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Fiscal 2006 was a record year for fraud and false claims recovery, DOJ reports

Pharma Compliance Alert, November 29, 2006

The United States government recovered over $3.1 billion in fraud settlements and judgments in 2006, the most ever for a single fiscal year, including about $2.2 billion for health care fraud, the Department of Justice announced November 21.

The previous record year was 2003, when the government recovered $2.2 billion from fraud. Compared to fiscal year 2005, healthcare-related recoveries were up about a billion dollars and non-healthcare recoveries were up about a half-billion dollars.

About half of the 2006 total came from two settlements, the $920 million settlement with Tenet Healthcare Corporation, America's second largest hospital chain, and a $565 million recovery from the Boeing Company, the second largest defense contractor.

Most of Tenet's settlement with the government, announced in June, related to charges that the company was receiving excessive "outlier" payments from Medicare. The settlement also resolved claims that Tenet paid kickbacks to physicians to get Medicare patients referred to its facilities and claims that that Tenet engaged in improper coding of certain procedures in order to receive higher reimbursement.

About $1.8 billion of the government's fraud recovery in 2006 resulted from government-initiated cases. The remaining $1.3 came from whistleblower cases. Under the qui tam provisions of the Federal False Claims Act, whistleblowers can receive 15-25% of the government's recovery from a case they initiated. Whistleblowers received a total of $190 million in 2006.

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