CHICAGO – Illinois claimed its share of a $784.6 million settlement reached with drug companies Wyeth and Pfizer earlier this year, part of billions being recovered by state and local government cracking down on purported health care fraud.
What is less clear is how much of such alleged fraud is actually being uncovered in Illinois and nationwide
In May, attorneys general in 35 states, including Illinois, along with the District of Columbia, announced their shares of the large settlement. The settlement resolved allegations Wyeth didn't provide the same discounts to the government that it provides to private purchasers, despite being required to do so by Medicaid.
“This significant settlement illustrates that the government will not permit drug companies to dodge their obligations to the Medicaid program or create elaborate pricing schemes to deceive Medicaid into paying more than it should for drugs,” Carmen Milagros Ortiz, the U.S. Attorney for the District of Massachusetts, was quoted in a press release. “This settlement, after years of hard-fought litigation, shows our commitment to ensuring that healthcare businesses do not take advantage of the federal health insurance programs which serve those who need assistance most.”
The settlement also resolved allegations from two whistleblowers, Lauren Kieff and William St. John LaCorte, who sued the drug companies in United States ex rel. Kieff and LaCorte v. Wyeth and Pfizer in Massachusetts federal court under the False Claims Act. The False Claims Act allows private parties, such as the whistleblowers, to sue on the government's behalf for false claims on government funds and to receive a share of any settlement or other recovery.
Kieff and LaCorte's allegations started in two separate cases filed in Massachusetts. The first case was filed in 2003 and the other was filed in 2006. The two cases later were consolidated and plaintiff states, including Illinois, intervened in 2009.
Under terms of the settlement, Wyeth agreed to pay $413.3 million to the federal government and $371.4 million to state Medicaid programs.
Illinois' share was more than $4.8 million, according to a press release issued by Illinois Attorney General Lisa Madigan. That was Illinois’ allotted share based on Illinois’ utilization percentage in relation to the total Medicaid settlement amount, a spokeswoman frlom Madigan's office who refused to be quoted on the record said in an email to the Cook County Record. The federal Medicaid and relator shares were also deducted to reach this final figure, the spokeswoman said.
The settlement was one of the latest wins for the states and federal government since the latter began its crackdown on health care fraud in 2009. The effort since has led to charges against 2,500 defendants and the recovery of approximately $1.9 billion in fraudulent payments in 2015 alone, according to a the U.S. Justice and Health and Human Services departments report.
That amount, huge as it is, is only a small percentage of the almost $89 billion in improper Medicare and Medicaid payments in 2015, most of it fraudulent, according to an Office of Management and Budget estimate.
While that seems discouraging, it hasn't stopped the federal government from passing additional health care fraud legislation and enforcing existing laws. The Affordable Care Act, signed into law in March 2003, set into motion a broad range of provisions to combat health care fraud, waste and abuse. These include tough new rules and sentences for criminals, an enhanced screening for providers and suppliers, and spending $350 million over 10 years to boost the government anti-fraud enforcement efforts. Combined with existing anti-fraud legislation, such as the False Claims Act, such provisions has helped state and federal government agencies root out health care fraud, officials have said.
The U.S. Justice Department, for instance, recovered more than $3.5 Billion from False Claims Act Cases in fiscal 2015, the fourth consecutive year such recovered funds topped $3 billion.
In addition to efforts orchestrated by the federal government, the states also have been stepping up such health care fraud enforcement efforts. In Illinois, Gov. Bruce Rauner announced the formation of a state task force to root out fraud in Medicaid and some other Illinois state health care reimbursement programs.
In April, the Justice Department announced charges against a Chicago couple who allegedly used their health care business in a $45 million Medicare fraud, while also allegedly trying to force a housekeeper to work against her will, according to an indictment returned in federal court in Chicago.
"To ensure that taxpayer dollars go to the benefit recipients who need them rather than to a few dishonest individuals, it is vital that we all work together," Madigan saif in booklet issued by her office to combat health care fraud.