved cases in which healthcare companies misrepresented their products or paid kickbacks to referring physicians.

Across all False Claims Act cases — beyond those related to healthcare — the Justice Department said it recovered $3.1 billion, up from $2.9 billion in 2018. Recoveries since 1986, when Congress strengthened the civil False Claims Act by increasing incentives for whistleblowers to report fraud, have reached $62 billion.