Under the False Claims Act, the Department of Justice (DOJ) recovered more than $1.8 billion from settlements and judgments related to federal health matters in the last fiscal year. This amount represents about two-thirds of the DOJ’s total monetary fraud recoveries. Scams affected various sectors of the healthcare industry, including managed care providers, hospitals, pharmacies, and long-term acute care facilities. The DOJ clarified that the $1.8 billion covers recoveries “arising only from federal losses,” but they often secured additional funds for state Medicaid programs.
DOJ Increases Scrutiny on Medicare Advantage Plans
Health law expert Bill Sarraille warned that the DOJ findings serve as a clear warning to health plans. “The press release goes out of its way to signal that Medicare Advantage plans’ risk adjustment practices are DOJ’s most important healthcare fraud priority,” he told Fierce Healthcare. “It telegraphs that by making MA risk adjustment the first, and most prominent, specific area it addresses.”
DOJ Highlights Settlements with Cigna Group and Martin’s Point Health Care
The DOJ noted Cigna Group and Martin’s Point Health Care as the first settlements in its report. In October 2023, Cigna agreed to pay $172 million to settle whistleblower allegations that it submitted false Medicare Advantage diagnostic codes to increase reimbursements. Subsequently, Cigna decided to sell its Medicare Advantage business to Health Care Services Corp in January 2024. Martin’s Point Health Care agreed to pay $22.5 million in August 2024 to resolve False Claims Act violations.
DOJ Utilizes the False Claims Act to Combat Fraud
The False Claims Act imposes penalties on those who defraud government programs. Last year, the DOJ recovered $2.2 billion through this act. “Protecting taxpayer dollars from fraud and abuse is of paramount importance to the Department of Justice—and these enforcement figures prove it,” said Acting Associate Attorney General Benjamin Mizer. “The False Claims Act remains one of our most important tools for rooting out fraud, ensuring that public funds are spent properly, and safeguarding critical government programs.”
OIG Plans Strategic Oversight to Address Fraud
The government is stepping up its focus on Medicare Advantage (MA) plans and risk adjustment practices, according to health law experts. In January, the Office of Inspector General (OIG) stated it needs to “hold MA organizations and MCOs accountable” and found that 13% of prior authorization requests were denied. The OIG plans to expand its engagement with plans and their special investigation units to prevent fraud.
DOJ Broadens Efforts to Combat Healthcare Fraud
The DOJ also reiterated its commitment to holding organizations accountable for contributing to the opioid crisis, pointing to legal actions against Rite Aid and Endo Health Solutions. In addition, the DOJ continues to pursue cases involving fraud related to unnecessary billing practices, unlawful kickbacks, the California Medicaid program, skin graft reimbursements, cybersecurity issues, and the COVID-19 pandemic.
