Department of Justice announced that in fiscal year 2012, the government recovered $4.9 billion
that had been lost due to fraud against the federal government. Relators
— the folks I represent as a whistleblower’s attorney —
brought cases that recovered $3.3 billion of that $4.9 billion. Of the
4.9 billion in recoveries, the vast majority of the fraud – 3 billion
in total – was detected in the healthcare arena. DOJ was rightfully
proud of the recoveries in the area of health care fraud.
In Fall 2011, I heard Health and Human Services Secretary Kathleen Sebelius
talk with pride about her 2009 initiative with Attorney General Eric Holder.
Together Sebelius and Holder declared open war on health care fraud, creating
an interagency task force to actively pursue health care fraud, both criminally
and civilly. At the 2011 Taxpayers Against Fraud conference in Washington,
D.C., Secretary Sebelius spoke proudly of the task force the two had created,
and of the success it has had.
In fact, the Health Care Fraud Prevention and Enforcement Action Team (HEAT)
has been wildly successful in seeking out and stopping fraud against the
federal government in the health care arena. Since the agency was created,
the Justice Department has recovered $9.5 billion dollars of the health
care fraud that is plaguing our nation and draining the federal coffers.
Given where the federal government’s health dollars go, it is no
surprise that the majority of these funds have been recovered from medical
facilities that were cheating Medicare or Medicaid.
For the second year in a row, the largest recoveries have come from pharmaceutical
companies and companies that manufacture medical devices. In drug and
medical device cases alone, the federal government recovered $2 billion
dollars of stolen money, and passed out another $745 million to state
Medicaid programs that had been defrauded.
Of the three top settlements involving drugs and medical devices, the larges
were with GlaxoSmithKline LLC (GSK) and Merck, Sharp & Dohme. The
Justice Department pointed out that it was not even counting a recent,
enormous settlement with Abbott Laboratories, because the settlement will
be reflected in the report the Justice Department issues for Fiscal Year 2013.
The GSK settlement, which was for $1.5 billion, was related to False Claims
Act claims about the drugs Advair, Lamictal, Paxil, Wellbutrin and Zofran.
The Justice Department accused GlaxoSmithKline of promoting those drugs
for off-label use, and of paying physicians kickbacks in order to get
the physicians to prescribe the drugs. DOJ also said that GSK had used
kickbacks to try to pump the sales of drugs Flovent, Imitrex, Lotronex
and Valtrex. The Department also made allegations that GSK had made false
and misleading statements about whether Avandia was safe to use. Finally,
DOJ said that GSK had claimed false “best prices” (drug companies
agree to give the government “best prices”) and had underpaid
Medicaid drug rebates that the company owed.
In fact, the GSK settlement has taken its place in the annals of history
as s the largest health care fraud settlement in U.S. history. The federal
government recovered $1.5 billion in civil recoveries, as part of a $3
billion global settlement that included amounts attributed to criminal
fines and forfeitures and to state Medicaid recoveries.