DOJ Secures $1.7B in Healthcare False Claims Settlements for 2024, Highlighting Ongoing Industry Scrutiny

The Department of Justice (DOJ) has announced that it recovered over $2.9 billion from False Claims Act settlements and judgments during the 2024 fiscal year, with healthcare-related cases accounting for nearly $1.7 billion of the total. This substantial sum underscores the continued focus on fraud and abuse within the healthcare sector, particularly in areas such as opioid prescribing practices, Medicare Advantage, and kickback schemes.

Healthcare Fraud Remains a Primary Target

Healthcare fraud investigations accounted for more than half of the DOJ's settlements and judgments in 2024. The recovered funds will go towards restoring defrauded federal healthcare programs, including Medicare, Medicaid, and TRICARE. Principal Deputy Associate Attorney General Benjamin Mizer emphasized the critical role of the False Claims Act in protecting public finances and ensuring taxpayer funds are used as intended.

Notable settlements in the healthcare sector included:

• Rite Aid Corporation and its affiliates paid $7.5 million and agreed to a $401.8 million claim in bankruptcy proceedings over allegations of improperly dispensing controlled substances.
• Community Health Network settled for $345 million in a case involving violations of the Stark Law.
• Endo Health Solutions agreed to a $475.6 million claim related to aggressive marketing of an opioid medication.
• Oak Street Health, a CVS Health affiliate, paid $60 million to resolve allegations of kickback payments to insurance agents for patient recruitment.

Increased Scrutiny on Medicare Advantage and Opioid-Related Fraud

The DOJ highlighted its ongoing focus on fraud within the Medicare Advantage program, citing active litigation against major insurers such as UnitedHealth Group, Elevance Health, and Kaiser Permanente over alleged upcoding practices. These cases involve accusations of reporting additional or more severe medical diagnoses to receive higher reimbursement levels.

Opioid-related fraud also remained a priority, with several settlements targeting companies and individuals alleged to have contributed to the opioid epidemic. The DOJ's efforts extended to providers accused of billing for medically unnecessary services, delivering substandard care, or engaging in referral kickback schemes.

Record-Breaking Whistleblower Activity and Future Outlook

The 2024 fiscal year saw an unprecedented number of whistleblower cases, with 979 filings contributing $2.4 billion to the total recoveries. Whistleblowers received over $400 million for their role in exposing fraudulent activities.

While the overall recovery amount surpassed the previous year's $2.7 billion, the healthcare-specific total slightly decreased from fiscal year 2023's $1.8 billion. However, the DOJ's commitment to combating healthcare fraud remains steadfast, as evidenced by ongoing investigations and the recent success of its Health Care Fraud Strike Force operation, which resulted in charges against 193 individuals involving over $2.75 billion in intended losses.

As the pharmaceutical and healthcare industries continue to evolve, the DOJ's enforcement actions serve as a reminder of the ongoing scrutiny and potential legal consequences for companies and individuals engaging in fraudulent practices within these sectors.