Healthcare fraud has long plagued the medical industry. Last year proved no different, with a steady stream of doctors, suppliers, and medical providers charged almost weekly with defrauding patients and taxpayers.
According to a review by law firm Bass, Berry, & Sims PLC, the federal government recovered nearly $3.5 billion in healthcare fraud cases last year, up from $1.9 billion in 2013.
Luckily, due to case investigations led by local and federal governments, the vast majority of healthcare fraud criminals are being brought to justice. Read on to learn more about the top healthcare fraud cases of 2015.
Operation Spinal Cap Fraud Case: $600 Million
During the course of this 10-year scheme, doctors and surgeons at Pacific Hospital in Long Beach, C.A., defrauded $600 million from the healthcare system by illegally referring thousands of patients for unnecessary spinal surgeries.
According to California Insurance Commissioner Dave Jones, injured workers were “treated like livestock” by doctors who accepted tens of thousands in kickbacks in exchange for spinal surgery referrals.
Some of the patients lived hundreds of miles away from Pacific Hospital, much closer to other qualified medical facilities, yet still journeyed to Long Beach only to be referred for the bogus operations.
As of today, the investigation remains ongoing, with the scope of the fraud widening each day as the FBI and IRS uncover more and more doctors, chiropractors, and medical professionals who were involved. If you’d like to learn more about this case, you can read about it here.
Millennium Health Fraud Case: $256 Million
Healthcare fraud isn’t always limited to hospitals. Millennium Health, one of the largest drug testing facilities in the nation, was charged in October 2015 for bribing physicians to recommend medically unnecessary urine testing to patients who had no medical need for them.
Millennium provided free urine drug test cups to physicians on the condition that they would refer patients back to itself. The excessive, unnecessary referrals generated hundreds of thousands dollars in revenue for the company.
Ultimately, Millennium Health agreed to pay a $256 million settlement and enter a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services which called for the termination of the majority of its board members.
DaVita Healthcare Fraud Case: $450 Million
DaVita Healthcare Partners, based in Denver, C.O., was forced to pay a $450 million settlement for taking advantage of dosing limitations for the drugs Zemplar and Venoflar.
According to the Department of Justice, the company created “dosing grids” designed to ensure that the company maximized the amount of drugs it wasted. Then, it billed Medicare for the price of the doses and the waste.
DaVita Healthcare was sued for increasing its profits through practices which improperly drained the government’s resources. The two whistleblowers who exposed the scheme received a large share of the settlement.
243 Doctors and Nurses Arrested for Medicare Fraud: $700 Million
What some attorneys have called the largest criminal healthcare fraud takedown in the history of the Department of Justice took place just last year. Over 243 people, including 46 doctors and nurses, were arrested for running up more than $700 million in false Medicare billings.
Offenders were charged with fraud, money-laundering, aggravated identity theft, and providing kickbacks. Others were charged with overstating treatment times and billing Medicare millions of dollars for equipment that was not necessary or requested.
One California doctor was accused of defrauding nearly $23 million by recommending over 1,000 power wheelchairs and home health aides that were not medically necessary and often not provided to patients.
In another case, administrators in a mental health facility billed close to $64 million for purported mental health treatments that were never delivered. Medicare paid approximately half the claimed amounts in both cases.
The arrests took place in 17 cities, and involved more than 900 law enforcement officials. Offenders were arrested in Miami, Houston, Dallas, Los Angeles, Detroit, Tampa, Brooklyn, and New Orleans.
Novartis Healthcare Fraud Case: $370 Million
Switzerland-based pharmaceutical company Novartis agreed to pay $370 million last year to settle claims that it gave kickbacks to pharmacies in exchange for recommending two of its drugs.
According to the DOJ, the company gave patient referrals and rebates to select pharmacies in exchange for recommending refills for Exjade, an iron chelation drug. To increase sales, Novartis gave incentives to the pharmacies for emphasizing Exjade’s benefits, while concealing the drug’s potentially life-threatening side effects.
For example, the pharmacies were encouraged to tell patients that not taking the drug would cause damage to their organs or lead to infertility—while in reality, it had potentially life-threatening side-effects such as liver and kidney failure.
Novartis also allocated more patient referrals and gave higher rebates to pharmacies that obtained higher refill rates.
U.S. Attorney Preet Bahara accused the company of turning pharmacies that should have been disinterested healthcare providers into a biased sales-force for its drugs. Of the $370 million it owed, Novartis paid $286 million to the government and $83 million to settling states. If you would like to learn more about this case, you can read more about it here.
Healthcare Fraud Case Management Software
Clearly, 2015 was an ugly year for healthcare fraud, and so far, 2016 promises to be no different. Healthcare fraud and medical fraud are costing Americans billions of dollars each year as corrupt doctors, nurses, and practitioners seek to take advantage of changing healthcare policies.
Luckily, the world’s largest healthcare and government agencies are cracking down on healthcare fraud.
To do it, they’re using some of the most advanced case management software in the world, such as Scout’s Medical Case Management Software. Case management software helps keep healthcare cases organized, managed, and recorded so that case investigators and auditors can communicate efficiently.
To learn more about the benefits or our medical case management software or request a free demo, click here.