False Claims Act Allegations Peak in 2023

In 2023, over $2.7 billion in federal False Claims Act allegations were paid by health care providers. This spike in investigation costs suggests that in 2024, more federal False Claims Act allegations will be resolved. In September of 2023, the Department of Justice found over 543 settlements, an annual record for that year in false Claims cases. Whistleblowers are also rewarded 3x the cost of damages for the case they bring forward if a provider is found guilty of wrongfully billing Medicare or Medicaid for services that are not provided or unnecessary for the patient. This new function has both positive and negative feedback from health care providers. On one hand, rewarding whistleblowers discourages health care providers from making fraudulent claims. On the other hand, it can promote deceptive claims that waste time and money for operators and legal aide.

The Saratoga Center for Rehabilitation and Skilled Nursing Care $7.1 million settlement also took place in 2023. In this case, the owners had provided unnecessary services to their resident for 4 years and had several patient safety violations and falsified patient bills. Cigna had a settlement with the Department of Justice for $172 million and Martin’s Point Health care for $22.5 million when they investigated the allegations made against Medicare Advantage plans. UnitedHealth Group is also being investigated by the department for similar allegations. Another influence for false claims allegations settlements are future COVID relief payouts. A portion of these investigations are influenced by Biden’s growing focus on services for aging communities and a specifically on the state of nursing homes.

“This trend of continued growth in recoveries is likely to continue as the recovery grows [because] more money is available to contribute to enforcement budgets and expanding staffing and hiring,” Baker Donelson Attorney Thomas Barnard said. “The FCA will continue to grow in use as it serves not only as a mechanism for recovering funds, but there continues to be increased efforts to use it to enforce policy priorities as well to shape behavior—like with cybersecurity.”

Will there be relief for these false claim actions? Last year, the Supreme Court ruled that the government is allowed to dismiss civil cases when the whistleblower is no longer supported, or the whistleblower has been proven to achieve significant financial gains from litigation. This decision, which took place last June, was decided too early to impact courts for the rest of 2023. 2023 was also the second year in a row that less money was recovered from involvement in government-initiated cases than in the whistleblower ones. $2.3 billion of the overall $2.7 billion (86%) in federal false claims act allegations were from whistleblower cases. In 2023, of the False Claim Act settlements and Judgements that were reported, $1.8 out of $2.68 billion involved the health care industry. Health care providers financial concerns about relief and false suits is fully dependent on the status of the Justic Department’s annual review in 2023.

Reference

Marselas K. False Claims notch a record year, increasing threat to skilled nursing. McKnight’s Long-Term Care News. Published February 26, 2024. Accessed February 27, 2024. https://www.mcknights.com/news/false-claims-act-settlements-hit-record-high-in-2023/