- This summer, the federal government announced it was seeking up to $3.3 billion from pharmaceutical company Novartis for allegedly paying kickbacks to pharmacies.
- Eleven states are now using their own false claims laws to also go after Novartis for claims paid by their Medicaid programs.
- As more states begin to shore up their false claims laws, Novartis is not the only company likely to be targeted.
The Novartis case is just one example of how states are using their own false claims laws to recover money for questionable Medicaid claims made not only by drugmakers, but also by suppliers and providers.
According to Modern Healthcare, one of the reasons why states are jumping on the false claims bandwagon is the federal Deficit Reduction Act of 2005, which offers states financial incentives for establishing their own false claims laws. Under the Deficit Reduction Act, if a state's law meets certain requirements, the state not only gets its cut of the recovered Medicaid money; it also gets part of the federal government's share.
John Kelly, a former assistant chief for healthcare fraud at the US Justice Department, told Modern Healthcare this trend is likely to continue and cases such as Novartis are going to become more common. “It's not going to get any easier out there for companies subject to this,” he said.
It might be a good time for those who participate in state Medicaid programs to review their state false claims law and begin auditing their records.