Top Ten Healthcare False Claims Act Recoveries for 2023

This past year was another big year for DOJ enforcement under the False Claims Act, the government’s primary fraud-fighting tool.  And as we noted in our recent Top Ten listing of False Claims Act recoveries for 2023, all but 3 of the Top Ten recoveries were in the healthcare space involving various schemes to defraud Medicare and Medicaid.  So here is our look at the Top Ten healthcare recoveries for 2023.

Several of them (including 3 of the top 4) involved alleged violations of the Anti-Kickback Statute and Stark Law, which prohibit medical providers from paying or receiving kickbacks and from entering into certain kinds of financial relationships.  Also among the Top Ten was another DOJ enforcement favorite — fraud in the Medicare Advantage Program — where the government pays private health insurers to provide health insurance benefits to individual beneficiaries under a managed care model.  Rounding out the Top Ten were several other healthcare fraud schemes where the defendants billed Medicare/Medicaid for services not provided or not necessary or for failing to comply with the regulations.

Unsurprisingly, all but one of the Top Ten recoveries stemmed from actions filed by whistleblowers under the qui tam provisions of the False Claims Act which authorize whistleblowers to sue on behalf of the government those committing fraud against the government.  Over the past several decades, the government has recovered tens of billions of dollars under the False Claims Act, with the vast majority of those recoveries originated by whistleblowers.

This past year’s False Claims Act healthcare recoveries adds billions more to the government fisc.  Here is our listing of the Top Ten False Claims Act healthcare recoveries for 2023, which alone totaled more than $1.3 billion.  And once again, Constantine Cannon made the Top Ten listing with its representation of the whistleblower in the Cigna matter, taking the Number 3 spot below.

Set forth immediately below are the Top Ten False Claims Act healthcare recoveries for 2023:

1 — Precision Lens ($490M).  A federal court in Minnesota ordered Precision Lens and its owner Paul Ehlen to pay $487 million following a jury’s finding they violated the False Claims Act and Anti-Kickback Statute by paying kickbacks to ophthalmic surgeons to induce their use of the company’s products in cataract surgeries reimbursed by Medicare.  Roughly $131 million of that amount was for damages (trebled under the statute) with the remaining $359 million from statutory penalties.  The allegations originated in a whistleblower lawsuit filed by Kipp Fesenmaier, a former employee of Sightpath Medical, a company that sells cataract surgery and LASIK services, and was a previous defendant in the matter.

2 — Community Health Network ($345M).  The Indiana-based health network agreed to pay $345 million to settle charges it violated the False Claims Act and Stark Law by billing Medicare for certain services referred by physicians with whom the hospital system had a financial relationship.  The allegations originated in a whistleblower lawsuit filed by Community Health’s former Chief Financial and Chief Operating Officer Thomas Fischer.

3 — Cigna Group ($172M).  The Connecticut-based insurer agreed to pay roughly $172 million to settle charges it violated the False Claims Act by submitting inflated diagnosis codes for its Medicare Advantage Plan enrollees to increase its reimbursement payments from Medicare.  Some of the allegations originated in a whistleblower lawsuit filed by Robert Cutler, a former owner of a vendor retained by Cigna to conduct home visits.

4 — Covenant Healthcare ($69M).  The Michigan-based regional hospital system and two physicians agreed to pay roughly $69 million to settle charges they violated the False Claims Act, Anti-Kickback Statute, and Stark Law by billing Medicare and Medicaid for claims tainted by kickbacks and improper financial relationships with eight referring physicians and a physician-owned investment group.  The allegations originated with a whistleblower lawsuit filed by Dr. Stacy Goldsholl.

5 — CenCal Health ($68M).  The county organized health system that contracts for health care services under California’s Medicaid program and three health care providers agreed to pay $68 million to settle charges they violated the False Claims Act by improperly billing California’s Medicaid program (Medi-Cal) under the Patient Protection and Affordable Care Act’s Medicaid Adult Expansion program.  The allegations originated in a whistleblower lawsuit filed by CenCal’s former medical director Julio Bordas

6 — Nostrum Laboratories ($50M).  Nostrum and its founder and CEO, Nirmal Mulye, agreed to pay up to $50 million to settle charges they violated the False Claims Act by underpaying Medicaid rebates due for Nostrum’s drug Nitrofurantoin Oral Suspension (Nitro OS).  The Medicaid Drug Rebate Program requires manufacturers to pay inflation-based rebates for drugs, and is designed to insulate the Medicaid program from drug price increases that outpace inflation.

7 — Individual Vascular Surgeon ($43.4M).  Michigan vascular surgeon Vasso Godiali agreed to pay up to $43.4 million to settle charges he violated the False Claims Act by billing Medicare and Medicaid for vascular procedures he did not perform and falsifying patient records to support the fraudulent billings.  He also was sentenced to 80 months in prison and ordered to pay $19.5 million in restitution.  The allegations originated in a whistleblower lawsuit filed by Innovative Solutions Consulting.

8 — Genomic Health ($32.5M).  The California-based wholly-owned subsidiary of Exact Sciences Corporation agreed to pay $32.5 million to settle charges it violated the False Claims Act by engaging in a nationwide scheme to improperly bill Medicare for certain laboratory tests used to diagnose and treat cancer patients.  The allegations originated in a whistleblower lawsuit.

9 — Detroit Medical ($30M).  Detroit Medical Center, Vanguard Health Systems, and Tenet Healthcare Corporation agreed to pay roughly $30 million to settle charges they violated the False Claims Act by providing kickbacks to certain referring physicians.  The allegations originated in a whistleblower lawsuit filed by Dr. Jay Meythaler, a former employee of Wayne State University Medical School, which is affiliated with Detroit Medical.

10 — Martin’s Point ($22M).  Portland-based Martin’s Point Health Care agreed to pay roughly $22 million to settle charges it violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to increase reimbursements from Medicare.  The allegations originated in a whistleblower lawsuit filed by Alicia Wilbur, a former manager in Martin’s Point’s Risk Adjustment Operations group.

If you have information relating to potential healthcare fraud and would like to speak to an experienced member of the Constantine Cannon whistleblower lawyer team, please don’t hesitate to contact us for a free and confidential consultation.  The government is waiting to hear from you.

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