Department of Justice Recovers More Than $2.2 Billion in 2020

The Department of Justice (DOJ) closed its 2020 fiscal year by recovering more than $2.2 billion from fraud and false claims settlements and judgments.

The DOJ announced the amounts were for the past fiscal year ending September 30, 2020. Over $1.8 billion of the more than $2.2 billion “relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.”

During the past year, the DOJ made significant recoveries for kickback schemes. These schemes involved the “the willful solicitation or payment of illegal remuneration to induce the purchase of a good or service paid for by a federal health care program.”

Of note in the orthopedic industry was the DOJ’s settlement with the Oklahoma Center for Orthopaedic and Multi-Specialty Surgery and associated entities for more than $72 million. The settlement resolved allegations involving improper remuneration. For OTW’s coverage of this settlement, see “$72.3 Million Settles DOJ Vs Ortho Clinic Case.”

Another significant orthopedic case involves SpineFrontier, Inc., SpineFrontier CEO Kingsley Chin, and additional related entities. The government has alleged that the parties paid kickbacks to surgeons in the form of sham "consulting" fees to “induce use of SpineFrontier surgical devices.” In connection with the litigation, six orthopedic surgeons have agreed to pay over $3.25 million to resolve kickback allegations. For OTW’s continued coverage of the SpineFrontier kickback allegations, see “Surgeon Pays $1.75 Million To Settle Kickback Allegations” and “U.S. Attorney Sues SpineFrontier Over Alleged Kickback Scheme.”

Whistleblowers had a lucrative year with over half of the $2.2 billion in settlements and judgments coming from whistleblower (qui tam) lawsuits. The DOJ announced that from its 2020 recovery amount “over $1.6 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act.” If the government succeeds in a qui tam action, the whistleblower can receive a portion of the recovery. During fiscal year 2020, the DOJ paid $309 million to the individuals who filed whistleblower lawsuits.

The number of whistleblower lawsuits has increased over the years. In fiscal year 2020, whistleblowers filed 672 qui tam suits. For OTW’s 2020 coverage of actions involving whistleblowers and fraud allegations, see “Florida Orthopedic Surgeon Continues Litigation,” “Fort Worth Orthopedist Indicted for Healthcare Fraud,” “Former Life Spine Employees’ Suit Alleges Retaliatory Discharge,” “Orthopedic Surgeon Gives Whistleblowing a Shot,” and “Agnesian Healthcare Pays $10 Million To Settle Whistleblower Case.”