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7 Biggest Healthcare Fraud Cases Of 2023 

February 2, 2024

7 Biggest Healthcare Fraud and Other False Claims Act Cases of 2023

2023 was another blockbuster year for healthcare fraud whistleblowers under the False Claims Act. Through the diligent efforts of healthcare whistleblowers and their whistleblower attorneys, several high-profile cases settled for hundreds of millions of dollars and it’s another year in which whistleblower awards in aggregate were in the hundreds of millions of dollars. This year continues the ongoing trend of healthcare related False Claims Act reporting and enforcement actions steadily increasing, with 2023 marking itself as the new recordholder in a number of different fraud enforcement categories. While there were countless healthcare fraud actions that were successfully enforced in 2023, seven in particular found their names garnering headlines. As mentioned by Lex Machina, the healthcare fraud whistleblower law firm of Brown, LLC led the way with some notable qui tam results, albeit the list below contains cases from some of the best whistleblower law firms and considerable work from the Department of Justice itself.

$2.5 Billion- 78 charged in DOJ’s Health Care Fraud Strike Force Program

The DOJ, along with federal and state partners, engaged in a two-week national campaign that brought criminal charges against 78 defendants for alleged participation in “health care fraud and opioid abuse schemes that included over $2.5 billion in alleged fraud.”[1] These defendants are accused of defrauding government funds aimed at caring for the elderly and the disabled. The allegations also include claims that these funds were even used for such expenses as exotic cars, yachts, jewelry, and other luxury expenses, all paid for using public healthcare funds. The allegations involve a mixture of Telemedicine fraud, Pharmaceutical fraud, and improper Opioid Distribution fraud.

Attorney General Merrick B. Garland said this of the strike force program: “These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it. The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.” [2]

All told, the “FBI, HHS-OIG, DEA, and CMS/CPI, State Medicaid Fraud Control Units, HSI, FDA, IRS-CI, VA-OIG, USPS-OIG, FDIC-OIG, OPM-OIG, Amtrak-OIG, and other federal and state law enforcement agencies participated in the operation.”[3]  Since the creation of the Health Care Fraud Strike Force Program in 2007, the DOJ has charged over 5000 defendants and brought enforcement involving over $24 billion in healthcare fraud.[4]

$490 Million- Precision Lens Judgment

After nearly a decade long lawsuit against Precision Lens, a jury found that the company owes $490 million, which includes treble damages and penalties. The jury found that Precision Lens regularly offered kickbacks in the form of luxury travel, sports tickets, and so on, to incentivize the use of their company products in cataract surgeries. The Minnesota federal jury found that the company had fraudulently submitted 64,575 false claims to Medicare, which resulted in more than $43 million in damages to the program.[5] The awarded damages were elevated because, “Under the FCA, the government is entitled to three times the amount of damages it sustained. The government, which intervened in the suit about five years after an executive at a competing business filed allegations implicating both companies and other individuals in the kickback scheme, was also granted more than $358 million in statutory penalties.”[6]

This case is of particular importance, because it highlights the extreme financial risk involved for a defendant of a False Claims Act lawsuit going to trial. For this reason, most False Claims Act suits settle before trial. In either case, False Claims Act settlements or judgments involve a substantial award for their relator—up to 30% in non-intervened cases.

$830 Million- COVID-19 Fraud Enforcements – PPP Loan Fraud

In August of 2023, the Department of Justice conducted 718 Covid-19 related fraud enforcement actions against over 300 defendants, which implicated a great deal of fraud in the PPP loan program. These defendants have allegedly committed over $830 million in Covid-19 fraud. These sweeping enforcement actions include a case against two California entities who allegedly submitted $359 million in fraudulent claims for unnecessary tests, and a Texas lab that billed millions to Medicare for unnecessary Covid-19 tests. All told, criminal cases were filed against 371 defendants, of which 119 pleaded guilty or were convicted at trial. [7]

Garland said this of the action: “This latest action, involving over 300 defendants and over $830 million in alleged COVID-19 fraud, should send a clear message: the COVID-19 public health emergency may have ended, but the Justice Department’s work to identify and prosecute those who stole pandemic relief funds is far from over.”[8]

While most of the enforcements in this sweep were criminal, there is a high probability that False Claims Act cases will surge in the coming years, after federal prosecutors complete their preliminary round of criminal enforcement. As these criminal enforcements demonstrate, there is no shortage of healthcare fraud, especially given the unprecedented amounts of pandemic funding, much of which fraudulently used and remains to be recovered.

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$172 Million- Cigna Group Settlement

In September, Cigna agreed to pay over $172 million to settle allegations of diagnosis code fraud. This case was brought to the attention of the Department of Justice following the report of a healthcare whistleblower, who stands to receive up to a quarter individually. This whistleblower informed the Department of Justice that Cigna fraudulently billed “Medicare Advantage by coaxing nurses to diagnose policyholders with overstated health problems. Over a five-year span, the government overpaid Cigna by more than $1.4 billion, the whistleblower’s suit alleged.”[9] This settlement is good news for healthcare whistleblowers, because it signals that the DOJ’s continuing commitment to root out insurance fraud.

32.5 Million- Genomic Health Settlement

In October of 2023, a settlement was announced between whistleblower law firm Brown, LLC and Genomic Health, Inc. (GHI) in the amount of $32.5 million. This settlement resolved allegations that GHI actively and knowingly extended the period in which laboratory tests were performed to increase billing without any medical necessity for such a practice. In so doing, GHI allegedly defrauded public healthcare funds, and thereby violated the False Claims Act. Moreover, not only were taxpayer funds illegitimately obtained, but GHI also caused potential harm and inconvenience to patients, all the while creating unnecessary inefficiency in laboratory processing.  GHI did not provide an admission of guilt, but instead settled to resolve all the complaints made against them. The relator in the case received an excess of $5 million.

$31 Million- NextGen Healthcare Inc. Settlement

Two nurses blew the whistle on NextGen Healthcare, informing the DOJ through use of healthcare whistleblower counsel, that “NextGen Healthcare sold software that was designed to pass tests required for a Medicaid stimulus program. However, the company’s programs relied on an auxiliary product designed only to perform the certification test scripts of the program and lacked ‘critical functionality.’” [10] This case demonstrates an emerging field of healthcare technology fraud cases, many of which will stand to involve millions of dollars in whistleblower reporting awards.

$21 Million- A1H Holdings LLC

A Michigan federal judge ordered a former executive of A1H Holdings LLC to serve 4.5 years in prison and pay $21 million in restitution after a jury found the former executive guilty of the fraudulent submission of $50 million in false Medicare claims. The former executive and co-conspirators who plead guilty, shipped prescription refills for high-reimbursing medications and supplies without patient consent and enrolled their mail-order pharmacies as brick-and-mortar retail pharmacies to avoid more vigilant oversight.”[11]

Healthcare Whistleblower Outlook

As these  cases demonstrate, the federal government has made it a priority to recover as much as it can from those that fraudulently obtained healthcare funds. Given the influx of recent pandemic funding, and the shift to telehealth, there is a large pool of unchallenged fraud that has yet to be investigated and recovered. It is therefore now more important than ever for healthcare fraud whistleblowers to seek experienced healthcare fraud counsel, who can help ensure that their case is properly presented and filed, so that their chance of a successful award is maximized.

[1] https://www.justice.gov/opa/pr/national-enforcement-action-results-78-individuals-charged-25b-health-care-fraud

[2] https://www.justice.gov/opa/pr/national-enforcement-action-results-78-individuals-charged-25b-health-care-fraud

[3] https://www.justice.gov/opa/pr/national-enforcement-action-results-78-individuals-charged-25b-health-care-fraud

[4] https://www.justice.gov/opa/pr/national-enforcement-action-results-78-individuals-charged-25b-health-care-fraud

[5] https://www.law360.com/whitecollar/articles/1776111/6-biggest-healthcare-fraud-cases-of-2023

[6] https://www.law360.com/whitecollar/articles/1776111/6-biggest-healthcare-fraud-cases-of-2023

[7] https://www.law360.com/whitecollar/articles/1776111/6-biggest-healthcare-fraud-cases-of-2023

[8] https://www.law360.com/whitecollar/articles/1776111/6-biggest-healthcare-fraud-cases-of-2023

[9] https://www.law360.com/whitecollar/articles/1776111/6-biggest-healthcare-fraud-cases-of-2023

[10] https://www.law360.com/whitecollar/articles/1776111/6-biggest-healthcare-fraud-cases-of-2023

[11] https://www.law360.com/whitecollar/articles/1776111/6-biggest-healthcare-fraud-cases-of-2023