On July 16, Los Angeles-based law firm Gibson Dunn released their 2019 Mid-Year False Claims Act Update. The False Claims Act imposes liability on people and organizations who defraud government programs. It is the government’s most effective defense against fraud and abuse. In the first half of the year, the Department of Justice recovered over $750 million in settlements–a majority of which stemmed from the healthcare industry.
Gibson Dunn explains that healthcare settlements result predominantly from cases involving violations of Stark Law and the Anti-Kickback Statute. Healthcare fraud is a pressing matter for the US government, and prosecuting healthcare fraud produces significant return. Together, the False Claims Act, Stark Law, and the Anti-Kickback Statute protect the government from healthcare fraud and abuse.
According to the Department of Justice, the largest of these settlements came from opioid manufacturer Insys Therapeutics. Insys entered a $225 million global resolution to settle the government’s separate criminal and civil investigations–$195 million will settle allegations that it violated the False Claims Act. Initial investigations into Insys’s activities began with the allegation that the company had paid kickbacks for the promotion of their painkiller.
Insys’s settlement is a demonstration of the government’s resolve to protect itself against fraud and combat the opioid epidemic. However, not all False Claims Act violations are the result of malicious intent. Healthcare organizations need to remain diligent in their compliance with Stark Law and the Anti-Kickback Statute. An organization in violation of either law could be subject to penalties under the False Claims Act.
Earlier this year, Georgia’s Union General Hospital agreed to a $5 million settlement to resolve allegations that it had violated Stark Law. The Department of Justice states that Union General Hospital compensated physicians at rates not in compliance with fair market value. Gibson Dunn summarizes several other instances in which hospitals and healthcare organizations were penalized under the False Claims Act for violations of Stark Law and the Anti-Kickback Statute.
With the level of attention being afforded to False Claims Act violations, it is crucial that healthcare organizations establish rigorous contract management processes to remain in compliance with fair market value. If you have concerns about your organization’s compliance, check out these resources. Further questions? Email us at info@mdranger.com to get in contact with our experts.
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