Healthcare Fraud Recoveries on the Rise

It’s a sad sign of the times when the lion’s share of the schemes intent on defrauding the federal government are in the healthcare arena. But as Principal Deputy Assistant Attorney General Brian M. Boynton underscored during the 2024 Federal Bar Association’s Qui Tam Conference, healthcare fraud remains among the office’s top three priorities.

“Since the early 2000s,” Boynton said, “healthcare has consistently been the largest area of enforcement and recovery under the False Claims Act.”

More than  $1.67 billion of the roughly $2.9 billion in FCA recoveries in 2024 were related to healthcare fraud schemes.

The False Claims Act, or FCA, is a federal statute first enacted in 1863, and it remains the bulwark against perpetrators of fraud against the U.S. government. Key to the FCA’s effectiveness is the law’s “qui tam” provision empowering whistleblowers to come forward to report abuse and share up to 30 percent of the government’s monetary recovery.

According to the American Journal of Medicine, “In the context of healthcare, the FCA is squarely focused on the illegal submission of claims for payment to Medicaid, Medicare, or TRICARE that one knows, or should know, are false or fraudulent.”

Stealing from taxpayers is wrong. Did you witness fraud committed against the government? Speak confidentially with our experienced attorneys.

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Three Example Focus Areas

Healthcare fraud schemes can take many different forms, including:

• Kickbacks to physicians and other providers for referrals. The FCA provides a vehicle for enforcing the Anti-Kickback Statute and the Stark Law, both designed to prevent efforts to buy referrals.
• Medical device fraud. Marketing misbranded medical devices is actionable under the FCA and may also result in criminal charges.
• Medicaid fraud. Some states allow whistleblowers to pursue qui tam actions to recover taxpayer funds lost to Medicaid fraud, including fraud on the part of Medicaid providers (and their owners), as well as fraud on the part of the state’s Medicaid contractors.

Private Equity’s Role in Healthcare Fraud

Private equity (PE) investment plays a growing and significant role in healthcare in the United States. PE firms closed an estimated 863 healthcare-related deals in 2022 and 1,013 transactions in 2021, according to the National Institute for Healthcare Management.

Concerns about PE investment in healthcare include their opaque structures and lack of regulation.

“More than 90 percent of PE-related takeovers or investments are not reviewed, as there is little regulation of PE investment,” reports the NIHCM in its Expert Voices bulletin. “Private equity firms prioritize short-term profits, typically moving on from their healthcare investments within three to seven years.”

And with respect to healthcare fraud, the influence of private equity owners on the behavior of medical providers is a growing concern for the Justice Department and whistleblowers alike. “These entities may influence patient care by providing express direction for how a provider should conduct their business, or more indirectly by providing revenue targets or other indirect benchmarks intended to prioritize reimbursement,” Boynton said in his Federal Bar Association remarks. “In those instances, the department will not hesitate to pursue them for their roles in defrauding the government.”

How Do We Fight Fraud Against the Government? 

Seek justice on behalf of taxpayers with the help of our experienced attorneys. Our Dallas, Texas, whistleblower team has battled corporate giants for 20 years, aggressively fighting to hold corporations, individuals, and other entities accountable for fraud committed against the government. If you believe you have a whistleblower case, we can help.