The Justice Department on Wednesday unveiled its largest health care settlement in history against a national chain of kidney dialysis centers. First tipped off by private citizens who blew the whistle on allegations of fraudulent Medicare claims, the federal government launched an intense five-year investigation which has resulted in a $486 million settlement including criminal, civil, restitution and other penalties against a German-owned medical company for bilking government health programs.
According to the Justice Department, the agreement with Massachusetts-based National Medical Care, Inc., a kidney dialysis subsidiary of Fresenius Medical Care North America, includes allegations that company officials charged Medicare for hundreds of thousands of needless medical tests and lab procedures for patients suffering from chronic kidney disease and paid illegal kick-backs to obtain referrals of lab business.
The record-breaking $385 million civil settlement resolves six lawsuits brought by seven private citizens under the whistleblower provisions of the False Claims Act.
"The False Claims Act is the government's most effective tool against fraud," said Grassley. "Today's announcement proves the merits of the law beyond any reasonable doubt. I can tally 486 million reasons why unscrupulous contractors would continue to challenge the False Claims Act. Yet, I'm sure 39 million Medicare beneficiaries and every American taxpayer would agree with me. We must not let up in our effort to shut-down the bad actors, to safeguard the financial integrity of the Medicare trust fund and to protect the hard-earned dollars that every worker in America sends to Washington."
Targeting defense contractor fraud in the Pentagon during the mid-1980s, Grassley was the principal Senate author of qui tam amendments adopted in 1986 to update the Civil War-era False Claims Act. The law allows private citizens who know about fraud to sue companies on the government's behalf and entitles the government to recover three times its losses.
In the last 13 years, the Grassley whistleblower provisions of the False Claims Act have recovered more than $3 billion in tax dollars that otherwise would have been lost to fraud.
During the 1990s, the qui tam provisions emerged as an effective tool against health care fraud. Iowa's senior senator has served as a watchdog in Congress to ferret out waste, fraud and abuse from government programs and will continue his watch to keep the False Claims Act intact and on the books.
As chairman of the Special Committee on Aging, Grassley also is working on a separate investigation to determine the quality of care provided by Medicare's End Stage Renal Disease program. The Health Care Financing Administration, which administers Medicare, is responsible for setting standards for certifying dialysis facilities and measuring their performance. Grassley has forwarded to government investigators specific allegations of inadequate dialysis care to Medicare beneficiaries which may lead to patient endangerment. The committee is planning a congressional hearing this summer to examine the issue more thoroughly. The program provides life-sustaining kidney dialysis treatments to approximately 250,000 Americans each year.
"It takes relentless vigilance to keep ahead of the curve on unscrupulous health care providers," said Grassley. "Whether it's contractors who defraud Medicare or the bad apples who provide substandard care, I'm working to help ensure the nation's disabled and elderly can depend on government health programs."