Health care now prime target of federal False Claims Act

More than three-quarters of fraud recoveries in 2003 came from the health sector.

By Markian Hawryluk, AMNews staff. May 10, 2004.

Washington -- A series of major settlements against health care companies has boosted the government's fraud recovery rate, and kudos are going to whistle-blower provisions in federal law.

According to the latest figures from the Justice Dept., federal enforcement officials recouped $2.1 billion under the False Claims Act in 2003. Of that total, $1.7 billion came from health care companies and practitioners, up from $500 million only four years earlier.

Four of the 10 largest settlements in the history of the act came in 2003, and all involved health care companies. Hospital chain HCA settled a case for $631 million last year, while pharmaceutical firms Abbott Labs, AstraZeneca and Bayer Corp. each had settlements of $250 million to $400 million.

The settlements are attributed in large part to False Claims Act amendments by Sen. Charles Grassley (R, Iowa) in 1986 that strengthened the qui tam, or whistle-blower, provisions by offering private citizens who report fraudulent claims a share of the recovered funds.

"Without this important legislation strengthening the act and, in particular, the qui tam provisions that give everyone who comes in contact with a federally funded program a stake in reporting fraud, such recoveries would not have been possible," said Peter Keisler, assistant attorney general in the Justice Dept.'s civil division.

Of the $2.1 billion in False Claims Act recoveries in 2003, $1.48 billion came from suits initiated by whistle-blowers.