Top Healthcare Fraud Recoveries 2019, Opioid Makers Lead The Way

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Top Healthcare Fraud Recoveries 2019, Opioid Makers Lead The Way

It is no secret that healthcare fraud is rampant in America. Notwithstanding, the last decade has seen more fraud investigations and False Claims Act recoveries than ever before. In 2019, just like in the nine previous years, healthcare fraud settlements and judgments surpassed $2 billion.

2019 Healthcare Fraud by the Numbers 

  • The federal government recovered $2.6 billion from companies and individuals that defrauded Medicare, TRICARE, and other federal programs. 
  • $2.1 billion in recoveries resulted from whistleblower lawsuits
  • 633 whistleblowers initiated healthcare fraud investigations

The majority of the companies that faced healthcare fraud allegations in 2019 were drugmakers, medical device manufacturers, managed care providers, hospitals, pharmacies, and hospice care providers. Doctors were also often the target of whistleblower lawsuits and criminal investigations. 

Top Healthcare Fraud Recoveries 2019

The largest healthcare fraud recoveries in 2019 came from opioid manufacturers, once more highlighting the prevalence of opioid addiction in our country.

Reckitt Benckiser Group - $1.4 Billion

Reckitt Benckiser Group paid $1.4 billion to settle fraud claims related to the marketing of its opioid addiction treatment Suboxone. This was the largest recovery to date in connection with the opioid crisis. Ironically, Suboxone is supposed to help treat addiction, but Reckitt Benckiser’s alleged scheme may have had the opposite effect.

In its announcement of this massive settlement, the Department of Justice stated, “[Reckitt Benckiser Group’s subsidiary] Indivior. . . promoted the film version of Suboxone (Suboxone Film) to physicians, pharmacists, Medicaid administrators, and others across the country as less-divertible and less-abusable and safer. . . than other buprenorphine drugs, even though such claims have never been established. . .”

While pretending to market a drug to help opioid addicts, prosecutors said, the company actively worked to “connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in a careless and clinically unwarranted manner.”

Insys Therapeutics - $195 Million

Insys Therapeutics, an opioid maker, agreed to pay $195 million to resolve allegations that it offered illegal kickbacks to doctors to prescribe its highly addictive drug Subsys. Frequent prescribers of the drug received exorbitant speaking fees for sham events, expensive dinners, and lavish entertainment. Insys also offered jobs to some of the doctors’ relatives to incentivize more prescriptions. 

Insys is a medication used to treat severe pain in cancer patients. The physicians who participated in the alleged scheme, however, prescribed the drug to patients without a cancer diagnosis. 

Avanir Pharmaceuticals - $95 Million

Avanir Pharmaceuticals paid over $95 million to settle a lawsuit over anti-kickback violations and off-label marketing. According to the DOJ, Avanir offered kickbacks and promoted its drug Nuedexta for unapproved uses to induce long-term care facilities to prescribe it to patients with dementia (an unapproved use), thus securing millions of dollars in inappropriate Medicare reimbursements.  

Actelion Pharmaceuticals US, Amgen, Astellas Pharma US, Alexion Pharmaceuticals, 

Jazz Pharmaceuticals, Lundbeck, US Worldmeds – $624 Million 

Actelion, Amgen, Astellas, Alexion, Jazz, Lundbeck, and US Worldmeds paid a combined total of $624 million to resolve allegations that they paid patients’ copays illegally to boost sales of their drugs, using sham ‘foundations’ created solely for that purpose. While legitimate foundations that aid patients with copays exist, it is illegal for drugmakers to subsidize copays for their own drugs. 

Inform Diagnostics - $63.5 Million

Inform Diagnostics, formerly Miraca Life Sciences, paid $63.5 million to resolve a lawsuit over anti-kickback violations. The pathology laboratory company allegedly paid kickbacks to physicians in exchange for patient referrals. The illegal kickbacks were offered in the form of subsidies and discounts for technology and services. 

Greenway Health - $57 Million

Greenaway, an Electronic Health Records vendor, paid $57 million to resolve claims that it illegally compensated client providers for recommending their products, while also misrepresenting their capabilities to prospective buyers. 

According to the DOJ, “Greenway falsely obtained 2014 Edition certification for its [EHR] product Prime Suite when it concealed from its certifying entity that Prime Suite did not fully comply with the requirements for certification. Among other things, Greenway’s product did not incorporate the standardized clinical terminology necessary to ensure the reciprocal flow of information concerning patients and the accuracy of electronic prescriptions. Greenway accomplished its deception by modifying its test-run software to deceive the company hired to certify Prime Suite into believing that it could use the requisite clinical vocabulary.”

The government further alleged that Greenway “violated the Anti-Kickback Statute by paying money and incentives to its client providers to recommend Prime Suite to prospective new customers.”

Encompass Health Corporation - $48 Million

Encompass Health Corporation, formerly HealthSouth, paid $48 million to resolve allegations that some of its Inpatient Rehabilitation Facilities provided false information to Medicare to maintain their status as inpatient rehabilitation services providers and to boost Medicare reimbursements. Additionally, the company allegedly billed Medicare for medically unnecessary services.

Call for Healthcare Whistleblowers

If you are a healthcare insider or have become aware of rule violations in the pharmaceutical industry, don’t hesitate to contact us. It is illegal to promote drugs for off-label uses and to overbill Medicare, Medicaid, and other taxpayer-funded programs. 

If you have information about any fraudulent practice or drugmaker that led to FCA violations, call us today at 714-907-0697 for a confidential consultation. 

We will ensure that your identity is kept confidential throughout the process. Under the FCA, if your employer has fired you in retaliation, you can also sue them for compensation.   

Whistleblowers are essential for making the pharma industry more transparent and more ethical. At Hochfelsen & Kani, we have built teams of seasoned investigators, attorneys, and scientists who can help you hold fraudsters accountable.

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David Kani

David Kani is a Southern California based trial lawyer with a focus on class actions and whistleblower (False Claims Act, SEC and others) cases.

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