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Most FCA recoveries related to healthcare, attorney says


The Justice Department recovered a record-breaking amount of settlements and judgments from False Claims Act cases last year, and most of those cases were related to healthcare cases — “like they always [are],” Polsinelli attorney Kevin Coffey said Wednesday during a webinar hosted by the law firm.

Many of the notable settlements in 2023 were related to long-term care or post-acute facilities, Polsinelli attorney Dayna Staron said.

In one case, she noted, the owner and manager of six skilled nursing facilities in California agreed to enter into a $45.6 million consent judgment to resolve allegations that they submitted or caused the submission of false claims to Medicare by paying kickbacks to physicians to induce patient referrals.

“So the directors allegedly did little to no work but were paid handsomely in exchange for their referrals to these different SNFs,” Staron said.

“This is not a new scheme. We’ve seen it for years,” she added, “but the takeaway here is that the government will continue to look at providers’ agreements with their medical directors. The agreements can be sham.” 

In another notable case, she noted, the Justice Department recovered $7.2 million from Saratoga Center for Rehabilitation and Skilled Nursing Care in New York. The SNF operators were accused of providing “worthless service” to residents over four years of mismanagement marked by what the government deemed patient safety violations and fraudulent billing.

“You can’t bill Medicare for services that, even if they’re provided, are so below standard that they can be deemed to be either worthless or, in fact, harmful. The owners actually had a licensed operator at one point, but in an effort to save some money, they pushed the licensed operators out and then they put in an unlicensed experienced operator in their place,” Staron said. “When that happened, the facility began to really deteriorate.”

“So here we have the DOJ holding the alleged bad actors to account for billing Medicaid for these worthless services. Sort of a notable case that shows the government is not only going to use the False Claims Act to go after coding or medically unnecessary services, but also services that may be putting folks in harm’s way,” Staron added.

Coffey noted the DOJ recovered almost $2.7 billion across all industries over a 12-month period. That’s an increase of approximately 20% over the prior year’s figure, which was approximately $2.2 billion. Of the almost $2.7 billion recovered, around $1.8 billion was related to healthcare, including complaints against long-term care facilities, managed care, hospitals, pharmacies, labs and physicians.

“What’s pretty interesting here is that those recoveries were spread out over a greater number of settlements and judgments. Private whistleblowers and the government settled around 200 more matters in 2023 than they did in 2022,” Coffey said.



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