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DOJ Highlights Five Phillips & Cohen Cases in Year-End Report

Department of Justice sign, Washington DC, USA. Many law enforcement agencies are administered by the DOJ, including the FBI, DEA and Federal Bureau of Prisons

Unprecedented Success in False Claims Act Recoveries in 2023

The U.S. Department of Justice (DOJ) recently touted that the agency’s settlements and judgments exceeded $2.68 billion under the False Claims Act in fiscal year 2023. Five of Phillips & Cohen’s whistleblower cases were highlighted as contributing to the agency’s billion-dollar success.

According to a February report released by the DOJ, in 2023 there were 543 settlements and judgments under the False Claims Act—the highest number in a single year. Whistleblowers filed 712 qui tam suits in fiscal year 2023, and this past year the Justice Department reported settlements and judgments exceeding $2.3 billion from lawsuits filed by whistleblowers.  The agency has recovered more than $75 billion under the False Claims Act since the law was amended in 1986.

The False Claims Act empowers individuals to file “qui tam” lawsuits on behalf of the government and against entities that defraud the government. The government may elect to join the lawsuit or permit the relator to proceed on their own.  If the case is successful, the relator receives a percentage of the amount that is recovered for the government.  The law also provides protection against job retaliation for whistleblowers.

Major Contributions by Healthcare Industry Whistleblowers

Of the more than $2.68 billion in False Claims Act settlements and judgments reached in 2023, $1.8 billion related to the healthcare industry, not including monies recovered for state Medicaid programs.

Five of these healthcare cases were filed by whistleblowers represented by Phillips & Cohen. In total, the recoveries in these five cases contributed hundreds of millions of dollars to the DOJ’s 2023 total.

Notable Cases and Whistleblower Victories in 2023

The Phillips & Cohen cases DOJ highlighted from fiscal year 2023 include:

  • CenCal Health Systems and seven other providers in the healthcare system agreed to pay $95.5 million to the federal government and the state of California to settle allegations the company misappropriated tens of millions of dollars from California’s Medicaid program, Medi-Cal.  The lawsuit contends that CenCal Health inflated the Medical-Loss Ratio (MLR) it reported to California’s Department of Health Care Services (DHCS) to avoid refunding tens of millions of dollars in surplus funding.
  • Martin’s Point Health Care was a Part C risk adjustment case in which the defendant paid $22.5 million to resolve allegations that it knowingly submitted inaccurate diagnosis codes for patients enrolled in Medicare Advantage Plans, which improperly increased payments sought from Medicare.
  • Lincare Holdings agreed to pay $29 million to resolve allegations the company billed Medicare Advantage plans and Medicare Part B for the rental of oxygen equipment for longer than the 36 months allowed by the plans.
  • Modernizing Medicine (ModMed) paid $45.4 million to resolve multiple allegations, including claims the company engaged in multiple kickback schemes, such as creating a “strategic partnership” with a laboratory where the lab would directly compensate ModMed when its users sent orders to the lab. This is believed to be the first time the United States has taken enforcement action under the False Claims Act against an electronic health record (EHR) vendor for providing preferential treatment to a clinical laboratory.
  • NextGen Healthcare Inc. agreed to pay $31 million to resolve allegations that it misrepresented the capabilities of some versions of its EHR software by using a different product that was designed only to meet government certification criteria and otherwise was lacking in critical functionality. The government further alleged that NextGen provided unlawful remuneration in the form of credits, often worth as much as $10,000, along with tickets to entertainment events, which it gave to customers whose recommendation of NextGen’s software led to a new sale.

Non-intervened victory

In 2023, there were a number of significant victories in cases where the government did not intervene, including a significant victory for Phillips & Cohen and its co-counsel.

  • In July 2023, KBR Services agreed to a settlement of $108.75 million, the largest cash settlement ever obtained in connection with Iraq War fraud. The lawsuit alleges KBR defrauded the Army under the multi-billion-dollar LOGCAP III contract when it routinely ordered new materials when excess quantities of the same items were sitting in KBR warehouses in Iraq, which was a violation of the contract.

Phillips & Cohen Attorneys Have Pioneered False Claims Act Recoveries

As the over $2.3 billion collected in settlements and judgments from cases brought by whistleblowers shows, whistleblowers play a major role in recovering monies lost to many different kinds of government fraud.

If you are a whistleblower and would like to speak to an experienced whistleblower attorney, please contact us for a free, confidential review of your matter.

Phillips & Cohen is the most successful law firm representing whistleblowers, with recoveries from cases totaling over $13 billion and 21 awards for clients under Dodd-Frank whistleblower reward programs.

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