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DOJ Recovered $2.4B in Healthcare False Claims Act Cases in 2017

High-priced healthcare False Claims Act cases this year included the $155 million eClinicalWorks settlement.

Healthcare False Claims Act

Source: Thinkstock

By Kate Monica

- The Department of Justice (DOJ) recovered approximately $2.4 billion from healthcare False Claims Act cases in 2017, according to an announcement by the federal agency this month.

In total, DOJ recovered $3.7 billion in settlements and judgements from civil cases involving fraud and false claims throughout fiscal year (FY) 2017. Apart from healthcare fraud, false claims cases this year included housing and mortgage, procurement, and individual accountability fraud.

Healthcare fraud cases this year involved drug companies, hospitals, pharmacies, labs, and individual physicians. By pursuing these cases, DOJ helped to restore millions of dollars in false meaningful use incentive payments to Medicare and Medicaid.

The largest false claims act cases this year were against drug companies and health IT companies, according to DOJ.

“The largest recoveries involving the health care industry this past year – over $900 million – came from the drug and medical device industry,” stated DOJ in the report.

The eClinicalWorks $155 million settlement was one of the largest false claims cases this year involving an EHR company. eClinicalWorks was accused of falsely obtaining EHR certifications by concealing certain aspects of its EHR solution that did not comply with ONC requirements.

“For example, rather than programming all the required standardized drug codes into its software, the company allegedly ‘hardcoded’ into its software only the drug codes required for testing,” wrote DOJ. “As a result of the deficiencies in its software, eClinicalWorks allegedly caused physicians who used its software to submit false claims for federal incentive payments.”

Prosecutors also alleged eClinicalWorks paid kickbacks to certain EHR users in exchange for positive product promotion. The settlement was the largest False Claims Act recovery in the District of Vermont, according to Acting United States Attorney for the District of Vermont Eugenia Cowls.

In addition to the eClinicalWorks settlement, DOJ also recovered false payments from Mylan, Shire Pharmaceuticals, and Life Care Centers of America, among others.

Mylan paid approximately $465 million to resolve allegations it had underpaid rebates owed to Medicaid, while Shire paid $350 million to resolve allegations it had paid customers kickbacks in exchange for overuse of its product.

Life Care Centers of America paid a $145 million settlement over allegations it caused skilled nursing facilities to submit false claims for rehabilitation services. It was the largest civil case with a skilled nursing facility chain in the history of the False Claims Act. 

“While we encourage voluntary reporting of suspected federal violations through self-disclosures, compliance guidance, and corporate integrity agreements, the False Claims Act holds accountable those healthcare organizations unwilling to comply with law,” said HHS Inspector General Daniel R. Levinson.

“Large health care recoveries benefit vulnerable Medicare and Medicaid beneficiaries as well as the taxpayers who support these programs,” he continued.

While eClinicalWorks settled the false claims act allegations earlier this year, another lawsuit has been brought against the company that is still unresolved.

In November, eClinicalWorks was sued for nearly $1 billion in monetary damages for breach of fiduciary duty and gross negligence following claims an individual died of cancer due to faulty patient EHRs.

“Prior to his death from cancer, Stjepan Tot learned about eClinicalWork’s failure to maintain his medical records in a manner that maintained their integrity,” stated court documents.

The complaint also claimed millions of patients with health records stored on eClinicalWorks EHR systems have compromised EHRs since the health IT company’s EHR solution did not meet health IT certification requirements as dictated by ONC.

“Patients and doctors cannot rely on the veracity of those records,” the lawsuit stated. 



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