DOJ recently reached settlements in connection with three long running enforcement efforts, amassing more than $1 billion in settlement funds. These settlements reflect the continued expansion of aggressive government enforcement in the healthcare industry. Since January 2009, DOJ claims recovery of more than $16.2 billion in healthcare-related FCA cases alone.

Swiss pharmaceutical company Novartis AG agreed to pay $390 million to settle allegations that it provided unlawful rebates to specialty pharmacies to boost prescription refills for Novartis products. While Novartis did not admit that these rebates constituted illegal kickbacks, it did acknowledge providing rebates to three specialty pharmacies to incentivize an increase of prescription refills. This settlement comes at the conclusion of Novartis’ five-year CIA resulting from a settlement with DOJ in 2010. As part of its latest settlement, Novartis has agreed to extend its CIA for an additional five year period. Additionally, Novartis has agreed to amend its CIA to include obligations covering the company’s interactions with specialty pharmacies and to provide an annual report to DOJ detailing Novartis’ compliance with the CIA.

Millennium Health LLC, one of the nation’s largest drug-testing laboratories, agreed to pay $256 million to resolve allegations that it billed for medically unnecessary urine testing and for providing free test cups to physicians in exchange for referrals. DOJ characterized Millennium’s failure to tailor tests to individual patients’ needs as a problematic “standing order” that caused unnecessary testing. As part of the settlement, Millennium agreed to enter into a five-year CIA, but did not admit any liability. Per the CIA, Millennium has agreed to adopt significant changes to its board of directors and its new board’s compliance efforts will be monitored closely by OIG.

Finally, DOJ negotiated settlements that amassed $250 million dollars from 457 hospitals located in 43 states based on allegations of improper billing for implantable cardioverter defibrillators. DOJ entered into 70 settlement agreements resolving allegations that the hospitals billed Medicare for implanting ICDs in violation of a National Coverage Determination. Specifically, each of the 457 hospitals was accused of implanting ICDs within designated “waiting periods” that prohibit implants in patients within 40 days of a heart attack or within 90 days of a heart bypass or angioplasty procedure. The settlement resolves claims from 2003 to 2010.

In our forthcoming Healthcare Fraud Year in Review, we will provide an in-depth discussion of key FCA settlements and an overview of all FCA settlements reached during 2015.