Updated on: June 22, 2012

Department of Justice Recovers $2.5 Billion in Healthcare Fraud Recovery: More Than $27.5 Billion Since 1986

Original story posted on: November 23, 2010

cbuck100The Department of Justice announced on Monday that it recovered  $2.5 billion in healthcare fraud—the largest in history—and represents the second largest annual recovery of civil fraud claims.

Health and Human Services (HHS) netted the biggest recoveries, largely attributable to its Medicare and Medicaid programs, according to a news release issued by the Department of Justice and posted on its Web site. Recoveries were also made by the Office of Personnel Management, which administers the Federal Employees Health Benefits Program, the Department of Defense for its TRICARE insurance program and the Department of Veterans Affairs, among others.

Justice Department said the amounts recovered under the False Claims Act since January 2009 have exceeded any previous two-year period with $5.4 billion in taxpayer dollars returned to federal programs and the Treasury. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $27 billion.

"Under Attorney General Eric Holder’s leadership, our aggressive pursuit of fraud under the False Claims Act has resulted in the largest two-year recovery of taxpayer dollars in the history of the Justice Department," Tony West, Assistant Attorney General for the Civil Division, said. "Nowhere is this more apparent than in our success with fighting health care fraud. Since January 2009 the Civil Division, together with the U.S. Attorneys’ offices, commenced more health care fraud investigations, secured larger fines and judgments and recovered more taxpayer dollars lost to health care fraud than in any other two-year period."

Fighting fraud committed against public healthcare programs is a top priority for the Obama Administration, noted the Justice Department. On May 20, 2009, Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services (HHS), announced the creation of a new interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. These efforts not only protect the Medicare Trust Fund for seniors and the Medicaid program for the country’s neediest citizens, but also result in higher quality health care at a more reasonable price.

Fiscal year 2010 also saw records for several types of healthcare fraud. A $2.3 billion settlement with Pfizer Inc. marked the largest healthcare fraud settlement in history, said the Justice Department. The $2.3 billion includes $669 million recovered under the federal False Claims Act, $1.3 billion in criminal fines and forfeitures, and $331 million in recoveries for state and the District of Columbia Medicaid programs. (These latter two amounts are not included in the total health care fraud recoveries announced on Monday, which are limited to the federal government’s civil recoveries.) In addition, a $108 million settlement with The Health Alliance of Greater Cincinnati and one of its former member hospitals, The Christ Hospital, was the largest ever under the health care Anti-Kickback Statute for the conduct of a single hospital.

The largest fiscal year 2010 False Claims Act recoveries came from the pharmaceutical and medical device industries, which accounted for $1.6 billion in settlements, including the $669 million from Pfizer Inc., $302 million from AstraZeneca, and $192.7 from Novartis Pharmaceutical Corporation.


Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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