HHS Office of Inspector General on Thursday reported it charged 400 defendants for false billing schemes totaling $1.3 billion this month in what it called the "largest healthcare fraud takedown in history."
Nearly 300 health professionals were served exclusion notices for conduct related to opioid diversion and abuse, including 162 nurses and 57 doctors.
In one prescription drug-related case this week, Mallinckrodt LLC, which is one of the largest manufacturers of generic oxycodone, agreed to pay $35 million to settle a case. The drug manufacturer allegedly didn't report suspicious orders of pharmaceutical drugs. The case also included recordkeeping violations.
In a statement, the HHS Office of the Inspector General said the takedown sends “a strong signal that theft from these taxpayer-funded programs will not be tolerated.”
A few particular schemes HHS highlighted include five physicians in Michigan who participated in deals involving illegal kickbacks and billing for medically unnecessary joint injections, drug screenings and home health services. Another was a doctor in Texas who fraudulently billed Medicare and received $1.2 million in reimbursement while also overprescribing narcotics.
HHS was working with the Department of Justice (DOJ) who continues to turn up the heat on the healthcare industry. The industry investigations didn't start with the new administration, though. Last year, more than 300 people were charged in a $900 million Medicare fraud sweep.
In recent months, AMI Monitoring agreed to resolve allegations that they violated the False Claims Act while the DOJ got involved in two high-profile False Claims Act cases involving UnitedHealth Group and continues to investigate other payers for alleged Medicare Advantage overpayments. Also recently, Freedom Health agreed to settle a False Claims Act case. DOJ has also requested that a district court issue a permanent injunction against an Alabama pharmacy to prevent it from distributing adulterated and misbranded and unapproved drugs.
The DOJ remains focused on healthcare, but has added tackling cases involving opioids. Opioid abuse has become a national problem. A recent Agency for Healthcare Research and Quality report said inpatient and emergency room visits for opioid-related issues increased substantially from 2005 to 2014. ER opioid visits increased nearly 100% and inpatient visits increased by 64%.
Coupled with the problem of opioid addiction is abuse and fraud involving prescriptions that includes pill mills and doctor shopping. So, it's understandable the DOJ is looking to focus attention in that area.
While the DOJ is reportedly looking to focus more on opioids, President Donald Trump’s proposed budget includes a 95% cut to the Office of National Drug Policy. It would also eliminate Drug-Free Communities Support Program. AHRQ, which released the recent report on opioid-related issues for hospitals, would also get cut in the president’s budget.
The DOJ said Mallinckrodt supplied distributors, which then supplied pharmacies and pain clinics “an increasingly excessive quantity of oxycodone pills without notifying DEA of these suspicious orders.”
The Mallinckrodt cases goes beyond a large settlement. The company also agreed to a parallel agreement with the DEA that Mallinckrodt will “analyze data it collects on orders from customers down the supply chain to identify suspicious sales.” The Justice Department said this will require the company to know their “customer’s customer,” which will “protect potentially dangerous pharmaceuticals from getting into the wrong hands.”
The settlement also creates procedures that the company must take to “ensure the accuracy of batch records and protect loss of raw product in the manufacturing process.”
“By entering into these agreements, elements of which Mallinckrodt is already implementing, the company is becoming part of the solution to this public health epidemic,” said the DOJ.