False Claims Act Settlements and Judgments Exceed $2.68B in 2023, New Report Show

Settlements and judgments under the False Claims Act exceeded $2.68 billion in the fiscal year ending Sept. 30, 2023, according to the Attorney General’s office.

The False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from or knowingly fail to pay money owed to the United States.

In fiscal year 2023, healthcare fraud remained a leading source of False Claims Act settlements and judgments. These recoveries restore funds to federal programs such as Medicare, Medicaid, and TRICARE, the health care program for service members and their families.

Following are some of the bigger False Claims listed by the Attorney General’s office:

• The Cigna Group agreed to pay $172 million to resolve allegations that it knowingly submitted and failed to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees to increase its payments from Medicare.
• Martin’s Point Health Care Inc. agreed to pay $22.5 million to resolve allegations that it knowingly submitted inaccurate diagnosis codes for its Medicare Advantage Plan enrollees that were not supported by the patients’ medical records to increase reimbursements from Medicare.
• Cornerstone Hospital Medical Center and related entities agreed to pay $21.6 million to resolve allegations that the former long-term acute care facility knowingly submitted claims for services performed by unlicensed and unauthorized students, and services that were not provided or effectively worthless.
• Smart Pharmacy Inc., SP2 LLC, and Gregory Balotin agreed to pay at least $7.4 million to resolve allegations that they unnecessarily added the antipsychotic drug aripiprazole to topical compounded pain creams to boost federal reimbursement for the compounded creams and waived patient copayments.
• Saratoga Center for Rehabilitation and Skilled Nursing Care agreed to pay $7.1 million to resolve allegations that Saratoga Center delivered worthless services to residents, resulting in medication errors, unnecessary falls, and the development of pressure ulcers, and that the facility’s physical conditions deteriorated to such a degree that the facility did not consistently maintain hot water, have an adequate linen inventory, or dispose of solid waste.
• Cardiac Imaging Inc. and its founder, owner, and CEO Sam Kancherlapalli, agreed to pay $85.5 million to resolve allegations that, with Kancherlapalli’s oversight and approval, Cardiac Imaging paid kickbacks to cardiologists in the form of above-fair market value supervision fees, to induce those doctors to refer their patients to Cardiac Imaging for PET scans.
• Carter Healthcare LLC and its President Stanley Carter and Chief Operations Officer Bradley Carter agreed to pay $22.9 million to resolve allegations that Carter Healthcare improperly paid renumeration to physicians under the guise of medical directorships to induce referrals of home health patients.
• Modernizing Medicine Inc. agreed to pay $45.4 million to resolve allegations that it improperly solicited and received kickbacks from a lab company in exchange for recommending and arranging for ModMed’s users to utilize the lab company’s pathology lab services, conspired with the lab company to improperly donate ModMed’s EHR technology to health care providers, and paid kickbacks to its customers and other influential sources to recommend ModMed’s technology and refer potential customers to ModMed.
• NextGen Healthcare Inc. agreed to pay $31.2 million to resolve allegations that it misrepresented the capabilities of certain versions of its EHR software by using an auxiliary product that was designed only to meet government certification criteria and otherwise was lacking in critical functionality.
• Peggy Borgfeld agreed to pay $325,000 and be excluded from federal healthcare programs for five years to resolve allegations that she falsely certified to Medicare that certain laboratory testing claims complied with the Anti-Kickback Statute.
• Chad Shelton, Dr. Michael Boedefeld, and their medical practice agreed to pay $396,360 to settle allegations of receiving MSO kickbacks in return for their laboratory referrals.
• CenCal Health, a county-organized health system, and seven providers in the system, two subsidiaries of Tenet Healthcare Corporation, agreed to pay a combined total of $95.5 million to resolve allegations that they made or received payments that were not for “allowed medical expenses” under CenCal’s contract with the state, were pre-determined amounts that did not reflect fair market value, were duplicative of services already required to be rendered, and were unlawful gifts of public funds in violation of the state constitution.
• BioTelemetry Inc. and its subsidiary CardioNet LLC, agreed to pay nearly $45 million to resolve allegations that they submitted claims for heart monitoring tests that were evaluated, in part, outside the United States, in violation of federal law.
• Lincare Holdings Inc. agreed to pay $29.0 million to resolve allegations that it fraudulently billed Medicare Advantage plans and Medicare Part B for oxygen equipment rental payments.
• Advanced Bionics LLC, agreed to pay more than $11.0 million to resolve allegations that it misled federal health care programs regarding the radio-frequency (RF) emissions generated by some of its cochlear implant processors, which can potentially interfere with other devices that use the same RF spectrum, such as telephones, alarm and security systems, televisions, and radios.
• Booz Allen Hamilton Holding Corporation paid $377 million to resolve allegations that it improperly billed its government contracts for costs incurred in its non-governmental commercial and international contracts.
• L3 Technologies Inc. agreed to pay $21.8 million to resolve allegations that in contract proposals for equipment provided to the military, L3 included the cost of certain items, such as nuts and bolts, twice.
• The Boeing Co. agreed to pay $8.1 million to resolve allegations that it submitted false claims and made false statements in connection with U.S. Navy contracts to manufacture the V-22 Osprey, a military aircraft.
• Victory Automotive Group Inc. agreed to pay more than $9 million to resolve allegations that it provided false information in support of a PPP loan forgiveness application.
• Coyne Public Relations LLC paid $2.24 million to resolve allegations that it received a PPP loan even though it was ineligible for the loan because it was a required registrant under the Foreign Agent Registration Act.
• John Seasholtz and four agricultural companies he owns agreed to pay more than $600,000 to resolve allegations that they violated the False Claims Act by improperly inflating the employee headcount on the companies’ PPP loan applications by impermissibly including non-employee contract workers who were, in fact, employed by other, unrelated entities.
• Jelly Bean Communications Design LLC and its manager paid $293,771 to resolve allegations that they failed to secure personal information on a federally funded Florida children’s health insurance website, which Jelly Bean created, hosted, and maintained.
• The Justice Department also settled for over $4 million with Verizon Business Network Services LLC, which disclosed and remediated cybersecurity failures on contracts to provide trusted internet connections to the General Services Administration.
• GCI Communications Corp. agreed to pay $40 million to resolve allegations that it inflated its prices and violated Federal Communications Commission competitive bidding regulations in connection with GCI’s participation in the FCC’s Rural Health Care Program.
• International Vitamins Corporation agreed to pay $22.8 million for defrauding the United States by misclassifying more than 30 of its vitamin and nutritional supplements under the Harmonized Tariff Schedule in order to avoid paying customs duties.