According to a report released by the DOJ in December 2018, False Claims Acts cases led to $2.88 billion in recoveries during the last fiscal year. A staggering 84 percent of them were initiated by whistleblowers, leading to 73 percent of the total of settlements and judgments, and amounting to $2.044 billion. As a result of these successful lawsuits, FCA whistleblowers received a total of $301 million in awards in 2018.
Nearly 9 out of every 10 cases filed during 2018 were related to healthcare fraud. The top recoveries from fraudsters in the sector included $625 million from AmerisourceBergen Corp., which allegedly, illegally repackaged cancer medication, deriving hundreds of millions in profits. A handful of massive settlements, five to be exact, including the one with AmerisourceBergen amounted to $1.5 billion of the total recoveries.
The largest healthcare fraud recoveries also included a $360 Million settlement with drug maker Actelion over kickbacks, one with Insys over opioid kickbacks, amounting to $150; another one, of $260 million, with hospital chain Health Management Associates over kickbacks and fraudulent billing; and one amounting to $270 million, paid by Medicare Advantage provider HealthCare Partners Holdings, for defrauding the program.
The AmerisourceBergen whistleblowers received a total of $93 million in awards. The top relator rewards for 2018 also include $83 million paid to three whistleblowers in a case against Merrill Lynch, $62.7 million paid to a single whistleblower in a case against Sprint Communications over tax fraud, and two SEC whistleblowers who received $54 million in a confidential case.
In spite of some large recoveries from the financial sector, healthcare fraud was the most rampant in 2018, and it led to a total of $2.5 billion worth of settlements and judgments.
These statistics reveal that the upward trend of healthcare fraud continues, when considered as a percentage of the total FCA claims and recoveries. In other words, recoveries may go up and down, but the size of the pie for healthcare fraud keeps growing. In fact, the $2.8 billion recovered – from all cases – in 2018 is the lowest number in nearly a decade.
On the other hand, whistleblowers keep leading the way when it comes to exposing fraudsters. Of the 767 cases filed in the 2018 fiscal year, 645 were brought forward by whistleblowers.
A crucial trend observed during 2018 has to do with holding not only corporations, but also individuals, accountable. In fact, executives from prosecuted companies had to respond and settle claims with millions of dollars of their personal assets, especially in the healthcare sector. We will likely continue to see boards and senior management personally held accountable for the fraud committed under their guidance, judging from the DOJ’s recent announcements about the issue.
To exemplify the trend, 2018 also saw a pharmaceutical company’s CEO prosecuted for his role in the opioid crisis, for the first time in FCA history. The CEO, John Kapoor, who is presently at trial, could go to jail for up to 20 years.
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