Government, Health Care, and Law

Feds step up fight against health care fraud

February 18, 2015
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Wondering about the waste of your federal tax dollars?

The U.S. Department of Justice has been stepping up its game in trying to get some of your hard-earned money back in the form of prosecuting fraud cases under the federal False Claims Act.

Last year was a record year for the DOJ in terms of fraud recovery — nearly $5.7 billion was recovered, with approximately $2.3 billion of that related to Medicare and Medicaid fraud. This marks the fifth consecutive year the department has been able to recover at least $2 billion in health care fraud. In the last five years, the DOJ says the False Claims Act has generated $14.5 billion in funds that have been returned to taxpayers.

And yet, the feds tell us, the amount of funds we recover are just a drop in the bucket compared to the amount of funding we spend on health care nationally each and every year — about one-tenth of one percent. But it’s still important that we make every effort to account for each dime health care providers and pharmaceutical companies bilk from taxpayers.

While the DOJ has agents out in the field investigating cases of health care fraud, the single most important weapon we have to fight fraud is the False Claims Act. A good example of the use of the act is in connection with several cases that have been settled in the past year where pharmaceutical companies billed Medicaid for the use of anti-psychotic drugs such as Risperdal for nursing home patients. The process, known as “off-label billing,” involves companies selling medications for uses other than what they were originally intended for.

Risperdal’s intended prescription is for people with severe mental illnesses. Instead, the company sold the drug to nursing home physicians, saying they could be used on patients there, and then would proceed to bill Medicaid or Medicare. This is in violation of federal law, which says companies can only be reimbursed for the labeled use of the drug.

Thanks to the False Claims Act, Johnson & Johnson and two subsidiary firms paid out $1.1 billion to the federal government to settle fraud suits involving the alleged unapproved marketing of Risperdal and two other medications. In addition, J&J also forked over more than $600 million to the states for improper claims to state Medicaid programs. As a result of the settlement, the pharmaceutical companies have changed their practices with regard to off-label billing. We may still see companies try to market their drugs for uses beyond what’s been approved, but perhaps in another form.

In the meantime, it is important that taxpayers be protected from illegal billing of federal and state health care programs, using the False Claims Act as their weapon of choice.

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