Whistleblowers helped DoJ collect nearly $10B in healthcare fraud cases

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The U.S. Department of Justice (DoJ) closed 379 healthcare fraud cases and recovered $9.3 billion from defendants from 1996 to 2005, according to a study in the Sept. 2 issue of the Annals of Internal Medicine.

Aaron S. Kesselheim, MD, from the division of pharmacoepidemiology and pharmaco-economics at Brigham and Women’s Hospital in Boston, and David M. Studdert, MD, from the University of Melbourne Law School in Victoria, Australia, conducted the study. 

In the 1990s, the DoJ increased efforts to combat healthcare fraud, focusing on false claims made to Medicare and Medicaid programs in particular. The volume of litigation and financial recoveries related to healthcare grew quickly, especially with qui tam actions enforcement actions initiated by whistleblowers, who are private citizens with inside knowledge of the alleged fraud.

Case frequency peaked in 2001, but annual recoveries increased sharply from 2002 to 2005, according to the authors. The whistleblowers were frequently executives or physicians, and 75 percent were employees of defendant organizations.

By 2005, 90 percent of new healthcare fraud enforcement actions were initiated by whistleblowers, according to the researchers.

Overall, the most common targets were provider organizations and billing practices, Kesslheim and Studdert said. Although pharmaceutical manufacturers accounted for only 13 of the 379 cases, they accounted for nearly 40 percent of the total recovery ($3.6 billion) because of the size of the awards for whistleblowers.   
Of the $9.3 billion in financial recoveries, $7.2 billion was returned to the federal government, $861 million went to state governments, and whistleblowers received more than $1 billion.

The researchers said that fraud and abuse may increase during periods of rapid market expansion, but closer government oversight may also be a factor.