In a show of force, the Department of Justice just announced two fines against providers for healthcare fraud under the False Claims Act totaling more than $10 million. The news coincided with release of an annual report on healthcare fraud, which claims that the feds recovered $3.3 billion in fiscal year 2014.
The annual report touts federal action against medical device companies. Some of the examples include:
- A fine of $40.1 million against CareFusion ($CFN) for promoting off-label use of its ChloraPrep skin preparation.
- A fine of $30 million against Boston Scientific's ($BSX) Guidant for knowingly selling defective cardiology device from 2002 to 2005, some of which were used by Medicare patients.
- A fine of $9.98 million against Medtronic ($MDT) for paying kickbacks to doctors in exchange for promotion of its pacemakers and defibrillators.
- And a fine of $5.5 million against Abbott Laboratories ($ABT) for encouraging providers to submit false claims to Medicare for surgeries involving its carotid, peripheral vascular and biliary stents.
Individuals are being scrutinized too. During the fiscal year, 8 people were convicted for defrauding the government in schemes involving wheelchairs, according to the annual report.
Since the inception of the Health Care Fraud and Abuse Control Program in 1996, more than $27 billion has been returned to the Medicare Trust Fund, according to the annual report. The DOJ touted the program's increased effectiveness, saying its return on investment has risen over the last three years to $7.70 for every dollar spent on the program; that's about $2 more than the program's average.
One strategy being deploying by the feds involves the use of whistleblowers. They collected $369 million under the whistleblower provision of the False Claims Act in FY 2014, the annual report says.
In addition, as required by the Affordable Care Act, the federal Centers for Medicare & Medicaid Services are revalidating all Medicare suppliers and providers, DOJ said in a release. The agency has stopped billing nearly 500,000 providers so far. It is applying advanced analytic techniques to screen all Medicare fee-for-service claims for fraud.
"New enrollment screening techniques and computer analytics are preventing fraud before money ever goes out the door. And together with the continued support of Congress and our partners at the Department of Justice, we've cracked down on tens of thousands healthcare providers suspected of Medicare fraud--all of which are helping to extend the life of the Medicare Trust Fund," said Department of Health Human Services secretary Sylvia Burwell in the release.
Although the program was hit by the sequestration spending cuts to the tune of $31.5 million, the DOJ says increased funding allowed it to expand the Medicare Strike Force into nine cities and regions.
To demonstrate its continued commitment to cracking down on fraud, the DOJ concurrently announced fines worth $10 million-plus against two providers of healthcare that is enabled by medical devices.
Heart monitoring company BioTelemetry of Malvern, PA, was hit with a $6.4 million fine under the False Claims Act for overbilling Medicare for unnecessary outpatient services made by its Cardio Net subsidiary, the DOJ said in a release. The violative monitoring involved the use of continuous monitoring of the heart, instead of less expensive monitors that transmit their data periodically. The DOJ said the company provided inaccurate diagnostic codes to justify use of the more expensive monitors.
Non-profit hospital operator Adventist agreed to pay $5.4 billion to resolve claims that it violated the False Claims Act by providing radiation oncology services without supervision by qualified practitioners to patients on Medicare and TRICARE, the federal insurance program for uniformed service members. Radiation oncologist and whistleblower Dr. Michael Montejo, former employee of Florida Oncology Network P.A., will receive almost $1.1 million for suing on behalf of the government, the DOJ said.
And the following day, March 20, the DOJ announced that Californian Sylvia Walter-Eze, former owner of Ezcor Medical Supply, was convicted of healthcare fraud in federal court. She awaits sentencing for paying doctors kickbacks for fraudulent prescriptions of power wheelchairs, and receiving nearly $2 million in reimbursement for those claims. -- Varun Saxena (email | Twitter)