Top 10 Largest False Claims Act Cases (Top 10 Largest Fraud Cases): Whistleblowers Receive Over $50
Below is a list of the top 10 or largest False Claims Act cases in the United States. Under the federal False Claims Act, whistleblowers receive a reward of between 15% and 30% of what the government collects for reporting fraud committed against the government, such as fraud against the military, Medicare, or one of 20 federal agencies and programs. In each of these cases, the whistleblowers received rewards of over $50 million!
1. Tenet Heathcare: $900,000,000
In July 2006, Tenet Healthcare, a large chain of hospitals, paid $900 million to settle False Claims Act allegations that it committed fraud by manipulating of "outlier" payments to Medicare, paid kickbacks, upcoded DRG codes, and engaged in bill padding. The whistleblowers received rewards exceeding $150 million.
2. Eli Lilly: $800,000,000
In January 2009, Eli Lilly, a large pharmaceutical company, paid $800 million to settle allegations that it violated the False Claims Act and defrauded Medicare and Medicaid by "off label" marketing of a popular drug Zyprexa. The government alleged that Eli Lilly widely promoted the use of this drug to nursing homes patients to treat dementia, which is not an approved use by the FDA. The whistleblowers are eligible for up to 25% of the $800 million civil recovery or up to $200 million. The company also paid criminal fines of $615 million.
3. HCA The Healthcare Company: $731,400,000
In December 2000, after changing its name to "HCA The Healthcare Company" (formerly known as Columbia HCA), the largest for?profit hospital chain in the United States, settled its second False Claims Act case by paying $731,400,000 to resolve allegations of billing for lab tests that were not medically necessary or not ordered by physicians, upcoding, billing the government for advertising under the guise of "community education," and billing for non?reimbursable costs incurred in the purchase of home health agencies around the country. The whistleblowers received $150 million. The company also paid more than $100 million in criminal fines.
4. Merck: $671,000,000
In February 2008, Merck & Company (a pharmaceutical company) has paid $671 million to resolve False Claims Act allegations that it failed to pay proper "rebates" to Medicaid under the Best Price statute and that it paid kickbacks to doctors. Under the Medicaid best price statute or rebate program, a pharmaceutical company is required to give Medicaid the same discount it gives its best customers. The three drugs involved were Zocor, Vioxx, and Pepcid. The whistleblowers are eligible for over $115 million.
5. HCA: $641,000,000
In June 2003, HCA Inc. (formerly known as Columbia HCA The Healthcare Company) paid the United States $641 million to settle False Claims Act allegations that it paid kickbacks to physicians and included unallowable cost in its annual cost reports. Combined with the December 2000 settlement, the government has recovered $1.7 billion from HCA. In this case, the whistleblowers received over $115 million.
6. Serono: $567,000,000
In October of 2005, Serono paid $704 million to settle a False Claims Act case involving Serostim, a human growth hormone product used to fight AIDS?related wasting. The fraud allegations included paying kickbacks to doctors and off label marketing of the drug. The whistleblower received over $50 million.
7. TAP [Taketa?Abbott Pharmaceutical] Pharmaceutical Products Inc.: $559,483,560
In October 2001, TAP Pharmaceutical Products Inc. paid $559 million to resolve False Claims Act allegations that it illegally gave kickbacks to doctors. It was alleged to have provided free samples with the understanding that doctors would bill Medicare and Medicaid $500 per dose. The whistleblower received $95 million.
8. Bristol?Myers Squibb Company (BMS): $515,000,000
In September 2007, Bristol?Myers Squibb (BMS) and its wholly owned subsidiary, Apothecon, Inc., paid over $515 million to settle False Claims Act allegations that it paid kickbacks, promoted off label use drugs, and violated Medicaid's best price statute. The whistleblowers received $50 million.
9. Cephalon: $425,000,000
In November 2007, Cephalon, a biotech company, paid $425 million to settle False Claims Act allegations that it engaged in "off label" marketing of three FDA approve drugs: Actiq (a narcotic lollipop designed for pain control in cancer patients), Gabitril (an epilepsy medication), and Provigil (a narcolepsy medication). The company also paid a criminal fine of $50 million. The whistleblowers received rewards exceeding $55 million.
10. Abbott Labs: $400,000,000
In July 2003, Abbott Laboratories, Inc. paid $400 million to resolve False Claims Act allegations relating to the sale of "enteral" products, which pump food into the stomach of patients who cannot digest meals. The whistleblower received approximately $70 million.
Footnotes:
Outlier payments are an increased fee paid to hospitals over and above the normal DRG fee when they can show that their procedures are particularly difficult or complex.
Off label marketing occurs when a pharmaceutical company obtains FDA approval for a specific use of a new drug, but then asks doctors to prescribe it for other uses which it did not seek or obtain FDA approval. It is illegal for pharmaceutical companies to suggest to treating physician that they prescribe drugs for uses other than that which the FDA has approved.
The government has paid over $3 billion in rewards to whistleblowers for reporting fraud.
1. Tenet Heathcare: $900,000,000
In July 2006, Tenet Healthcare, a large chain of hospitals, paid $900 million to settle False Claims Act allegations that it committed fraud by manipulating of "outlier" payments to Medicare, paid kickbacks, upcoded DRG codes, and engaged in bill padding. The whistleblowers received rewards exceeding $150 million.
2. Eli Lilly: $800,000,000
In January 2009, Eli Lilly, a large pharmaceutical company, paid $800 million to settle allegations that it violated the False Claims Act and defrauded Medicare and Medicaid by "off label" marketing of a popular drug Zyprexa. The government alleged that Eli Lilly widely promoted the use of this drug to nursing homes patients to treat dementia, which is not an approved use by the FDA. The whistleblowers are eligible for up to 25% of the $800 million civil recovery or up to $200 million. The company also paid criminal fines of $615 million.
3. HCA The Healthcare Company: $731,400,000
In December 2000, after changing its name to "HCA The Healthcare Company" (formerly known as Columbia HCA), the largest for?profit hospital chain in the United States, settled its second False Claims Act case by paying $731,400,000 to resolve allegations of billing for lab tests that were not medically necessary or not ordered by physicians, upcoding, billing the government for advertising under the guise of "community education," and billing for non?reimbursable costs incurred in the purchase of home health agencies around the country. The whistleblowers received $150 million. The company also paid more than $100 million in criminal fines.
4. Merck: $671,000,000
In February 2008, Merck & Company (a pharmaceutical company) has paid $671 million to resolve False Claims Act allegations that it failed to pay proper "rebates" to Medicaid under the Best Price statute and that it paid kickbacks to doctors. Under the Medicaid best price statute or rebate program, a pharmaceutical company is required to give Medicaid the same discount it gives its best customers. The three drugs involved were Zocor, Vioxx, and Pepcid. The whistleblowers are eligible for over $115 million.
5. HCA: $641,000,000
In June 2003, HCA Inc. (formerly known as Columbia HCA The Healthcare Company) paid the United States $641 million to settle False Claims Act allegations that it paid kickbacks to physicians and included unallowable cost in its annual cost reports. Combined with the December 2000 settlement, the government has recovered $1.7 billion from HCA. In this case, the whistleblowers received over $115 million.
6. Serono: $567,000,000
In October of 2005, Serono paid $704 million to settle a False Claims Act case involving Serostim, a human growth hormone product used to fight AIDS?related wasting. The fraud allegations included paying kickbacks to doctors and off label marketing of the drug. The whistleblower received over $50 million.
7. TAP [Taketa?Abbott Pharmaceutical] Pharmaceutical Products Inc.: $559,483,560
In October 2001, TAP Pharmaceutical Products Inc. paid $559 million to resolve False Claims Act allegations that it illegally gave kickbacks to doctors. It was alleged to have provided free samples with the understanding that doctors would bill Medicare and Medicaid $500 per dose. The whistleblower received $95 million.
8. Bristol?Myers Squibb Company (BMS): $515,000,000
In September 2007, Bristol?Myers Squibb (BMS) and its wholly owned subsidiary, Apothecon, Inc., paid over $515 million to settle False Claims Act allegations that it paid kickbacks, promoted off label use drugs, and violated Medicaid's best price statute. The whistleblowers received $50 million.
9. Cephalon: $425,000,000
In November 2007, Cephalon, a biotech company, paid $425 million to settle False Claims Act allegations that it engaged in "off label" marketing of three FDA approve drugs: Actiq (a narcotic lollipop designed for pain control in cancer patients), Gabitril (an epilepsy medication), and Provigil (a narcolepsy medication). The company also paid a criminal fine of $50 million. The whistleblowers received rewards exceeding $55 million.
10. Abbott Labs: $400,000,000
In July 2003, Abbott Laboratories, Inc. paid $400 million to resolve False Claims Act allegations relating to the sale of "enteral" products, which pump food into the stomach of patients who cannot digest meals. The whistleblower received approximately $70 million.
Footnotes:
Outlier payments are an increased fee paid to hospitals over and above the normal DRG fee when they can show that their procedures are particularly difficult or complex.
Off label marketing occurs when a pharmaceutical company obtains FDA approval for a specific use of a new drug, but then asks doctors to prescribe it for other uses which it did not seek or obtain FDA approval. It is illegal for pharmaceutical companies to suggest to treating physician that they prescribe drugs for uses other than that which the FDA has approved.
The government has paid over $3 billion in rewards to whistleblowers for reporting fraud.