WHISTLEBLOWERS COLLECT BIG IN 2013 – ORTHOPEDICS TOP “STARK” JUDGMENT (Orthopedics This Week)
The year 2013 was another banner year for healthcare whistleblowers. The year also included the largest judgment in the history of the Stark Law with Tuomey Healthcare System, Inc. ordered to cough up $237 million.
According to the Department of Justice (DOJ), the government paid out more than $345 million to “courageous” individuals who exposed fraud and false claims by filing a qui tam complaint. The government recovered a total of $2.6 billion from those lawsuits.
It was the fourth straight year that DOJ recovered more than $2 billion in cases involving healthcare fraud.
Of the total $2.6 billion recovered, $1.8 billion was from alleged false claims for drugs and medical devices under federally insured health programs that, in addition to Medicare and Medicaid, include TRICARE, which provides benefits for military personnel and their families, veterans’ health care programs and the Federal Employees Health Benefits Program. The department recovered an additional $443 million for state Medicaid programs.
Orthopedics: Biggest Stark Judgment in History
The $237 million judgment against South Carolina-based Tuomey Healthcare System, Inc. came after a four-week trial. Tuomey’s appeal of the $237 million judgment is pending. If the judgment is affirmed on appeal, this will be the largest judgment in the history of the Stark Law.
The hospital system was ordered to pay up after a jury found that the hospital entered into agreements with part-time orthopedic surgeons working in the hospital’s outpatient surgery center. The government accused the hospital of hiring the surgeons with the intention they would refer patients from their practices to the center.
The department also recovered $26.3 million in a settlement with Steven J. Wasserman M.D., a dermatologist practicing in Florida, to resolve allegations that he entered into an illegal kickback arrangement with Tampa Pathology Laboratory that resulted in increased claims to Medicare. That settlement is one of the largest with an individual in the history of the False Claims Act.
Drugs: Off-Label Marketing
Many of the settlements involved allegations of off-label marketing of drugs. For example, Abbott Laboratories Inc. paid $1.5 billion to resolve allegations that it illegally promoted the drug Depakote to treat agitation and aggression in elderly dementia patients and schizophrenia when neither of these uses was approved as safe and effective by the FDA. The landmark settlement included $575 million in federal civil recoveries, $225 million in state civil recoveries and nearly $700 million in criminal fines and forfeitures.
In another drug case, Amgen Inc. paid $762 million, including $598.5 million in False Claims Act recoveries, to settle allegations that included its illegal promotion of Aranesp, a drug used to treat anemia, in doses not approved by the FDA and for off-label use to treat non-anemia-related conditions.
$1.98 Billion for Whistleblowers Since 2009
Whistleblower lawsuits were in the range of 300-400 per year from 2000 to 2009, when they began their climb from 433 lawsuits in fiscal year 2009 to 752 lawsuits in fiscal year 2013. Qui tam recoveries exceeded $2 billion for the first time in fiscal year 2010 and have continued to exceed that amount every year since. Qui tam recoveries this past fiscal year bring the department’s totals since January 2009 to $13.4 billion. During the same period, the department paid out $1.98 billion in whistleblower awards.