"There's no doubt that the False Claims Act is the government's most effective tool against health care fraud. Today, it has recovered hard-earned tax dollars from an unscrupulous Medicare contractor. And every dollar recovered from the bad actors is a dollar that can be used to provide health insurance for older Americans. It is good to see the Justice Department acting swiftly and surely against health care fraud and helping to keep Medicare solvent for the millions who depend on it," Grassley said.
Grassley's comments were made as the Department of Justice (DoJ) announced the largest settlement ever reached with a Medicare contractor pursuant to an investigation conducted under the False Claims Act.
One of the nation's largest Medicare carriers plead guilty today to eight felony counts and agreed to pay more than $144 million, after admitting it concealed evidence of poor performance in processing Medicare claims for the federal government to obtain bonus payments. The criminal plea includes $4 million in criminal fines to the government and $140 million in a civil settlement under the False Claims Act.
Grassley was the principal author of amendments adopted in 1986 to update the Civil War- era False Claims Act. The law allows anyone who knows about fraud to sue companies on the government's behalf and entitles the government to recover three times its losses.
During the last 12 years, the False Claims Act has recovered more than $4 billion and saved hundreds of billions more with its deterrent effect. The whistleblower provisions alone have recovered $1.8 billion in tax dollars that otherwise would have been lost to fraud. The original complaint in the case settled today was brought forward by a whistleblower who was employed by the contractor.
Grassley said today's case "demonstrates the tremendous value of the False Claims Act and makes all the more amazing continued efforts in the House of Representatives and by lobbyists for
the American Hospital Association to gut the anti-fraud law." Grassley urged the sponsor of the House bill, Rep. Bill McCollum of Florida, and others to stop this campaign and help him "ensure the integrity of the Medicare trust fund."
The Medicare contractor that agreed to settle today was Health Care Services, Inc., which processes Medicare Part B claims for providers in Illinois and Michigan.
According to the Justice Department, the company was found guilty of conspiracy to obstruct a federal audit and obstruction of a federal audit. It also admitted to six instances of false statements based on the actions of many of its managers and supervisors who administered contracts with the Health Care Financing Administration (HCFA). Government officials said today that the crimes involved manipulating work samples and falsifying reports used by HCFA, as well as concealing poor performance and falsely claiming superior performance.
Originally sought to combat fraud by defense contractors, the False Claims Act has in recent years been used to effectively fight health care fraud. In 1997, SmithKline Beecham Clinical Laboratories Inc. agreed to pay the government $325 million for offering illegal kickbacks and filing false claims for lab tests that were not medically necessary, were not ordered by a doctor or were not performed. That agreement stemmed from three lawsuits filed by four private citizens under the False Claims Act.
Grassley successfully advanced the 1986 update of the False Claims Act from his position as chairman of the Senate Judiciary Subcommittee on Administrative Oversight and the Courts. Rep. Howard Berman of California sponsored the 1986 amendments in the House of Representatives.