Healthcare companies paid 90% of False Claims Act settlements in 2021


A number of settlements related to the popular, almost $350 billion Medicare Advantage program, which pays a capitated amount to private health insurers for each patient enrolled in their plan according to a risk calculation. The California-based not-for-profit health system Sutter Health, for example, paid $90 million to settle a lawsuit that it knowingly submitted unsupported diagnosis codes for certain visits to inflate payments. Kaiser Foundation Health Plan of Washington, formerly Group Health Cooperative, paid $6.3 million to resolve similar allegations.

There were a number of settlements involving illegal kickbacks. For example, the electronic health records vendor Athenahealth paid more than $18 million to resolve claims that it invited customers and would-be customers to all-expense-paid sporting, entertainment and recreational events to boost sales.

The mail-order diabetic testing supply company Arriva Medical and its parent company agreed to pay $160 million to settle allegations it paid kickbacks to Medicare beneficiaries by offering them free diabetic testing glucometers and by routinely waiving copayments for diabetic testing supplies.

The settlements also involved claims of providing unnecessary medical services. In one case, SavaSeniorCare agreed to pay $11.2 million over claims that it provided medically unreasonable, unnecessary or unskilled rehabilitation services to Medicare patients.

Of the $5.6 billion in settlements obtained under the False Claims Act, more than $1.6 billion stemmed from lawsuits filed under the law’s qui tam, or whistleblower, provisions. The government paid $237 million to whistleblowers who filed qui tam lawsuits.

The DOJ in recent years began naming private equity owners as defendants in its False Claims Act lawsuits against healthcare companies, and a department official in 2020 pledged to ramp up enforcement against those financial investors.



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