On January 9, 2020, the U.S. Department of Justice (DOJ) announced their recovery of more than $3 billion in settlements and judgments from civil cases involving fraud and false claims for fiscal year (FY) 2019.¹ Approximately $2.6 billion was recouped from the healthcare industry for federal losses alone, and included recoveries from drug and medical device companies, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.² This figure is slightly higher than healthcare-related recoveries during FY 2018, which totaled over $2.5 billion.³ Settlements received from the healthcare industry (over 85% of the total recovery amount) far outstripped the $252.2 million recovered from defense contractor companies and the $196.8 million obtained from other industries such as banking.⁴ In addition to the $2.6 billion recovered for federal losses, the DOJ also recovered millions of dollars for state and Medicaid programs for FY 2019.⁵ 

As seen in years past, the largest healthcare recoveries were obtained from the drug and medical device industry. Two of the largest settlements within the healthcare industry, in 2019, involved opioid manufacturers. According to the DOJ’s press release, these recoveries reflect “the department’s commitment to holding drug companies accountable for their role in the opioid crisis.”⁶ One recovery involved multinational consumer goods manufacturer, Reckitt Benckiser Group paid $1.4 billion to settle civil and potential criminal liability pertaining to the marketing of their opioid addiction treatment drug, Suboxone.⁷ The drug, designed to reduce withdrawal symptoms while users receive addiction treatment, and its active ingredient buprenorphine are “powerful and addictive opioids.”⁸ This settlement is the largest recovery in a case pertaining to opioid drugs and is one of the five largest healthcare settlements of the past decade.⁹

Additional legal action was brought by the DOJ against other drug manufacturers. In 2019, seven pharmaceutical manufacturers paid a total of $624 million in settlements. These manufacturers, including Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmaceuticals, Inc., Lundbeck LLC, and US Worldmeds LLC, paid to settle allegations of paying patient copays for their company’s drugs through seemingly independent charitable foundations – a violation of the Anti-Kickback Statute.¹⁰

The DOJ also pursued cases involving several other sectors within the healthcare industry during FY 2019, including private physician practices, health systems, laboratory service providers, and medical supplies and technology companies, resulting in large recoupments.¹¹ The most noteworthy of these actions included the $48 million recovery received from Encompass Health Corporation (f/k/a HealthSouth Corporation), the largest inpatient rehabilitation facility (IRF) operator in the U.S., to settle allegations of Medicare fraud.¹² The IRF operator allegedly provided misinformation to Medicare in order to receive a higher reimbursement rate and admitted some patients to its IRFs unnecessarily.¹³  This settlement comes only a decade after the company, under its former name HealthSouth Corporation, paid a $325 million settlement under the False Claims Act (FCA) for fraudulent Medicare billing in 2009.¹⁴ 

Of note, the DOJ’s press release included an additional section entitled, “Holding Individuals Accountable,” wherein it reviewed several cases in which the DOJ obtained substantial judgments from individuals, illustrating its continued commitment to the 2015 memorandum authored by then-Deputy Attorney General Sally Yates regarding holding individuals accountable for corporate wrongdoing (often referred to as the “Yates Memo”).¹⁵

Money recovered by the DOJ through healthcare fraud enforcement is crucial in returning assets back to federally-funded programs such as Medicare, Medicaid, and TRICARE.¹⁶ Since 1986, recoveries made under civil FCA suits total more than $62 billion.¹⁷ Over the past five years, there has been a significant number of FCA suits brought on by both whistleblowers (also known as qui tam lawsuits) and the DOJ, with 636 qui tam cases and 146 non qui tam cases initiated in FY 2019 alone (both of which numbers are substantially similar to FY 2018 figures).¹⁸  Despite the Trump Administration’s actions to deregulate the healthcare industry during the past three years, the number of new cases enforcing healthcare fraud and abuse laws in 2019 appears to be on par with figures from previous years,¹⁹ suggesting that FCA enforcement will remain high going forward.